How does American own real estate in Mexico?

Authored by the expert who managed and guided the team behind the Mexico Property Pack

Everything you need to know before buying real estate is included in our Mexico Property Pack

Who is the author of this content?

THELATINVESTOR

A team specialized in real estate investing in Latin American countries (Mexico, Colombia, Brazil, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Mexico. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At TheLatinvestor, we explore the Mexican real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Mexico City, Cancún, and Puerto Vallarta. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Can Americans legally buy property in Mexico, and are there any restrictions compared to Mexican citizens?

Americans can legally purchase real estate in Mexico under the same conditions as Mexican citizens in most areas of the country.

The primary restriction applies to "restricted zones" - areas within 50 kilometers of coastlines and 100 kilometers of international borders. In these zones, Americans cannot own property directly but must use a bank trust called a fideicomiso.

Outside restricted zones, Americans enjoy identical property ownership rights as Mexican nationals, including the ability to buy, sell, rent, and inherit property freely. This applies to approximately 60% of Mexico's territory, including major inland cities like Mexico City, Guadalajara, and San Luis Potosí.

Ejido land, which represents communal property reserved for local communities, remains off-limits to all foreigners regardless of location.

It's something we develop in our Mexico property pack.

What kind of properties can Americans buy—land, condos, commercial—and are there areas where they can't?

Americans can purchase all major property types in Mexico including residential homes, condominiums, vacant land, and commercial real estate.

Condominiums are particularly popular among American buyers, especially in beach destinations like Cancún, Puerto Vallarta, and Playa del Carmen. These properties often come with resort-style amenities and professional property management services.

Commercial properties including office buildings, retail spaces, and warehouses are available to Americans either through direct ownership (in non-restricted zones) or Mexican corporations (in restricted zones). Industrial properties and hotels follow similar ownership structures.

The main areas where Americans cannot buy property include ejido lands, which cover approximately 60% of Mexico's agricultural territory, and certain strategic areas near military installations or airports that are specifically designated as off-limits to foreign ownership.

Do Americans need Mexican residency or a visa to purchase real estate, or can they do it as tourists?

No Mexican residency or special visa is required for Americans to purchase real estate in Mexico.

A standard tourist visa (FMM), issued automatically upon arrival and valid for up to 180 days, provides sufficient legal status to complete property transactions. This tourist visa is free for Americans and requires only a valid U.S. passport.

Many Americans complete their property purchases during extended vacation stays, using their tourist status throughout the entire process. Property ownership can later support applications for temporary or permanent residency if desired, but residency is not a prerequisite for purchase.

The only documentation required beyond tourist status is obtaining an RFC (Mexican tax identification number), which can be acquired during the property purchase process.

Do Americans have to be physically present in Mexico to buy property, or can it be done remotely?

Physical presence in Mexico is not mandatory for property purchases, though many buyers choose to visit at least once to view properties firsthand.

Purchase Method	Requirements	Advantages
In-Person Purchase	Travel to Mexico for closing	Direct property inspection, immediate document signing
Remote Purchase	Power of attorney, apostilled documents	No travel required, cost savings
Hybrid Approach	Initial visit, remote closing	Property verification with convenience
Attorney Representation	Full legal power of attorney	Professional oversight throughout process
Developer Programs	Pre-construction purchases	Payment plans, future delivery

Remote purchases require a power of attorney drafted according to Mexican law, notarized in the U.S., apostilled by the Secretary of State, translated into Spanish by a certified translator, and registered with Mexican authorities.

What's the step-by-step process for an American to purchase real estate in Mexico, including timelines and key documents?

The Mexican property purchase process follows a structured timeline typically spanning 6-12 weeks from initial offer to final closing.

1. **Property Search and Selection (1-4 weeks)**: Research properties through Mexican real estate agents, online platforms, or developer presentations. Verify property legitimacy and obtain preliminary documentation.2. **Offer Submission and Promise Agreement (1-2 weeks)**: Submit written offer through licensed Mexican real estate agent. Sign promise agreement (contrato de promesa) and pay earnest money deposit of 5-10% of purchase price.3. **Due Diligence Period (2-3 weeks)**: Conduct comprehensive title search, property inspection, and verification of all permits and utilities. Review property tax history and confirm no outstanding liens or legal issues.4. **SRE Permit Application (1 week)**: Apply for Foreign Affairs Ministry permit if purchasing in restricted zones. Submit required documentation including passport copies and property details.5. **Fideicomiso Establishment (2-3 weeks)**: If in restricted zone, select bank trustee, submit trust documentation, and sign fideicomiso agreement. Bank conducts its own property verification.6. **Final Closing at Notary (1 day)**: Sign deed (escritura) before Mexican notary public, pay remaining balance plus closing costs, and receive official property title.7. **Post-Closing Registration (2-4 weeks)**: Register deed with Public Property Registry, transfer utilities to new owner, and obtain final property documentation.

