Mexico: the property buying guide (updated June 2025)

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

Mexico continues to attract foreign property buyers with its warm climate, rich culture, and relatively affordable real estate as we reach mid-2025.

Whether you're looking for a retirement haven, vacation home, or investment opportunity, understanding the Mexican property market is crucial before making your move. This comprehensive guide covers everything from legal requirements to the best locations for foreign buyers.

If you want to go deeper, you can check our pack of documents related to the real estate market in Mexico, based on reliable facts and data, not opinions or rumors.

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, Guadalajara, and Playa del Carmen. 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 foreigners legally buy property anywhere in Mexico, and what are the rules around the restricted zones?

Foreigners can legally buy property throughout Mexico, but coastal and border areas have special requirements known as restricted zones.

The Mexican Constitution establishes "restricted zones" - areas within 50 kilometers (31 miles) of any coastline and 100 kilometers (62 miles) of international borders. In these zones, foreigners cannot hold direct title to the property. Instead, they must use a fideicomiso - a bank trust where a Mexican bank holds the legal title on your behalf while you retain all ownership rights.

Through the fideicomiso system, you can sell, rent, renovate, or pass the property to your heirs just like any other owner. The trust is valid for 50 years and can be renewed indefinitely, giving you complete control over your investment. Outside these restricted zones - in cities like Mexico City, Guadalajara, or San Miguel de Allende - foreigners can own property outright with their name on the title deed, just like Mexican citizens.

The fideicomiso arrangement has been successfully used by thousands of foreign property owners for decades, providing a secure legal framework for coastal property ownership.

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

What types of visas or residency options exist for foreign property buyers, and does owning real estate help with obtaining them?

You don't need any visa or residency to buy property in Mexico - you can purchase real estate as a tourist with just your passport and tourist visa (FMM).

However, if you plan to live in Mexico or want to open utilities in your name, you'll need either Temporary Residency (valid for up to 4 years, renewable annually) or Permanent Residency (no renewal required, allows you to work in Mexico). While owning property doesn't automatically grant you residency, it can strengthen your application significantly.

Properties valued above $220,000-$550,000 USD (depending on the consulate) can help qualify you for residency through the economic solvency route. This means your property investment demonstrates financial stability, making the residency application process smoother. After four years of temporary residency, you can apply for permanent status.

Many property buyers start as tourists, purchase their home, then apply for residency to enjoy longer stays and additional benefits like opening bank accounts and getting Mexican driver's licenses.

What's the step-by-step process of buying property in Mexico as a foreigner?

The Mexican property buying process follows a clear sequence of mandatory steps that protect both buyers and sellers.

First, find your property and negotiate the price with a reputable real estate agent. Then sign a purchase agreement (promesa de compra-venta) which usually requires a 5-10% deposit. Next, hire a Notario Público - a specialized attorney who oversees all property transactions in Mexico.

The notary conducts due diligence to verify clear title, paid taxes, and no liens. You'll need to obtain an SRE permit (permission from the Ministry of Foreign Affairs for foreign buyers) and set up a fideicomiso if the property is in a restricted zone. After paying closing costs and the remaining balance via wire transfer or cashier's check, you'll sign the deed (escritura) before the notary with all parties present.

Finally, the notary registers the property with the Public Registry, completing the transfer. While optional, purchasing title insurance and hiring your own real estate attorney provides added protection throughout the process.

The entire process typically takes 30-60 days from accepted offer to closing.

What documents do you need, and do you have to be physically present in Mexico to complete the purchase?

Document Type	Details
Valid passport	Must be current and valid for at least 6 months
Tourist visa (FMM) or residency card	Standard tourist entry document is sufficient
RFC (Mexican tax ID number)	Obtained during the purchase process
Proof of address	Utility bill or bank statement from home country
Bank statements or proof of funds	To demonstrate financial capacity
Purchase agreement	Signed contract with seller
SRE permit	Arranged by notary for foreign buyers

You don't have to be physically present in Mexico to complete the purchase - you can grant power of attorney to a lawyer or trusted representative to sign on your behalf.

