Foreigners (non-Mexicans) are able to legally purchase coastal and border properties owned through a trust deed established with a Mexican bank. The Owner has full control of the trust in that they can move the trust from one bank to another and are therefore not at the whim of any banks directives. Foreigners may directly own rural or urban land in the interior of Mexico with certain limitations on specific agricultural tracts.
The Trust Deed is established through a Mexican bank assuring foreign buyers of all rights and privileges of ownership and marketable title. Foreign Investment Law allows these deeds to be established for a term of 50 years and can effectively be renewed ad-infinitum for a nominal processing fee. This process protects the rights of foreigners and ensures that the transaction is legal and unencumbered. The trust deed is not to be confused with a lease, which has diminishing value. Property held by way of trust deed are valued no differently than similar property held by way of deed - They escalate in value in exactly the same manner and are taxed in exactly the same manner as property in the United Sates. The rights of property ownership in Mexico is, in fact, more secure for the owner as compared to owning property in Canada or the United States.
Property taxes on real estate are very low in Puerto Vallarta. Values are determined at the time of every sale as one of the requisite documents needed for a legal closing is the assessment tax appraisal which is completed by a competent and licensed appraiser specializing in these valuations. Property taxes have historically been low in Mexico because they have never been considered to be significant source of governmental income.
The Closing Process
The closing process generally takes between 30-45 days, with paperwork and escrow processes coordinated through our office, a liaison lawyer and a designated Public Notary. The notary system in Mexico follows that of the Napoleonic Code in most European countries where the Notary must successfully complete his law degree, take an additional two years of specialized training, serve and apprentice in a Notary's office and then receive an appointment to one of a limited number of Notary offices in any given geographic area. Notaries are required to certify all documents prior to being accepted by the land registry and are also responsible for collecting the various taxes that must be paid as part of the costs of transferring title. The notary effectively acts on both the buyers' and the sellers' behalf to ensure that there is a legal closure of all required documentation. Closing costs are traditionally paid by the buyer, with the seller paying any capital gains taxes and real estate fees. The buyer and seller need not be present at closing, but may be represented by their representative via a power of attorney.
Property Ownership Through a Corporation
Foreign Investment Law now allows Mexican corporations -- even those with 100% foreign ownership -- to own property in the 'restricted' area (i.e. 50 kilometers from the high water mark and 100 kilometers from the boarders) as long as it is commercial property. Commercial properties carry higher water and electricity rates, plus require additional governmental reporting. There is generally no advantage and often some disadvantages in owning a residential property in a corporation.
Maintaining Your Property
For condominium owners, maintenance and security is handled by the Condominium Owners Association, paid for via monthly fees. Homeowners who will be away from their property for any length of time may want to consider a property management company. We also provide these services. Please ask your sales agent.
Financing in Mexico is available for the the first time !!!,
Puerto Vallarta is a very big rental market for both homes and condos. Realty Executives Vallarta offer services to manage and promote property for rental. Please see the rental and property management section of this web site or ask your sales agent for more information.