Yes, Americans can buy property in Mexico, but ...

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?

THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

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.

Can Americans buy the same types of property in Mexico as locals, or are there restrictions?

Americans can buy most property types in Mexico, but ownership structures differ from those available to Mexican citizens depending on location.

Outside restricted zones (beyond 50km from coastlines and 100km from international borders), Americans enjoy identical ownership rights as Mexican nationals. You can purchase residential homes, condominiums, commercial buildings, and land with direct ownership through standard property deeds.

Within restricted zones, the Mexican Constitution prohibits direct foreign ownership of land. Americans must use a fideicomiso (bank trust) for residential properties or establish a Mexican corporation for commercial investments. Under a fideicomiso, a Mexican bank holds legal title while you retain all ownership benefits including the right to sell, lease, mortgage, and inherit the property.

The bank trust system operates for 50-year renewable terms and costs approximately 0.5% of property value annually. As of September 2025, this remains the primary legal mechanism for Americans purchasing beachfront properties in popular destinations like Cancun, Puerto Vallarta, and Cabo San Lucas.

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

Are there specific rules for buying property near the coast or borders?

Yes, Mexico's Constitution establishes specific restricted zones where foreign ownership requires special legal structures.

All foreign purchases in restricted zones require permits from Mexico's Ministry of Foreign Affairs (SRE). The permit process typically takes 30-60 days and costs approximately $2,000-$3,000 including legal fees.

Do Americans need a residency visa to buy property in Mexico, or can they do it as tourists?

Americans can purchase Mexican property as tourists without any residency requirements.

A valid U.S. passport and tourist visa (FMM) obtained at entry provide sufficient legal status for property purchases. No minimum stay period or residency application is required before buying real estate.

However, property ownership can facilitate obtaining Mexican residency if desired. As of September 2025, owning property valued at approximately $175,000 USD helps demonstrate economic solvency for temporary residency applications. Permanent residency requires higher asset thresholds or income requirements.

You must obtain a Mexican tax ID (RFC) regardless of residency status. The RFC is mandatory for all property transactions and takes 2-3 weeks to process through Mexican tax authorities or can be obtained through your legal representative.

Tourist status allows property ownership but limits certain activities like establishing rental businesses without proper permits.

Do you have to be physically present in Mexico to complete the purchase process?

Physical presence in Mexico is not required to complete property purchases.

Americans can execute the entire transaction remotely by granting Power of Attorney to a qualified Mexican attorney or trusted representative. The Power of Attorney must be notarized by a U.S. notary public, apostilled by the appropriate state authority, and translated into Spanish by a certified translator in Mexico.

Your representative can sign all closing documents, including the final deed (Escritura), on your behalf before the mandatory Notario Público. This process saves travel costs and time while ensuring legal compliance.

However, many buyers choose to be present for the final closing, especially for first-time purchases, to better understand the process and inspect the property. Virtual closings have become increasingly common since 2020, with video conference participation accepted by most notaries.

If using Power of Attorney, ensure your representative provides regular updates and documentation throughout the transaction process.

Don't lose money on your property in Mexico

100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.

Download Now

What taxes and ongoing fiscal obligations should Americans expect when owning property in Mexico?

American property owners in Mexico face several tax obligations both at purchase and annually.

Purchase costs range from 5-12% of property value, including acquisition tax (2-4%), notary fees (1-2%), registration fees (0.5-1%), and fideicomiso setup costs for restricted zones (approximately $5,000-$8,000 initially). Title insurance, while optional, costs 0.5-1% of property value and is highly recommended.

Annual obligations include property tax (predial) ranging from 0.1-0.3% of assessed value, paid quarterly to municipal authorities. Fideicomiso trust fees cost approximately 0.5% of property value annually, paid to the trustee bank.

Americans must also consider U.S. tax implications. The IRS requires reporting foreign real estate ownership on Form 8938 if total foreign assets exceed $200,000. Rental income must be reported on both Mexican and U.S. tax returns, though foreign tax credits may apply.

