Yes — foreigners can legally own property in Mexico. But there are rules, particularly for beachfront and border areas, and the process works differently than in many other countries. Here’s everything you need to know before buying.
The Restricted Zone Rule
The Mexican Constitution established a Restricted Zone (also called the Prohibited Zone) that prohibits foreigners from directly owning land within 50km of any coastline or 100km of any international border. This covers most of the popular expat and vacation destinations: Los Cabos, Cancún, Playa del Carmen, Tulum, Puerto Vallarta, Mazatlán, and the entire Baja California peninsula.
Outside the Restricted Zone — places like Mexico City, Guadalajara, Oaxaca City, Mérida (partially), and interior cities — foreigners can purchase real estate directly in their own name with no restrictions.
The Fideicomiso: Buying in the Restricted Zone
To get around the Restricted Zone rules, foreigners use a fideicomiso — a bank trust. Here’s how it works:
- A Mexican bank acts as the trustee and holds the property title
- You are the beneficiary — you have all the rights to use, rent, sell, or improve the property
- The fideicomiso lasts 50 years and is fully renewable
- You can designate heirs directly in the trust document
In practice, a fideicomiso gives you all the benefits of ownership. The main costs are setup fees ($500–$1,500 USD) and an annual bank trust fee ($500–$1,000/year depending on the bank and property value).
Major banks that act as fideicomiso trustees include BBVA, Scotiabank Mexico, HSBC Mexico, and Banamex.
The SRE Permit
When buying through a fideicomiso, your bank must obtain a permit from the Secretaría de Relaciones Exteriores (SRE). This is a routine step handled by the bank — it typically takes 2–4 weeks and costs around $1,000 MXN.
Buying Outside the Restricted Zone
Outside the Restricted Zone, foreigners can buy property directly in their own name without a fideicomiso. The process is similar to many other countries:
- Find a property and agree on price
- Sign a promesa de compraventa (purchase agreement) with a deposit of 5–10%
- Due diligence: title search, property registry check, no-lien certificate
- Closing at a Mexican notario público (notary) who formalizes the transaction
- Register the purchase at the Public Property Registry
Costs of Buying Property in Mexico
Budget for 4–8% of the purchase price in closing costs, including:
- Acquisition tax (ISAI): 2–4% depending on state
- Notario fees: 1–2%
- Registry fees: 0.5–1%
- Fideicomiso setup (if applicable): $500–$1,500 USD flat
- Real estate agent commission: Typically 3–6% paid by the seller
Using an RFC for Property Ownership
If you’re a Mexican resident, you should obtain an RFC (tax ID) before buying property. This simplifies the transaction, allows you to deduct mortgage interest, and is increasingly required by notarios. Our team can handle RFC registration as part of our residency services.
Can Foreigners Get a Mexican Mortgage?
Mexican banks do offer mortgages to foreigners, but the requirements are strict and interest rates are higher than in the US or Canada (currently 9–12%). Most foreign buyers purchase cash or finance through their home country if possible. Some US/Canadian lenders offer international property loans as an alternative.
Property Taxes
Mexican property taxes (predial) are extremely low by international standards — typically 0.1–0.3% of the assessed value per year. A property worth $200,000 USD might pay $200–$600/year in property tax.
Is It Safe to Buy Property in Mexico?
Yes, provided you work with a qualified Mexican notario público and do proper due diligence. Key risks to avoid:
- Never buy without a proper title search through the Public Property Registry
- Be cautious with “ejido” land (communal agricultural land) which cannot be sold privately
- Use a reputable notario — they are licensed by the state government and are legally responsible for the transaction
- In tourist areas, verify the seller has clear title and no outstanding liens
Want Help Navigating the Process?
Buying property in Mexico involves legal nuances that vary by state. Our team can connect you with vetted lawyers and notarios who specialize in foreign property purchases. Book a consultation call to discuss your specific situation.
Many property buyers also pursue legal residency. Our Mexico Residency guide explains the income requirements, process, and costs.
mexico residency · residency comparison · city guides.
Related: Mexico residency · Residency Comparison