It's something we develop in our Mexico property pack.

Is hiring a lawyer mandatory for American buyers, and what should they look for in a good real estate attorney in Mexico?

While not legally required, hiring a Mexican real estate attorney is strongly recommended for American buyers to protect their interests throughout the transaction.

The Mexican notary public (notario público) is a government-appointed official who facilitates the transaction but does not represent either party's interests. The notary's role is to ensure legal compliance, not to advocate for the buyer.

A qualified Mexican real estate attorney should possess fluency in both English and Spanish, extensive experience with foreign buyer transactions, professional credentials from the Mexican Bar Association, and positive references from other American clients. The attorney should also maintain professional liability insurance and demonstrate clear communication skills.

Legal fees typically range from $2,000 to $5,000 USD depending on transaction complexity, but this investment provides crucial protection against title defects, undisclosed liens, permit issues, and other legal complications that could result in significantly higher costs later.

How are real estate transactions structured for Americans, especially in the restricted zones, and how does the fideicomiso (bank trust) work?

Real estate transactions for Americans in Mexico follow different structures depending on the property's location relative to restricted zones.

In non-restricted zones (inland areas beyond 100km from borders and 50km from coasts), Americans purchase property directly in their name with identical rights to Mexican citizens. The property deed (escritura) lists the American buyer as the legal owner with full rights to use, modify, rent, sell, or inherit the property.

In restricted zones, Americans must use a fideicomiso (bank trust) where a Mexican bank holds legal title as trustee while the American buyer becomes the beneficiary with all practical ownership rights. The fideicomiso grants the same rights as direct ownership - the right to use, improve, rent, sell, or pass the property to heirs.

Fideicomiso trusts last for 50 years and are renewable for additional 50-year periods indefinitely. Annual trust fees typically range from $500-$1,200 USD depending on property value and bank policies. The beneficiary can change banks or transfer the trust to heirs without restrictions.

For commercial properties in restricted zones, Americans can alternatively establish a Mexican corporation with foreign investment registration, though this involves more complex ongoing compliance requirements.

What are the tax implications for Americans owning, renting out, or selling property in Mexico—both locally and back in the US?

American property owners in Mexico face tax obligations in both countries, requiring careful planning to avoid double taxation and ensure compliance.

Tax Type	Mexico Obligations	U.S. Obligations
Property Tax (Annual)	0.05%-1.2% of assessed value	Not deductible on U.S. returns (2018-2025)
Acquisition Tax	2%-5% of purchase price	Part of cost basis for future capital gains
Rental Income	Mexican tax return required	Report on U.S. return, credit foreign taxes paid
Capital Gains (Sale)	25% of gross or 35% of net profit	Standard U.S. capital gains rates apply
Estate Planning	Mexican inheritance laws may apply	Worldwide estate reporting required

Mexican property taxes (predial) are significantly lower than most U.S. markets, typically ranging from $200-$2,000 USD annually for most residential properties. These taxes are paid directly to municipal authorities and fund local services.

Rental income from Mexican properties must be reported on both Mexican and U.S. tax returns. Mexico requires quarterly estimated payments, while the U.S. allows foreign tax credits to offset double taxation. Professional tax preparation is essential for compliance.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Mexico versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Is financing or a mortgage available to Americans buying in Mexico, what are the interest rates, and how can they improve their chances of approval?

Financing options for American buyers in Mexico exist but remain limited compared to U.S. mortgage markets, with higher interest rates and stricter qualification requirements.

As of June 2025, Mexican banks offer mortgages to qualified American buyers at interest rates averaging 11-13% annually for peso-denominated loans. Dollar-denominated loans, when available, typically carry rates of 8-10% but are offered by fewer institutions.

American buyers can improve their approval chances by maintaining excellent credit scores (750+), providing substantial down payments (30-50%), demonstrating stable income through multiple years of tax returns, and working with banks experienced in foreign lending such as Banco Santander, BBVA, or Scotiabank Mexico.

Alternative financing includes developer financing programs (often 0-5% interest for 1-3 years), seller financing arrangements, cross-border lending from U.S. institutions, and private lending from Mexican sources.

Most American buyers choose cash purchases to avoid financing complications, often leveraging home equity lines of credit or refinancing U.S. properties to fund Mexican purchases.

Which Mexican regions or cities are most popular with American buyers, and where are the best opportunities for lifestyle, rental income, or capital appreciation today?