Capital gains tax applies when selling, calculated on the peso-denominated gain. Mexican residents pay rates from 1.92-35%, while non-residents face a flat 25% rate on gains. Proper record-keeping of improvement costs can reduce taxable gains.

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

What's the step-by-step process for buying property in Mexico, and which documents are required?

The Mexican property purchase process follows a structured legal framework overseen by Notarios Públicos.

1. Property selection and price negotiation with seller or real estate agent
2. Sign purchase agreement (Promesa de Compra-Venta) with 5-10% deposit
3. Obtain Mexican tax ID (RFC) from tax authorities
4. Hire qualified real estate attorney and select Notario Público
5. Complete due diligence including title search, lien verification, and property inspection
6. For restricted zones: Apply for SRE permit and establish fideicomiso
7. Secure financing or prepare full payment funds
8. Schedule closing with all parties and Notario Público
9. Sign final deed (Escritura) and transfer remaining funds
10. Register property in Public Registry of Property

Required documents include valid U.S. passport, Mexican tax ID (RFC), proof of legal residence address, bank statements or proof of funds, purchase agreement, and SRE permit for restricted zones. For fideicomiso purchases, additional trust documentation is required.

The Notario Público serves as both legal authority and government representative, ensuring tax compliance and proper registration. This differs significantly from U.S. real estate transactions where notaries simply witness signatures.

Is it mandatory to hire a lawyer, and if so, how do you choose a good one?

While not legally mandatory, hiring a qualified real estate attorney is strongly recommended for American buyers in Mexico.

The Notario Público is required by law for all property transfers but represents the government's interests in ensuring legal compliance and tax collection. A private attorney represents your specific interests throughout the transaction, reviewing contracts, conducting due diligence, and protecting against potential issues.

Choose attorneys based on specific qualifications: experience with foreign buyers, bilingual communication, membership in local bar associations, and specialization in Mexican real estate law. Request references from other American clients and verify their license through state bar associations.

Effective attorneys should explain fideicomiso structures clearly, coordinate with your U.S. tax advisors, and maintain transparent fee structures. Expect to pay 1-2% of property value for comprehensive legal services.

Red flags include requests for large upfront payments, promises of unusually fast closings, or inability to provide professional references. Always verify attorney credentials independently before proceeding.

Which cities or regions in Mexico are the most popular with Americans for living, renting out, or investing?

American preferences in Mexico concentrate around specific regions offering lifestyle amenities, investment potential, and established expat communities.

For permanent living, Americans gravitate toward San Miguel de Allende for its colonial architecture and cultural scene, Lake Chapala for its temperate climate and retiree community, and Mérida for safety and modern amenities. Mexico City attracts younger professionals seeking career opportunities and urban lifestyle.

Investment and rental properties perform strongest in tourism-driven markets. The Riviera Maya, including Playa del Carmen and Tulum, generates the highest rental yields due to international tourism demand. Puerto Vallarta offers balanced appeal for both vacation rentals and long-term expat tenants.

Cancun remains popular for investment properties targeting the short-term rental market, while Los Cabos attracts luxury property investors. Emerging markets like Mazatlán and Puerto Escondido offer lower entry prices with growing American expat populations.

Each region presents distinct advantages: coastal areas provide rental income potential but require restricted zone legal structures, while inland cities offer direct ownership with lower property appreciation rates.

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.

Which areas currently rank highest for livability, rental yields, tourism numbers, and capital growth potential?

Mexican markets vary significantly across key investment and livability metrics, with different regions excelling in specific categories.

Mérida leads livability rankings due to low crime rates, excellent healthcare infrastructure, and year-round temperate climate. The city offers high-quality internet, modern shopping centers, and growing expat services while maintaining affordable living costs compared to U.S. cities.

Rental yields peak in tourism-dependent markets. Tulum generates 8-12% annual returns on vacation rentals, while Playa del Carmen averages 6-10% depending on property location and management. Puerto Vallarta provides more stable 5-8% yields with both vacation and long-term rental demand.

