Information for Buyers
Buying real estate in Mexico is very similar to owning property in the USA or Canada. The one exception is that by law the title to land within 50 kilometers (about 30 miles) of the coast or border must be held in trust or Fideicomiso as they are called in Mexico. (usually by a bank), with the purchaser being the beneficiary of the trust.
The beneficiary (you) have all the same rights to the property that you would have if you held the title outright; you can rent or lease it, build on the land and/or expand construction (with the same zoning rules as apply to Mexican citizens), sell it, will it to your descendants, etc.
This is the government’s way of getting around a constitutional article which prohibits outright ownership of these lands by foreigners. Trusts are valid for 50 years and are renewable.
The only negative of this trust is that it cost $500 US a year. The positive about this trust that it also acts like a will as you will be required to disclose on this document who you wish to inherit this property if you pass on. Your will in Canada or the US is not valid in Mexico.
The Capital Gains is usually paid by the seller unless the sale price is below the assess value. In this case then the buyer may be responsible for a capital loss. Gerard will make sure that his clients will know if this exist and what is the amount before you make your decision to purchase.
Down payment on an existing property is usually 10% of the accepted offer which will be wired to a escrow account. If purchasing a new construction unit, then the down payment is larger ( 35% ) and on most occasions will go directly to the developer.
The purchase is nearly identical to the process that takes place back in the US or Canada. Gerard will prepare a written offer to the seller and once a price is agreed upon, the seller and buyer sign an agreement to this effect. The buyer then will make a deposit into Escrow (usually 10% of the sale price). This deposit is wired from the buyers banking institution to the escrow company.
Prices are usually (but not always) negotiated in U.S. Dollars. If it is in Peso’s or Canadian Dollars it will be at the currency exchange rate of the U.S. Dollar.
While most real estate purchases by foreigners are all cash money this wired from your bank to the escrow company. There are two mortgage brokers here in Puerto Vallarta property however interest is from 9% to 12%. Gerard will help direct you to these options should you require them.
Property taxes in Puerto Vallarta, Jalisco as well as Nayarit are usually $100 USD per year for every $100,000 US assess value that the Municipality had given the property. This property tax is way below what Americans and Canadians are accustomed to in their own country. If you purchased a $350,000 USD home you would have a $350 USD property tax.
Closing typically takes place within 30 days. By law, documents must be in the Spanish language, but you may request translations in English. As opposed to notaries ‘up North’, the Notario public in Mexico is a legally trained representative of the courts, is the highest designation of legal authority and will perform a title search on each property and register each transaction.
Buyers are responsible for closing costs and is explained in detail under the tab “ explanation of closing cost “.
Contact Me today and find your dream property
Your home in the paradise of Puerto Vallarta will be one of the finest investments you can make, both financially and in the resulting lifestyle. Vallarta has a huge ‘ex-patriot’ community where you will make new life-long friends amongst not only your fellow ex-pats’, but also among the friendly residents who will welcome you to the community! You won’t be alone…as we said, Vallarta is already home to THOUSANDS of your compatriots!