A Complete Guide to Buying a Property in Mexico
Canadians are considering buying property in Mexico more because of various reasons. First, the country is close to Canada, making it an easy option for living abroad. Therefore, some Canadians choose to retire in Mexico.
While there are many things to know before buying your Mexican property, the buying process is easy for foreigners. However, ensure proper research because the purchasing process could vary across different locales.
For example, if you buy a hotel in Mexico, you have to register your purchase with the Mexican consulate in Canada. The law also requires you to maintain saved funds equivalent to your investment amount.
The good news is that we will provide step-by-step guidance to make your property purchasing in Mexico easier.
Buying Property in Mexico Canadian
Buying property in Mexico without restrictions. Once you choose your area, hire a qualified lawyer to guide you through the process. The lawyers know the state’s requirements to own property and will simplify your purchasing process.
Some reasons Canadians are buying property in Mexico are:
1. Mexico Is Close To Canada
It takes 3 hours to fly from Mexico to Canada, meaning you can easily visit your friends and family anytime. This makes Mexico the closest retirement haven for most Canadians who want to escape the cold Canadian winters.
When traveling to Mexico, you don’t worry about overweight bags and long airport lines. Surprisingly, you can even drive here with your pets to escape winter in Canada. There are few restrictions on bringing your vehicle or car to the country, and you can get direct flights to the state.
2. Easy To Get Residency
Becoming a Mexican resident is easy and quick, unlike in other states. While foreigners use income, pension, and Social security in most states to qualify for residency, you can use your savings like 401k or IRA balance to get Mexican residency.
Getting a visa for Mexico is also quick and straightforward. The officials don’t ask for complicated things like notary seals and apostille documents. Once you present your English pay stubs to the consulate, you are likely ready to go through the due process for a visa.
3. The Food Is Perfect
Once you taste Mexican food, you won’t want to go back to the daily fare you’ve been having in Canada. Instead, Mexicans make mouthwatering seafood, tacos, and tamales. There is also a variety to choose from their menu.
4. Attractive Exchange Rates
The exchange rate between the Mexican Pesos and the Canadian Dollar is attractive, making it more affordable to buy a property in Mexico. All you need to do is find a reputable currency exchange provider with the most competitive exchange rates.
Things to Know Before Buying Property in Mexico as a Canadian
Setting your eyes on the house of your dreams and reading about the good food can make you want to move to Mexico immediately. However, as a foreign investor, you know little about owning property in Mexico, so don’t be in a hurry.
Once you decide to own a house or land in Mexico, some essential things to know are;
1. Ocean Front Land Is Worth Considering
You can never get enough views of the ocean, the cool breezes, and easy access to the sea. Most Canadians buying property in Mexico go for the oceanfront real estate because of the views and also because it is cheap.
However, note that you cannot wholly own this land. It is communal agricultural land. Therefore, you must first get the approval of all the community members. You can also hardly get private ownership of the oceanfront land, which has resulted in many bribery cases and the presentation of false records.
2. There Are No Restrictions on Owning Land in Mexico
Canadians have an easy time owning residential property in Mexico because of the few limitations. For example, you can hold the title in your name or a trust for more protection.
However, some restrictions are worth noting if you buy coastal property. The restricted zone is any land within 50km from the coast or 100km of an international land border.
To own land near this area, you must use a trust to purchase the property, but you will have control of buying and selling the land. In addition, the trust offers property protection, which you must renew after 50 years.
3. Be Careful With the English Contract
Canadians have difficulty purchasing property in Mexico because of the language difference. The official language of Mexico is Spanish, and their official documents are in Spanish.
To make property purchasing easier, your real estate agent will give you a sales agreement translated into English. The agreement contains the terms of sale, like the price and conditions. First, however, you will sign the Spanish document.
Sometimes, translated documents can conflict with the original version of the sales agreement. Unfortunately, if there are conflicts between the English and Spanish documents and the case is presented in court, the judges will follow the Spanish version.
A Step-By-Step Process for Canadian Buying Property in Mexico
Now that you know what to do when buying land in Mexico, you are ready for the purchase. For easier purchase of your Mexican property, follow this easy purchasing process.
1. Select the Area to Invest
Foreign and local investors have a wide selection of areas for investment in Mexico. Tulum is one of the most incredible options to consider when buying a home. It is a fast-growing town with beautiful ruins and beaches.
Cancun, Puerto Vallarta, and Los Cabos are other perfect places to consider when investing in Mexico. These towns have beaches and luxurious hotels, and the properties are affordable.
2. Get a Realtor
Understanding the laws of owning property in a foreign land is challenging, so you need to work with an expert. Furthermore, you will experience language challenges when communicating because Mexicans speak Spanish.
Get a realtor who understands English and knows the law about owning property in Mexico. These experts are also necessary when buying land in restricted zones. So, the realtor can help you choose the perfect place to buy your retirement home.
3. View the Property
Avoid making payments and signing off property deals without seeing them. Some house pictures on the internet are not of the house you are paying for. If you are not in Mexico, send your trusted realtor to check the property.
You can travel to Mexico to view the property yourself to be safer. Check for any structural damage to the house. Other minor repairs homeowners ignore are plumbing and electrical wiring. You can also hire a contractor to ensure a quality house.
4. Finance Your Home
Once you confirm everything is good, choose a financing method to purchase the property. You can transact using cash or get a mortgage from a bank and other financial institutions.
When shopping for a mortgage, compare the different rates. You should also check the bank’s terms. Your real estate agent can also help you to choose other payment methods.
5. Pay Taxes and Closing Costs
The notary will help you to pay the taxes and collect fees. You will then start the property registration, which is completed and recorded within three months.
The closing costs are about 5 percent of the purchase price. They include a transfer tax of 2 percent and a 1.5 percent notary fee. You will also pay a trust fee, whose rates can be higher if you use a mortgage.
Final Words
Buying property in Mexico for Canadians is straightforward. Although there is a straightforward process and few restrictions, you should research more if you buy property near the coast. Most importantly, take advantage of the best exchange rates at KnightbridgeFX to save hundreds or thousands of dollars on your currency exchange.