PROPERTY OWNING - BUYERS

It is no secret that when foreigners visit Mexico they are overwhelmed by its beauty and the warm friendly nature of its people. So, it is of no surprise that many foreigners decide to buy property here in Mexico. For this very reason we have compiled a number of tips that will guide you and help you understand the process of purchasing property here in Mexico.

Buying Property - Since the 1970's foreigners have been able to buy property in Mexico with coastal and border properties which is owned through a trust deed established with a Mexican bank. Foreigners may also directly own rural or urban land in the interior of the country with certain limitations on specific agricultural tracts.

The Trust Deed - The Trust Dees which is established by means of a Mexican bank assures foreign property buyers of all rights and privileges of ownership. In 1994 a Foreign Investment Law was passed that allows these deeds to be constituted for a period of 50 years and are renewable upon expiration. This law protects the rights of foreigners and makes sure that the transaction is legal and unencumbered.

Title Insurance - As of 1996, Stewart Title Guarantee Company has agreed to underwrite title insurance to our clients, should they wish to purchase it. The cast of this insurance is approximately 1 % of the insured amount. We view this commitment, as a strong endorsement by one of the largest and most liquid Title Guarantee companies in the world providing security in Mexican Real Estate.

Taxes - Know as "Predial", and because they have never been considered a source of governmental revenue, property taxes in Puerto Vallarta are very low; the rate is .08% of the assessed value, paid every bimester, which is determined at the time of the sale.

The Closing Process - It takes between 30-45 days for the closing process to be completed. Through our office and a local public Notary, we coordinate the paper work and escrow processes. The buyer pays the closing cost; with the seller paying any capital gain taxes and real estate fees. It is not necessary for the buyer and the seller to be present at the closing, but by means of a power of attorney can be represented by their Sales Associate.

Corporation Ownership - Back in 1994 a change in the Foreign Investment Law now allows Mexican corporations to own property in the restricted area as long as it is commercial property; this applies to even those corporation with 100% foreign ownership. We must keep in mind that commercial properties carry higher water & electricity rates, plus require additional governmental reporting.

Property Maintenance - Maintenance and security for condominium owners is handled by the Condominium Owners Association. The fees are paid on a monthly basis. For those homeowners who will be away from their property for any length of time should consider a property management company a service which Finca Sol Real Estate provides.

Insurance - We have in Mexico readily available at low cost various types of insurance which include property, liability, damage, and earthquake. All types of policies can be issued to pay claims in U.S. dollars.