Can an American buy land 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, Costa Rica, 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.

Can Americans legally buy land in Mexico or are there restrictions compared to locals?

Americans can legally purchase land in Mexico, but face constitutional restrictions that Mexican citizens do not encounter.

The Mexican Constitution establishes "restricted zones" where direct foreign ownership is prohibited - these include areas within 100 kilometers of international borders and 50 kilometers of any coastline. Mexican nationals can buy property anywhere in the country without these limitations.

Within restricted zones, Americans must use a fideicomiso (bank trust) where a Mexican bank holds legal title while the American retains all beneficial ownership rights, including the ability to sell, lease, and inherit the property. Outside restricted zones, Americans can own land directly with the same rights as Mexican citizens.

As of June 2025, this system has proven reliable for American investors, with over 500,000 Americans currently owning property in Mexico through various legal structures.

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

Are there specific zones in Mexico where Americans can't directly buy land, like near coasts or borders?

Yes, Americans cannot directly purchase land in Mexico's constitutionally defined "restricted zones."

These restricted areas encompass all land within 50 kilometers (31 miles) of any Mexican coastline and 100 kilometers (62 miles) of any international border with the United States or Guatemala. This means virtually all beachfront properties, including popular destinations like Cancun, Puerto Vallarta, and Cabo San Lucas, fall within restricted zones.

The restriction also affects border cities such as Tijuana, Mexicali, Juárez, and Nuevo Laredo, where many Americans consider investment properties. However, Americans can still acquire these properties through a fideicomiso trust arrangement with a Mexican bank serving as the trustee.

Major cities like Mexico City, Guadalajara, and San Miguel de Allende lie outside restricted zones, allowing direct American ownership. The Mexican government designed these restrictions to protect national sovereignty and prevent foreign control of strategic border and coastal areas.

What's the step-by-step process for an American to buy land in Mexico, from search to closing?

The Mexican property acquisition process for Americans involves seven distinct phases that typically take 60-90 days to complete.

**Phase 1: Property Search and Market Analysis (1-4 weeks)**Begin by identifying your target region and working with a licensed Mexican real estate agent who specializes in foreign buyer transactions. Conduct thorough market research on comparable sales, rental yields, and development plans for your chosen area.

**Phase 2: Offer Submission and Purchase Agreement (1-2 weeks)**Submit a formal offer through your agent and sign a "Contrato de Promesa de Venta" (promise to purchase contract) that outlines purchase price, closing timeline, and contingencies. This contract typically requires a 10% earnest money deposit.

**Phase 3: Due Diligence and Title Verification (2-3 weeks)**Hire a Mexican attorney to conduct a comprehensive title search, verify property boundaries, confirm all permits are current, and ensure no liens or legal disputes exist. This phase also includes obtaining a property appraisal and survey.

**Phase 4: Documentation and Permit Acquisition (2-4 weeks)**Obtain your RFC (Mexican tax ID) from the SAT office, apply for SRE permits if purchasing in a restricted zone, and gather all required documentation including apostilled bank statements and passport verification.

**Phase 5: Financing Arrangement (if applicable) (2-6 weeks)**If obtaining Mexican financing, complete the lender's application process, which typically requires 30-40% down payment and proof of income. American mortgage rates in Mexico currently range from 7-12% annually.

**Phase 6: Fideicomiso Setup (if in restricted zone) (1-2 weeks)**Select a Mexican bank as trustee, sign the trust agreement, and pay initial trust establishment fees of approximately $1,500-2,500 USD plus annual maintenance fees of $400-600 USD.

**Phase 7: Closing and Registration (1-2 weeks)**Sign the final escritura (deed) before a Mexican notary public, transfer the remaining purchase balance, pay closing costs (typically 4-7% of purchase price), and register the deed with the local Property Registry.

What documents and permits do Americans need to provide to complete a land purchase in Mexico?

American buyers must provide specific federal and state documentation to complete a Mexican property transaction.

The SRE (Secretaría de Relaciones Exteriores) permit represents the most critical document for restricted zone purchases, requiring federal government approval that demonstrates the property acquisition serves Mexico's economic interests. Bank statements must show sufficient funds for the purchase plus an additional 20% buffer to satisfy Mexican financial requirements.

All documents must be translated into Spanish by a certified translator, and certain documents require apostille authentication from the US State Department to be legally valid in Mexico.

Do Americans need to be in Mexico physically during the transaction or can it all be done remotely?

Most of the Mexican property purchase process can be completed remotely, but physical presence or legal representation is required for specific critical steps.

