Can an American own 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, Brazil, Argentina, 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, Cancun, 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 own land in Mexico, or are there restrictions compared to Mexican citizens?

Americans can legally own land in Mexico, but ownership rights depend entirely on the property's location within the country.

Outside the "restricted zone," Americans enjoy identical property ownership rights to Mexican citizens. You can hold direct title to the land, sell it freely, rent it out, and pass it to your heirs without any special arrangements or ongoing fees.

The restricted zone encompasses areas within 100 kilometers (62 miles) of international borders and 50 kilometers (31 miles) of any coastline. In these zones, foreigners cannot own land directly but must use a fideicomiso trust structure administered by a Mexican bank. This system provides Americans with full beneficial ownership rights while the bank holds legal title as trustee.

As of June 2025, approximately 60% of Mexico's most desirable real estate markets fall within the restricted zone, including popular destinations like Cancun, Puerto Vallarta, Cabo San Lucas, and Playa del Carmen.

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

Are there specific zones in Mexico where Americans are not allowed to own land directly?

Yes, the Mexican Constitution strictly defines restricted zones where foreigners cannot hold direct title to land.

The restricted zone includes two specific geographical boundaries: within 100 kilometers of any international border (including the US-Mexico border, Guatemala, and Belize borders) and within 50 kilometers of any coastline (both Pacific and Atlantic coasts, including the Gulf of Mexico and Caribbean Sea).

These restrictions affect major real estate markets including the entire Riviera Maya, Los Cabos region, Puerto Vallarta, Mazatlan, border cities like Tijuana and Juarez, and popular expat destinations such as San Miguel de Allende and Lake Chapala area.

The restricted zone covers approximately 40% of Mexico's total land area but includes roughly 80% of the country's prime tourism and expat-focused real estate markets. Cities like Mexico City, Guadalajara (center), and Merida fall outside these zones, allowing direct foreign ownership.

Can Americans own land through a fideicomiso, and how does that trust structure actually work?

Americans can own land in restricted zones through a fideicomiso trust, which provides complete beneficial ownership while complying with constitutional restrictions.

The fideicomiso structure involves three parties: the American buyer (beneficiary), a Mexican bank (trustee), and the property seller. The bank holds legal title to the property while the American beneficiary enjoys all ownership rights including use, modification, rental income, sale proceeds, and inheritance transfer.

Trust terms last 50 years and are renewable indefinitely for additional 50-year periods. The bank cannot act without written instructions from the beneficiary and has no rights to use or sell the property. Setup costs typically range from $2,000 to $2,500, with annual administration fees between $500 and $1,000 depending on the bank and property value.

As of June 2025, over 40 Mexican banks offer fideicomiso services, with established institutions like BBVA Mexico, Banorte, and Santander Mexico handling the majority of foreign property trusts. The Mexican government requires Ministry of Foreign Affairs permits for each trust, typically processed within 15-30 business days.

What are the visa or residency requirements for an American to buy and own land in Mexico?

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

Americans can buy property while visiting Mexico on a standard tourist visa (FMM), which allows stays up to 180 days. The purchase process requires obtaining a Mexican tax identification number (RFC), which can be secured through a legal representative if you're not a Mexican resident.

Property ownership can support residency applications if values meet specific thresholds: temporary residency for properties worth $220,000 USD or more, and permanent residency for properties valued at $440,000 USD or higher. However, these residency benefits are optional advantages rather than purchase requirements.

Foreign buyers must demonstrate legal source of funds, typically through bank statements showing sufficient assets to complete the transaction. As of mid-2025, Mexican authorities have increased scrutiny on large cash transactions, requiring detailed documentation for purchases exceeding $100,000 USD.

Do I need to be physically present in Mexico to purchase land, or can everything be done remotely?

Physical presence is not required for most of the land purchase process, though some steps may benefit from in-person completion.

The majority of transactions can be completed remotely using a power of attorney (POA) granted to a qualified Mexican attorney or representative. The POA allows your representative to sign documents, open bank accounts for fideicomiso trusts, and complete the property transfer on your behalf.

