Frequently Asked Questions

Sometime after the pace of life has slowed to a more sane and pleasurable level you may find yourself looking around and asking yourself, "I wonder if I could live here...."

Q: Can foreigners own property in Mexico?
A: Yes

Although Article 27 of the Mexican Constitution restricts direct ownership of land by non-Mexicans within the “restricted zone” –100 kilometers (about 62 miles) from the border and 50 kilometers (about 31 miles) from the coastline – amendments to the Constitution have established a system whereby non-Mexicans may own land or property within Mexico. These were designed to both protect the purchaser’s ownership rights as well as to promote the sale of real estate to foreign investors.

Since 1973 foreigners (non-Mexicans) have been able to purchase coastal and border properties through an established and perpetually renewable Mexican property trust called a Fideicomiso. This is a bank trust, much like an estate trust in the U.S., which gives the purchaser all of the rights of ownership.

Foreigners may acquire non-residential property in the restricted zone using a Mexican corporation without the need of establishing a bank Trust. This is a great benefit for foreign business owners. Compliance with Mexican law requires that the property be used for nonresidential purposes only. There is also additional government reporting and tax payments required for this purchase structure, so it should be evaluated with proper legal and tax council.

Q: What is this Trust, and how does it work?
A: The bank acts as the "Trustee" for the trust and the purchaser is the "Beneficiary" of the trust. The trust is not an asset of the bank; the bank merely acts as the trustee of the trust, and the trust holds the legal title to the property. All rights and privileges of ownership, including exclusive use and enjoyment, are held by the trust Beneficiary-the foreigner. The beneficiary enjoys all rights of ownership enabling him to occupy, rent, gift, or transfer title to the property to any legally qualified person he may designate. The actual document is a Trust Deed and is public document registered in the local land registry. This is not to be confused with a land lease or anything at all related to a lease—a common misconception. These Trust Deeds have an initial term of 50 years, and are legally renewable in perpetuity at any time or at the end of the 50-year period for a filing fee (less than $1,000 US) for additional 50-year periods. The property may be sold at any time, with the seller being responsible for paying his capital gains taxes on the appreciated value. This process is designed to protect the rights of foreigners, and ensure that property transfers are made in a legal manner.

Q: How are these Trusts created?
A: To establish a property Trust, (fideicomiso), banks will charge a predetermined fee, plus a percentage of the property's value, to cover the costs of preliminary studies and the drafting of the Trust agreement. The bank also charges an annual fee for maintaining the Trust.
The Trusts are carried as off balance sheet assets by the banks who act as trustees. Most of the larger Mexican banks have established trust departments, with English-speaking personnel, as well as publications, available to answer questions about Trusts and their services.

Q: Are there differences in other aspects of property ownership in Mexico?
A: Closing costs to the buyer tend to be higher in Mexico than they are in the U.S. or Canada, averaging 4 to 5 percent of the purchase price. Closing will take from 30 to 45 days depending on contingencies and financing requirements. Escrows are now available via private escrow companies specializing in this function and will run from $1,500 to $1,800 U.S. per transaction.
In most cases, the buyer and seller need not be present at closing, but may be represented by their sales agent via a power of attorney.
Public Notaries are the agents of record for all transactions registered in the Land Registry Office. The notary is also responsible for collecting any taxes that may be due at closing.

Q: What about the availability of insurance on the property itself?
A: Insurance – including property, theft, flood, liability, hurricane, damage, and earthquake – are all readily available in Mexico and policies can be written to pay claims in U.S. dollars.

Q: What about taxes? What can I expect to pay in Mexico?
A: For the buyer, the subject of real estate taxes generally comes as good news, especially in the Punta Mita area, real estate taxes tend to be low. Known as 'Predial', the tax is calculated as a percentage of the assessed value determined at the time of sale, paid every bi-mester. Property taxes have historically been low in Mexico because they have never been considered a source of governmental revenue, however, this is subject to change

Q: What other expenses should I consider on the purchase of property in Mexico?
A: If you are not planning on living full time in Mexico, property maintenance will need to be considered for the time you are away. For Ayia condominium owners, maintenance and security is handled by the Condominium Owners Association, paid for through monthly fees.

Rental Services

For many owners of resort residences, the time you have available to enjoy your “home away from home” is far too brief. Rather than having your Ayia condo sit unused, you have the option of placing it in a professionally managed rental program, to help offset your ownership expenses.

You may define the frequency in which you’d prefer to rent your condo, and we’ll do the rest—from rental-generating marketing programs to rental guest reception and handing of all payments, Ayia’s on-site management takes all the work out of this enterprise. Allow us to tell you more about how rental potential can make the purchase of an Ayia residence a prime investment.

Property Management

At Ayia Punta Mita, the Home Owners’ Association is committed to protect, maintain and preserve the Ayia community.