Americans can handle property search, initial negotiations, due diligence review, document preparation, and even permit applications from the United States through qualified Mexican attorneys and real estate professionals. Digital document signing and wire transfers facilitate most remote transactions.

However, Mexican law requires the buyer or their legal representative to appear before a notary public (notario) for the final escritura signing. This cannot be done remotely, but Americans can grant power of attorney to their Mexican attorney to sign on their behalf, avoiding the need for personal travel to Mexico for closing.

The power of attorney document must be notarized and apostilled in the United States, then registered with the Mexican consulate before it becomes valid for property transactions. This process typically adds 2-3 weeks to the timeline but allows complete remote completion of the purchase.

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

Is hiring a lawyer mandatory for Americans buying land in Mexico, and what does a lawyer typically handle?

While not legally mandated, hiring a Mexican-licensed attorney is practically essential for American property buyers and provides critical protection against common investment pitfalls.

Mexican notaries public (notarios) are required by law to oversee property transactions, but they represent the transaction's legality, not the buyer's interests. A private attorney specifically advocates for the American buyer's rights and financial protection throughout the process.

Mexican real estate attorneys typically handle comprehensive due diligence including title searches, lien verification, permit validation, and boundary confirmations. They also coordinate with notaries, banks, and government offices to ensure proper documentation, prepare contracts that protect buyer interests, and identify potential legal issues before they become costly problems.

Attorney fees generally range from $2,000-5,000 USD depending on transaction complexity, but this investment often saves Americans tens of thousands of dollars by preventing purchase of properties with hidden liens, permit violations, or boundary disputes. As of mid-2025, attorneys have become increasingly important due to enhanced Mexican government scrutiny of foreign property purchases.

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

Do Americans need to have residency, a visa, or any special immigration status to own land in Mexico?

No residency, visa, or special immigration status is required for Americans to purchase and own land in Mexico.

Americans can buy Mexican property while visiting on a standard tourist visa (FMM) obtained upon entry to Mexico. Property ownership and immigration status remain completely separate under Mexican law, meaning you can own real estate without any obligation to live in Mexico or obtain long-term residency permits.

However, if you plan to spend more than 180 days per year in Mexico, you must apply for temporary or permanent residency through Mexico's immigration system. Property ownership does not automatically grant residency rights, nor does it accelerate the residency application process.

Some Americans mistakenly believe that purchasing property creates a path to Mexican citizenship or residency, but these are entirely separate legal processes. You can own multiple properties in Mexico for decades while remaining a tourist for immigration purposes, provided you don't exceed the 180-day annual limit.

Can Americans get a mortgage in Mexico to buy land, and if yes, what are the current rates and conditions?

Americans can obtain mortgages from Mexican banks and specialized lenders, though the process involves stricter requirements and higher interest rates than US financing.

As of June 2025, Mexican mortgage rates for Americans typically range from 7-12% annually, with most lenders requiring 30-40% down payments and minimum property values of $250,000 USD. The application process generally takes 4-8 weeks and requires proof of income, US credit history, and substantial cash reserves.

Several Mexican institutions actively serve American buyers, including Banco Azteca, HSBC Mexico, and specialized foreign buyer lenders like Global Mortgage and Dream Loans Mexico. These lenders often cap loans at 70% of property value and may require properties to be held in fideicomiso trusts even outside restricted zones.

Alternative financing options include seller financing, where property owners accept installment payments directly from buyers, and US-based portfolio lenders who offer international property loans. Many Americans find that cash purchases provide stronger negotiating positions and faster closing timelines in the competitive Mexican market.

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.

What are the common mistakes Americans make when buying land in Mexico, and how can they avoid them?

The most frequent and costly mistake Americans make is attempting to purchase ejido land, which is communally-owned agricultural property that cannot be legally sold to foreigners.

Ejido land comprises approximately 60% of Mexico's territory and is often offered to unsuspecting foreign buyers at attractive prices. These transactions are completely invalid under Mexican law, resulting in total loss of investment. Americans must verify that any property they consider carries a clear fee simple title (dominio pleno) and is not ejido, communal, or government land.

Another critical error involves skipping comprehensive due diligence and relying solely on seller representations. Americans often fail to conduct proper title searches, boundary surveys, and permit verification, leading to purchases of properties with liens, boundary disputes, or construction violations that can cost hundreds of thousands of dollars to resolve.

