Buying property in Mexico as a foreigner: the rules

The constitutional starting point

Article 27, section I, of the Constitution gives the right to own land and water to Mexicans by birth or naturalisation and to Mexican companies. The State may grant the same right to foreigners if they agree before the SRE to be treated as nationals regarding that property and not to invoke the protection of their governments. The penalty for breaking that agreement is loss of the property to the Nation. The same paragraph then says that in the 100 km and 50 km strips foreigners may “por ningún motivo” (in no case) acquire direct ownership of land and water.

The Foreign Investment Law (Ley de Inversión Extranjera, LIE) turns this into procedures. One detail surprises many buyers: article 3 treats the investment of a foreigner holding permanent-resident status as Mexican investment, but excludes the matters of Titles One and Two of the Law. Title Two is the one on acquiring real estate and on trusts. Becoming a permanent resident therefore does not lift the restricted-zone rule.

The three situations

Whether a plot lies inside the zone is not always obvious. The Regulation (art. 6) says that in case of doubt the SRE decides after consulting INEGI; see the restricted zone explained.

From offer to registered title

The sequence below is the federal frame. The state sets the details.

1. Check the zone. Everything else depends on it.
2. Obtain the permit or file the agreement. For a trust, the bank applies to the SRE; for a purchase outside the zone, the buyer files the agreement. The Regulation (art. 4) requires the notary to demand the permit before signing, or, where approval is tacit, proof that the application was filed, and to record this in the deed. See permit cost and timing.
3. Prove your immigration status. The Migration Law (art. 65) requires foreigners to show a regular immigration status in legal acts that involve a notary on real estate matters. The Regulation (art. 8) asks for the same proof for purchases outside the zone. No text read says that a visitor in regular status is barred from buying; ask the notary what the state requires.
4. Sign the deed before the notary. The deed is a public instrument, the escritura pública, drawn up by a notario público (a state-appointed notary, a senior lawyer). The civil code of the state governs its form, so the threshold above which a deed is mandatory is not the same in every state.
5. Register it. The deed is recorded in the state’s public property registry.
6. Report where required. A trust must be entered in the National Registry of Foreign Investment; see the RNIE explained.

Taxes the buyer meets

At purchase, the acquisition tax (impuesto sobre adquisición de inmuebles, ISAI, called by other names in some states) is a local tax. The Constitution (art. 115, IV) gives municipalities the revenue from taxes that states set on property, its transfer and improvement, so the rate and the base differ between municipalities. Use the closing-costs calculator and the state-by-state pages.

Federal taxes arise later: income tax on rent and on sale, and VAT on furnished rentals. The treaties with the United States, Canada and the United Kingdom are covered in separate guides: United States, Canada, United Kingdom. Tax in your home country is outside the scope of this site.

Which professional to consult

A notary (notary) formalises the deed and checks the permits before signing. A real estate lawyer (real estate lawyer) reads the title and the contracts. The fiduciary department of a bank handles the trust. A tax accountant (contador público) can explain the tax filings. Check each professional’s registration yourself.