American buyers concentrate in specific Mexican regions that offer combinations of lifestyle amenities, investment potential, and established expat communities.

1. **Puerto Vallarta, Jalisco**: Remains the top destination for American retirees and vacation home buyers, offering established infrastructure, direct U.S. flights, and strong rental markets for both short-term and long-term properties.2. **Riviera Maya (Tulum, Playa del Carmen, Cancún)**: Attracts younger American investors seeking rental income opportunities, with Tulum showing exceptional capital appreciation of 15-20% annually through 2024.3. **San Miguel de Allende, Guanajuato**: Appeals to cultural enthusiasts and retirees, offering colonial architecture, UNESCO World Heritage status, and one of Mexico's largest American expat communities.4. **Mérida, Yucatán**: Emerging as a major destination for American remote workers and retirees, offering affordable living costs, excellent healthcare, and proximity to beaches and Mayan ruins.5. **Los Cabos, Baja California Sur**: Premium destination for high-net-worth Americans, featuring luxury resorts, world-class golf courses, and strong short-term rental markets.

As we reach mid-2025, Mérida and the broader Yucatán region show the strongest growth potential for American investors, combining affordable entry prices with rapidly improving infrastructure and growing tourism.

How much does property cost in the most sought-after areas for Americans, like Tulum, Mexico City, Puerto Vallarta, Mérida, and San Miguel de Allende?

Property prices in major American buyer destinations vary significantly based on location, property type, and proximity to amenities as of June 2025.

Destination	Condo Price Range (USD)	House Price Range (USD)
Tulum, Quintana Roo	$250,000 - $800,000	$400,000 - $1,500,000
Mexico City (Roma Norte, Condesa)	$300,000 - $600,000	$500,000 - $2,000,000
Puerto Vallarta, Jalisco	$200,000 - $700,000	$350,000 - $1,200,000
Mérida, Yucatán	$150,000 - $400,000	$200,000 - $800,000
San Miguel de Allende, Guanajuato	$250,000 - $500,000	$400,000 - $1,000,000
Los Cabos, Baja California Sur	$400,000 - $1,200,000	$600,000 - $3,000,000

Tulum commands premium prices due to its proximity to beaches and cenotes, with beachfront properties often exceeding $1,000,000 USD. Mexico City offers the highest price ceiling for luxury properties but also provides more diverse options across different neighborhoods.

Mérida represents the best value proposition for American buyers, offering colonial-style homes with modern amenities at prices 30-50% below comparable properties in other major destinations.

It's something we develop in our Mexico property pack.

What are the most common mistakes Americans make when buying property in Mexico, and how can they avoid legal, financial, or logistical pitfalls?

American buyers frequently encounter preventable problems that can result in significant financial losses or legal complications when purchasing Mexican real estate.

1. **Inadequate Due Diligence**: Many Americans skip comprehensive title searches, property inspections, and permit verification. Always hire qualified professionals to verify clear title, confirm all construction permits are current, and check for outstanding tax liens or legal encumbrances.2. **Buying Ejido Land**: Some Americans unknowingly purchase ejido (communal) land, which is illegal for foreign ownership. Always verify land status through the National Agrarian Registry (RAN) before making any deposits.3. **Skipping Legal Representation**: Relying solely on the notary public or real estate agent for legal protection. Always hire an independent Mexican attorney who represents your interests exclusively throughout the transaction.4. **Ignoring Tax Obligations**: Failing to register for Mexican tax identification (RFC) or understand ongoing tax responsibilities. Establish proper tax compliance from the beginning to avoid penalties and complications.5. **Inadequate Fideicomiso Understanding**: Not comprehending trust terms, renewal requirements, or bank obligations in restricted zones. Work with experienced banks and ensure you understand all trust provisions before signing.6. **Currency Risk Ignorance**: Not considering peso-dollar exchange rate fluctuations on ongoing expenses and property values. Plan for currency volatility in long-term financial projections.7. **Utility and Infrastructure Assumptions**: Assuming all properties have reliable utilities and infrastructure similar to U.S. standards. Verify water, electricity, internet, and sewage systems before purchasing.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Riviera Maya Cozy - US Citizen Buy House Mexico
2. TheLatinvestor - Mexico US Citizen Property Ownership
3. TheLatinvestor - American Land Mexico
4. Mexico Relocation Guide - Foreigners Own Property Mexico
5. Baja Properties - Understanding Fideicomiso
6. Sustainable Markets - Cozumel Real Estate Lawyer
7. Expat Den - Buy Property Mexico
8. Colibri Property - Mexico Preferred Destination US Buyers
9. Own in Yucatan - Documents Buy Property Mexico
10. Pacaso - Buying Property Mexico