A simple guide to owning real estate in Mexico for Canadians
If you’ve ever fantasized about life in Mexico, it’s time to stop dreaming and start doing.
As a Canadian, you’re probably familiar with the idea of owning a house or condo. It’s something that most people in the Canada can aspire to—even if they don’t always have the means to achieve it.
But when it comes to Mexico, you might be wondering if owning property is even possible or not.
Buying property in Mexico is one of the most popular options for Canadian investors who are looking to escape the high cost of living and enjoy a more relaxed lifestyle.
The popularity of investing in Mexico is unsurprising; it borders close to Canada, making it a prime destination for vacation homes and retirement properties.
In recent years, however, the country has undergone many changes that have made buying property a much more viable option for foreign investors than ever before.
If you’re a Canadian citizen looking to invest in real estate in Mexico, buying property in the “restricted zone” is a fun and lucrative process.
6 Basic Steps to Property Ownership for Canadians buying property in Mexico’s Restricted Zone
Here’s how it works:
- Find your dream property (a house or a condo) and make an offer.
- Sign the initial sales agreement to buy. The legally binding version of the contract is in Spanish and should be written by a Mexican lawyer.
- Send your deposit via wire transfer, along with any other sequential payments as outlined in the terms of your sales contract.
- Once you have paid the full balance for the property, the seller contacts your bank to start the trust application for your fideicomiso (your trust).
- Pay closing costs, taxes, & fees.
- Within 3 months of your closing date, the Public Registry issues the final deed to your property and the property is officially yours!
Buying/Owning Property in Mexico as a Canadian – Fideicomiso – Bank Trust
Want to buy or own property in Mexico? As a Canadian, you can! It’s easy! You just need to know what a fideicomiso is.
Fideicomisos are trusts that allow people from Canada to buy property in Mexico with all the rights of a Mexican citizen. This trust can be held by one or more individuals, including husbands and wives. It lasts for 50 years after which it is renewable. The trust is easily transferrable when an owner is ready to sell. With one fideicomiso, international owners can hold multiple properties in Mexico.
The setup costs range from $500 to $1,000 USD. With maintenance fees cost around $500 to $700 USD per year.
Buying property in Mexico is a great way to protect your earnings from the ups and downs of the Canadian economy. Property taxes are low, and you’ll enjoy many benefits like access to the beach and a beautiful home in an ideal climate year-round.
What are the closing costs for Buying Property in Mexico as a Canadian?
Buying a house in Mexico can be an exciting and rewarding process. However, it is important to understand all the costs involved before making the decision to buy.
The purchase price of a home in Mexico is only part of what you will pay for your new property. You will also have to pay various fees, which are collectively referred to as closing costs.
These closing costs usually total between 4% and 6% of the property’s value. They are always the responsibility of the buyer, unlike in Canada, where closing costs are split between buyers and sellers.
How to send the payment for ownership of property in Mexico?
As a Canadian, you’re probably wondering how to pay your down payment or full payment on property in Mexico. We’re here to help you make the right choices when it comes to paying for your property down payment.
The most traditional way to send money is through a wire transfer. The process is standard, but the fees can be high, especially if the amount is less than $10K USD.
If you choose Wise.com, however, you’ll pay less in fees and get a consistently better exchange rate.
Wise.com is a service that provides low-cost payments between Canadian-based bank accounts and Mexican bank accounts. To use this service, follow these steps:
Click here to Set up an account with Wise.com for free.
Sending less than $5,000 CAD to MXN
While there are many methods of sending money from CAD to MXN (the Mexican peso), we recommend using Wise (formerly Transferwise) for amounts below $5000 USD. It’s the best exchange rate since they are provided by Reuters, guaranteeing fair and low-cost money transfers. Based on our past experience with them, the recipient’s Mexican bank account usually gets the money transfer within 3 days.
Click here to visit Wise to learn more about their low rate for sending USD to MXN.
Do you really need a real estate agent to buy property in Mexico as a Canadian?
Buying a home in Mexico is different than buying one in Canada. While there are many similarities, there are some crucial differences that you need to be aware of before you dive in.
A real estate agent is necessary to help you navigate the market. In Mexico, real estate agents act as the go-between for the buyer and seller.
If you’re working with a realtor from the Canada, they might be able to help if you’re looking for new construction or resale property for sale by owner, but it’s unlikely that they’ll coordinate the sale or purchase of a property.
And your real estate agent needs to know how to write up an offer on Mexican property. The process is different than in Canada.
A Mexican real estate will help you get all the information to purchase legally in Mexico. Once your offer has been accepted, you set up a bank account with a Mexican bank and hire an attorney who can coordinate the paperwork and documents required for closing on the sale of your Mexico home.