Key steps that can be done remotely include property searches, purchase negotiations, due diligence reviews, document preparation, fund transfers, and final closing procedures. However, some banks require personal appearance for fideicomiso account opening, and complex transactions may benefit from buyer presence during final negotiations.

As of June 2025, approximately 70% of American buyers complete their Mexican land purchases entirely remotely, with digital document signing and electronic fund transfers becoming standard practice among established real estate firms and legal offices.

What's the exact step-by-step process for an American to buy land in Mexico, and which documents are required?

The Mexican land purchase process follows specific legal requirements that typically take 60-90 days from offer to closing.

Step	Process	Timeline
1. Property Selection	Work with licensed real estate agent, verify property details	1-4 weeks
2. Offer & Agreement	Submit offer, sign purchase agreement (contrato de promesa)	1-2 weeks
3. Earnest Money	Deposit 5-10% of purchase price in escrow	1-3 days
4. Due Diligence	Title search, lien check, verify property is not ejido land	2-3 weeks
5. RFC Obtainment	Secure Mexican tax ID through attorney or SAT office	1-2 weeks
6. Trust Setup	Establish fideicomiso if in restricted zone, get permits	2-4 weeks
7. Closing	Sign escritura before notary, transfer funds, register property	1-2 days

Required documents include valid US passport, proof of address from home country, Mexican RFC tax ID, signed purchase agreement, bank statements proving sufficient funds, trust documents (if applicable), and notarized power of attorney (for remote purchases).

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

Is hiring a Mexican lawyer or notary mandatory when buying land as a foreigner, or just highly recommended?

Hiring a Mexican notary public is legally mandatory for all real estate transactions, while hiring a separate lawyer is highly recommended but not required by law.

Mexican notaries are government-appointed legal professionals who verify property titles, ensure all taxes are current, prepare the escritura (public deed), and register the transaction with the Public Registry of Property. Unlike US notaries, Mexican notaries are qualified attorneys with extensive real estate law training and government authority.

A separate attorney provides additional protection through independent due diligence, title searches, contract review, and advocacy for buyer interests throughout the process. Lawyers typically charge 1-2% of property value, while notary fees range from 1-2% of purchase price depending on location and complexity.

As of June 2025, approximately 85% of American buyers hire both a notary and separate legal counsel, with the remaining 15% relying solely on the notary's services for straightforward transactions in established developments.

What are the taxes, fees, and fiscal implications for Americans who buy and own land in Mexico?

Americans face several tax obligations when buying and owning Mexican land, with costs varying by state and property value.

Tax/Fee Type	Rate/Amount	When Paid
Acquisition Tax	2-4% of property value	At closing
Notary Fees	1-2% of property value	At closing
Annual Property Tax	Less than 0.1% of assessed value	Annually
Fideicomiso Setup	$2,000-$2,500	At trust creation
Annual Trust Fees	$500-$1,000	Annually
Capital Gains Tax	25-35% for non-residents	At sale
Rental Income Tax	Up to 25% withholding	Monthly on rental income

Capital gains taxes for non-residents typically range from 25-35% of the gain, though primary residence exemptions may apply if the property is owned for five or more years. Rental income faces up to 25% withholding tax for non-residents, while Mexican residents pay progressive rates based on total income.

Property taxes (predial) in Mexico are notably low compared to US standards, often representing less than 0.1% of assessed property value annually. However, assessed values may not reflect current market prices, particularly in rapidly appreciating areas.

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.

Can Americans get mortgages in Mexico for land purchases, what are the conditions, and how do rates compare to U.S. standards?

Americans can obtain mortgages in Mexico for land purchases, though options are more limited and requirements more stringent than US financing.

Mexican lenders typically require 15-40% down payments for foreign buyers, with most banks preferring 20-30% minimum. Current interest rates average around 11% APR for peso-denominated loans, significantly higher than US mortgage rates as of mid-2025.

Eligibility requirements include verifiable income (often requiring 2-3 years of tax returns), good credit history in home country, debt-to-income ratios below 35%, and sometimes Mexican residency status. Cross-border mortgages in US dollars are available but limited to specific lenders and premium properties.

