Foreign buyer's guide

Yes, and it is not a grey area. What changes is how, and it depends on where the property is.

The Constitution reserves a strip called the restricted zone: 100 kilometres from the borders and 50 kilometres from the coastline. Outside that strip, a foreign national acquires property in their own name exactly as a Mexican would. Inside it, they do so through a bank trust.

Melaque, Barra de Navidad, and Cuastecomate all sit within 50 kilometres of the coast, so every deeded purchase by a foreigner on this coast runs through a trust. Sayula does not: it is inland, and property there is acquired directly.

A trust is a contract in which an authorised Mexican bank appears as titleholder and you are the beneficiary. The word alarms people on first reading, so it is worth being precise about what it gives you and what it does not.

It gives you the right to live in the property, rent it, remodel it, sell it to whomever you choose, and leave it to the beneficiaries you name. The bank cannot dispose of it, cannot sell it, and does not carry it on its balance sheet. Its role is administrative, not ownership in any economic sense.

It is set up for fifty years and renews. It requires a permit from the Ministry of Foreign Affairs, obtained as part of the transaction. There is a setup cost and an annual administration fee charged by the bank; both vary by institution, and it is worth comparing before choosing.

One detail that saves trouble later: name substitute beneficiaries from the start. That is the clause that avoids a Mexican probate proceeding if something happens to you.

This is the part that costs the most money when it gets skipped.

Deeded. Private property with title recorded in the Public Property Registry. The most solid regime. If you are foreign and on the coast, you will hold it through a trust.

Ejido. Land of communal origin, from the agrarian land distribution. It is bought and sold every day in Melaque, and much of the town is built on it. What transfers are possessory rights documented before the ejido, not a recorded deed. The price reflects that: ejido properties cost clearly less than their deeded equivalents.

It is not a scam and it is not informal, but it is not the same thing either. There is a route called dominio pleno by which ejido land converts to private property, but it requires the ejido assembly's agreement and its own process. If someone tells you it is a formality of a few weeks, be sceptical.

Federal zone concession. The twenty-metre strip measured from the high tide line is federal maritime land. It is not sold, it is granted by concession. If an oceanfront property includes a terrace or palapa over that strip, ask about the concession and how long it runs.

In Mexico a notario público is not what a notary public is in the US or Canada. They are a state-appointed lawyer vested with public faith, and no transfer of property is valid without going through one. It is not optional, and it should not be chosen on price alone.

The notary verifies the seller is who they claim to be, that the property is free of liens, calculates the taxes on the transaction, withholds them, remits them, and attests to the act. That responsibility is why their fees are calculated as a percentage of value rather than as a flat rate.

Which leads to the part that surprises nearly every foreign buyer: that value comes from the formal appraisal. So the appraisal is not a piece of paperwork. It is the document that sets the base on which notary fees and the acquisition tax are calculated.

As a general reference, closing costs on a Mexican purchase usually land between 4% and 8% of the transaction value, and the buyer covers them. The range is wide because it depends on the state, the municipality, the value, and whether a trust is involved.

What makes up that percentage:

• Property acquisition tax. Charged by the municipality; in Jalisco it runs around 2% of value. It is the largest single line.
• Notary fees. A percentage of value, tapering as the amount rises.
• Public Property Registry. Recording fees.
• Appraisal. By an authorised valuer.
• Certificates and searches. Lien-free certificate, property tax current, no water arrears.
• Foreign Affairs permit and trust setup, where applicable, plus the bank's first annual fee.

Ask for the itemised estimate in writing before signing the purchase agreement, not after. A serious notary hands it over without argument.

On selling, the tax that appears is income tax on the gain. There is a primary-residence exemption under certain residency and documentation conditions, and that is a case for specific tax advice before the transaction rather than after.

RFC. The Mexican tax ID. It is not always required in order to buy, but it makes nearly everything afterwards easier: paying property tax online, setting up utilities, declaring income if you rent, and documenting deductions when you sell. If you plan to stay, get one early.

A Mexican bank account. Useful for property tax, electricity, water, and maintenance, and it saves you repeated international transfer fees. It requires proof of address, so it usually gets sorted after closing rather than before.

A realistic timeline. From accepted offer to signing the deed, a clean transaction involving a trust usually takes six to twelve weeks. The Foreign Affairs permit and the trust setup are what set the pace. If someone promises three weeks, either a step is being skipped or you are about to be asked to sign something early.