Tourism numbers concentrate in Cancun (6.2 million annual visitors), Puerto Vallarta (2.8 million), and Los Cabos (2.3 million) as of 2024. These destinations support robust short-term rental markets but face seasonal occupancy fluctuations.

Capital growth potential appears strongest in Tulum and surrounding Riviera Maya areas, with property values increasing 15-25% annually from 2020-2024. However, this rapid growth raises sustainability concerns about market oversaturation.

Emerging markets like Mazatlán and Mérida show moderate but consistent 5-8% annual appreciation with lower volatility than beach destinations.

What is the current breakdown of average property prices across major Mexican cities and regions?

Mexican property prices vary dramatically by location, property type, and proximity to tourist areas as of September 2025.

Coastal premium markets command significantly higher prices. Tulum beachfront condominiums start around $400,000, while similar properties in Puerto Vallarta range from $250,000-$600,000. Los Cabos luxury properties frequently exceed $1 million.

Inland cities offer better value propositions. San Miguel de Allende colonial homes average $300,000-$500,000, while Mérida properties range from $150,000-$400,000 for comparable quality and size.

Mexico City presents the broadest price spectrum, from $180,000 apartments in outer neighborhoods to $800,000+ luxury condominiums in Polanco and Roma Norte.

Can foreigners get a mortgage in Mexico, and what are the typical rates, conditions, and tips for approval?

Foreign nationals can obtain mortgages from Mexican banks, though terms and requirements differ significantly from U.S. financing.

Mexican mortgage rates for foreigners typically range from 7-10% annually, substantially higher than U.S. rates. Loan terms extend 5-20 years, with most banks preferring shorter durations for foreign borrowers. Down payment requirements range from 20-35% of property value.

Qualification requirements include Mexican tax ID (RFC), proof of income from verifiable sources, debt-to-income ratios below 35%, and established credit history. Banks prefer borrowers with Mexican bank accounts and demonstrated financial stability over 12-24 months.

Major banks serving foreigners include BBVA Bancomer, Santander, and Banamex. Some international banks operating in Mexico offer more favorable terms for qualified clients with existing relationships.

Alternative financing strategies include seller financing, U.S. home equity loans, or cash purchases followed by Mexican refinancing. Many Americans find using U.S. financing more cost-effective given lower interest rates and familiar loan processes.

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 be avoided?

American buyers frequently encounter preventable issues that result in financial losses or legal complications.

The most costly mistake involves purchasing ejido (communal) land without proper conversion to private property. Ejido land cannot be legally titled to foreigners and resale options remain severely limited. Always verify land status through the National Agrarian Registry before purchase.

Skipping comprehensive due diligence leads to discovering undisclosed liens, unpaid taxes, or title defects after closing. Insist on complete title searches, property tax verification, and professional property inspections. Budget additional time for this process rather than rushing to close.

Underestimating total costs catches many buyers unprepared. Beyond purchase price, budget for closing costs (5-12%), annual property taxes, fideicomiso fees, maintenance, and property management if buying for investment. Create realistic financial projections including currency exchange fluctuations.

Failing to understand fideicomiso structures causes confusion about ownership rights in restricted zones. Research bank trust mechanisms thoroughly and choose trustee banks with strong international experience and English-language services.

Working with unqualified professionals jeopardizes the entire transaction. Verify attorney credentials, notary appointments, and real estate agent licenses through appropriate authorities. Request references from other American clients and independently verify all professional qualifications.

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 Blue - Foreign Property Ownership Guide
2. The Latinvestor - Mexico Land Ownership Issues
3. MexLaw - Property and Real Estate Laws Guide
4. Mexperience - Buying and Owning Homes
5. Riviera Maya Cozy - Property Buying Guide
6. Taxes for Expats - Property Buying Guide
7. Remitly - Property Purchase Guide
8. The Latinvestor - Property Buying Guide
9. International Living - Mexico Investment Analysis
10. Mexico Life - Restricted Zone FAQ