Many Americans also underestimate the total cost of ownership by focusing only on purchase price while ignoring closing costs (4-7% of value), annual maintenance fees for fideicomiso trusts ($400-600 USD), property taxes, and potential HOA fees that can significantly impact investment returns.

Working exclusively with English-speaking agents who lack proper Mexican licensing represents another common pitfall. Only licensed Mexican real estate professionals can legally represent property transactions, and unlicensed facilitators often provide inaccurate information about legal requirements and market conditions.

Which areas in Mexico are currently considered the best for Americans to buy land for living, renting, or capital growth, based on tourism trends, rental yields, and forecasts?

The Riviera Maya region, particularly Tulum and Playa del Carmen, offers the strongest combination of capital appreciation, rental yields, and tourism growth for American investors as of mid-2025.

Tulum has experienced annual property appreciation of 8-12% over the past three years, with luxury condos and land parcels commanding premium prices due to its UNESCO World Heritage sites and international airport development. Vacation rental yields in Tulum average 8-15% annually, supported by consistent international tourism and limited developable land supply.

Mexico City represents the most stable market for long-term capital growth, with average annual appreciation of 6-10% and strong rental demand from domestic and international professionals. The city's economic diversification, population growth of 1.2% annually, and infrastructure improvements support sustained property value increases.

Puerto Vallarta continues to attract American retirees and vacation home buyers, offering rental yields of 6-10% annually and steady appreciation of 5-8%. The city's established expat community, direct flights from major US cities, and mature tourism infrastructure provide investment stability.

Emerging markets like Oaxaca Coast and Mérida offer higher potential returns but carry increased risk. Oaxaca coastal properties have appreciated 15-20% annually in select areas, while Mérida's colonial center attracts growing numbers of American remote workers and retirees seeking affordable luxury.

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

What's the current price range for land in Mexico, broken down by popular cities and regions like Tulum, San Miguel, Puerto Vallarta, and Oaxaca?

Mexican land and property prices vary dramatically by location, with coastal and expat-popular areas commanding significant premiums over interior cities.

These prices reflect June 2025 market conditions and represent significant increases from pre-pandemic levels. Tulum has experienced the most dramatic appreciation, with some beachfront lots tripling in value since 2020 due to infrastructure development and international recognition.

Mexico City's luxury market, particularly in Polanco and Roma Norte, commands the highest per-square-meter prices in the country, often exceeding $10,000 USD per square meter for premium penthouses and new developments.

Oaxaca Coast remains the most affordable option for Americans seeking beachfront property, though prices are rising rapidly as infrastructure improves and tourism increases. Many experts predict Oaxaca will follow Tulum's price trajectory over the next 5-7 years.

What are the tax implications, annual fees, and reporting obligations for Americans owning land in Mexico?

American property owners in Mexico face both Mexican and US tax obligations that require careful planning and compliance to avoid penalties.

**Mexican Tax Obligations:**Mexican property taxes (predial) are generally low, typically ranging from 0.1-0.3% of assessed property value annually. However, assessed values often significantly lag behind market values, resulting in relatively modest tax bills. Property owners must also pay annual fideicomiso trust fees of $400-600 USD for properties in restricted zones.

**US Tax Reporting Requirements:**Americans must report foreign property ownership to the IRS if the total value exceeds certain thresholds. Rental income from Mexican properties must be reported on US tax returns, though Americans can often claim foreign tax credits for Mexican taxes paid. Capital gains from property sales are subject to both Mexican and US taxation, though tax treaties may provide some relief.

**Transfer and Transaction Taxes:**Property transfers in Mexico incur acquisition tax (ISAI) of 2-4% of property value, plus notary fees of 1-2% and registration costs of 0.5-1%. When selling, Americans face Mexican capital gains tax of 25-35% on profits, though rates vary based on holding period and residency status.

**Annual Compliance:**Mexican tax authorities require annual property declarations for high-value properties, and Americans must maintain detailed records of all property-related expenses, improvements, and income for both Mexican and US tax purposes.

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. MyCasa Mexico - How Americans Can Buy Land in Mexico 2025
2. Easy Legal Mexico - FAQ
3. The Latin Investor - Buying Property Mexico American
4. Riviera Maya Cozy - Buy Property Mexico Foreigner
5. Mex Law - Foreigners Buying Real Estate in Mexico
6. The Latin Investor - American Land Mexico
7. Pacaso - Buying Property in Mexico
8. Bellenty - How Mortgages Work in Mexico for US Citizens
9. Brevitas - Top Mexico Real Estate Investment Locations
10. Global Property Guide - Mexico Price History