This flexibility is particularly useful for buyers who can't make multiple trips to Mexico during the buying process. The power of attorney must be properly notarized and apostilled in your home country, then translated by a certified translator in Mexico.

Can you buy property in cash or get a mortgage as a foreigner?

Cash dominates the Mexican real estate market - over 90% of transactions are cash deals, giving cash buyers significant negotiating power and faster closing times.

Mortgage options for foreigners exist but come with significant limitations. Mexican banks typically require permanent residency, down payments ranging from 20-40%, and charge interest rates of 8-12% (considerably higher than US/Canada rates). Maximum terms usually run 15-20 years, and you'll need income verification and Mexican credit history.

Alternative financing includes developer financing, which is common in new developments, especially pre-construction projects. Some specialized cross-border lenders cater to foreign buyers, though these often come with even higher rates. Private lending from individuals or investment groups is another option, typically for short-term financing.

For most foreign buyers, cash remains the preferred and simplest option, avoiding the complexity and high costs of Mexican mortgages while providing stronger negotiating positions.

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

What taxes, closing costs, and ongoing fees should you expect?

Understanding the full cost of property ownership in Mexico helps you budget accurately for your investment.

Closing costs typically range from 4-8% of the purchase price. The largest component is acquisition tax at 2-4% of property value (up to 6.5% in some states). Notary fees run 0.5-2% of property value, while property registration costs about 1%. If you're buying in a restricted zone, fideicomiso setup fees are $500-1,000 USD.

Optional but recommended costs include title insurance at 0.5-1% of purchase price, legal fees of $1,500-3,000 USD, and appraisals at $300-500 USD. These additional protections are worth the investment for peace of mind.

Ongoing annual costs are remarkably low compared to many countries. Property tax (predial) typically runs just $200-500 USD annually, fideicomiso maintenance fees are $500-700 USD per year, and HOA fees vary by development but average $100-300 monthly in gated communities.

The low ongoing costs make Mexico particularly attractive for long-term property ownership.

Where do most foreigners buy property in Mexico, and why are these areas so popular?

Foreign property buyers concentrate in specific Mexican destinations that offer the perfect blend of lifestyle, infrastructure, and investment potential.

The Riviera Maya (Cancun, Playa del Carmen, Tulum) leads with Caribbean beaches, strong rental markets, and international airport access. Puerto Vallarta attracts buyers with Pacific coast charm, established expat infrastructure, and year-round tourism. San Miguel de Allende appeals to those seeking colonial architecture, a thriving arts scene, and UNESCO World Heritage status.

Mexico City draws urban sophisticates with business opportunities and cultural richness, while Merida wins hearts with safety, authentic Mexican culture, and a growing digital nomad community. These areas have developed robust support systems for foreign residents including quality healthcare facilities, international schools, modern infrastructure, and English-speaking services.

Each destination offers established expat communities that ease the transition to Mexican life, along with proven rental income potential for investors.

How do real estate prices and rental yields compare across major expat hotspots?

Location	Average Property Price	Annual Rental Yield	Market Characteristics
San Miguel de Allende	$200,000-600,000+	4-6%	Colonial homes, rising demand from remote workers
Cancun	$170,000-550,000 (condo)	4.4-6.5%	Strong vacation rental occupancy rates
Mexico City	$200,000-500,000 (apartment)	5.7-7.7%	Highest yields, urban rental demand
Tulum	$2,800/sq meter	5-7%	Eco-tourism boom, new infrastructure
Puerto Vallarta	$250,000-450,000	5-6%	Stable market, established tourism

The national average rental yield sits at 5.7-6.1% gross, with Mexico City and Monterrey often exceeding this due to strong local rental demand from both tourists and long-term residents.

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 classic mistakes foreign buyers make in Mexico?

Learning from others' mistakes can save you thousands of dollars and potential legal headaches when buying property in Mexico.