Major Mexican banks offering foreigner mortgages include BBVA Mexico, Santander, and Banorte, with loan terms typically ranging from 10-20 years. Alternative financing through developer financing or US-based international lenders may offer more competitive terms for qualified buyers.

What are the most popular and safest areas in Mexico where Americans tend to buy land, and why?

Americans concentrate their Mexican land purchases in specific regions that offer security, infrastructure, and established expat communities.

1. **Riviera Maya (Quintana Roo)**: Playa del Carmen and Tulum attract buyers seeking tourism investment opportunities, with strong rental demand and international airport access.2. **Puerto Vallarta (Jalisco)**: Appeals to retirees and vacation home buyers with established healthcare, direct flights from major US cities, and stable expat community.3. **Los Cabos (Baja California Sur)**: Premium market targeting luxury buyers, offering high-end amenities, golf courses, and strong property appreciation.4. **San Miguel de Allende (Guanajuato)**: Colonial charm and UNESCO World Heritage status attract cultural enthusiasts and retirees seeking authentic Mexican experience.5. **Merida (Yucatan)**: Growing expat destination offering affordability, safety, colonial architecture, and proximity to beaches and archaeological sites.

These areas offer established legal frameworks for foreign ownership, reliable utilities, quality healthcare facilities, and active real estate markets with professional services catering to international buyers.

Which regions or cities currently offer the best rental yields, capital appreciation, and lifestyle for landowners?

Mexican markets offer varying combinations of rental yields, appreciation potential, and lifestyle benefits depending on location and property type.

Riviera Maya markets, particularly Playa del Carmen and Tulum, deliver the highest rental yields at 6-12% annually for well-located tourism properties. Short-term vacation rentals in these areas can generate 8-15% returns during peak seasons, though occupancy varies seasonally.

Puerto Vallarta provides balanced returns with 4-8% rental yields and steady 3-6% annual appreciation, combined with excellent retiree lifestyle amenities including quality healthcare and established expat services.

Merida offers the strongest appreciation potential, with property values increasing 8-12% annually as of 2025, while providing affordable living costs and authentic Mexican cultural experiences. Rental yields average 4-6% but are growing as the expat community expands.

Los Cabos targets luxury market segments with premium rental rates and strong appreciation in waterfront properties, though yields typically range 3-6% due to higher acquisition costs and seasonal demand patterns.

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

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

Americans frequently encounter preventable pitfalls when purchasing Mexican land, often stemming from unfamiliarity with local laws and processes.

1. **Skipping Due Diligence**: Failing to verify clear title, check for liens, or confirm the property isn't ejido (communal) land can result in ownership disputes or invalid purchases.2. **Inadequate Legal Representation**: Relying solely on seller's attorney or real estate agent instead of hiring independent legal counsel often leads to contract issues and missed red flags.3. **Misunderstanding Fideicomiso Structure**: Assuming US property laws apply or not comprehending trust mechanics can create unrealistic expectations and financial surprises.4. **Ignoring Tax Obligations**: Underestimating Mexican tax requirements, particularly ongoing obligations for rental income and capital gains, can result in penalties and legal complications.5. **Insufficient Fund Documentation**: Failing to properly document money source for large transactions can delay closings and trigger anti-money laundering investigations.

Prevention strategies include conducting comprehensive title searches, hiring qualified independent attorneys, budgeting for all closing costs and ongoing fees, understanding fideicomiso terms completely, and maintaining detailed financial documentation throughout the process.

Working with established real estate professionals who specialize in foreign buyer transactions and have proven track records with American clients significantly reduces these risks while ensuring compliance with all Mexican legal requirements.

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. Mexican Consulate Property Acquisition Guide
2. Wise - Buying Land in Mexico
3. TheLatinvestor - American Land Ownership in Mexico
4. Mexico Relocation Guide - Foreign Property Ownership
5. Riviera Maya Real Estate - Restricted Zone Information
6. Cabo Real Estate - Fideicomiso Explanation
7. Easy Legal Mexico - Fideicomiso vs Corporation
8. Taxes for Expats - Mexican Property Tax Guide
9. TheLatinvestor - US Citizens Property Ownership
10. International Living - Mexico Real Estate Guide