The most costly error is skipping professional help - relying solely on the seller's notary without hiring your own qualified attorney leaves you vulnerable. Buying ejido land is another critical mistake, as this communal land cannot be legally owned by foreigners under any circumstances. Some buyers attempt using a Mexican friend's name through a "prestanombre" arrangement, which offers zero legal protection and risks losing your entire investment.

Ignoring the fideicomiso requirement by trying to bypass the trust in restricted zones will invalidate your purchase. Insufficient due diligence - not checking for liens, unpaid taxes, or construction permits - can lead to expensive surprises. Rural property buyers often overlook access rights, discovering too late they have no legal road access.

Not getting title insurance represents a small savings that could cost you everything if title issues arise later. These mistakes are entirely avoidable with proper guidance and patience.

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

Is life as an expat in Mexico actually good?

Life as an expat in Mexico offers an exceptional quality of life at a fraction of North American costs.

You'll spend 30-50% less than in the US or Canada, with a comfortable lifestyle costing $1,500-3,000 USD monthly including rent. Healthcare stands out as a major advantage - Mexico offers excellent private healthcare at a fraction of US costs. Public healthcare (IMSS) costs under $500 annually, while comprehensive private insurance runs $1,000-2,000 yearly.

Popular expat areas like San Miguel de Allende, Merida, and Puerto Vallarta maintain good safety records with crime rates often lower than major US cities. Thriving expat communities exist in all major destinations, offering social clubs, volunteer opportunities, and support networks that ease the transition. Major expat areas feature modern amenities including fiber internet, international airports, and improving transportation networks.

The combination of warm weather, rich culture, affordable living, and welcoming communities creates an enviable lifestyle for foreign residents.

What's the long-term outlook for Mexican real estate?

The Mexican property market shows strong fundamentals and positive growth drivers heading into the second half of 2025.

Major infrastructure projects like the Maya Train and new airports are improving accessibility to previously remote areas, opening new investment opportunities. The tourism industry has recovered beyond pre-2020 levels, with international arrivals setting new records. Remote work continues driving demand in colonial cities as digital nomads seek quality of life at reasonable costs.

Mexico's stable economic relationship with the US through the USMCA trade agreement provides long-term stability. The rising Mexican middle class creates increasing domestic demand, reducing dependence on foreign buyers. Property appreciation of 5-8% annually is expected through 2026, with rental demand strengthening in tourist destinations.

Mexico City and Guadalajara are experiencing urban growth spurts, while emerging markets like Tulum and Mazatlan show the highest growth potential for early investors.

What's the best type of property to buy in 2025?

The best property type depends on your goals - lifestyle, rental income, or capital appreciation.

For lifestyle buyers, colonial homes in San Miguel de Allende or Merida offer authentic Mexican living with modern amenities. Beachfront condos in Puerto Vallarta or Playa del Carmen provide resort-style living with ocean views. Modern apartments in Mexico City's Polanco or Condesa neighborhoods suit urban professionals seeking culture and convenience.

Rental income seekers should focus on vacation rentals in Cancun, Playa del Carmen, or Tulum where tourist demand remains strong year-round. Studios and one-bedrooms near beaches or tourist centers offer the best yields with easier management. Properties in developments with professional rental management programs simplify the investment process.

For capital appreciation, target properties in emerging areas with new infrastructure like Tulum and Mazatlan. Urban properties in growing Mexico City neighborhoods benefit from gentrification trends. Land in developing coastal areas offers high potential returns with proper due diligence.

The winning formula for 2025 combines established areas with proven rental demand, solid infrastructure, and track records of appreciation.

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 UK - Acquisition of Properties in Mexico
2. Riviera Maya Blue - Can Foreign Citizens Buy Property in Mexico
3. Global Property Guide - Mexico Buying Guide
4. Mexico Relocation Guide - Can Foreigners Own Property in Mexico
5. Properstar - Buying Property in Mexico Without Residency
6. International Living - Mexico Real Estate
7. Forbes - 3 Places to Buy Property in Mexico