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
US citizens can buy property in Mexico, but specific restrictions apply based on location and property type.
The Mexican constitution restricts foreign ownership in coastal areas within 50 kilometers and border areas within 100 kilometers, known as the "restricted zone." Outside these areas, Americans can own property directly with full title rights. Within restricted zones, foreigners must use a bank trust (fideicomiso) or Mexican corporation to legally purchase real estate.
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.
US citizens can own houses, condos, or land in Mexico but must use a bank trust for coastal/border zone purchases.
No residency is required, and many transaction steps can be handled remotely with proper legal representation.
| Property Location | Ownership Method | Key Requirements |
|---|---|---|
| Outside Restricted Zone | Direct Title (Escritura) | RFC tax ID, notario público |
| Coastal/Border Zone | Bank Trust (Fideicomiso) | SRE permit, annual trust fees |
| Commercial Investment | Mexican Corporation | Business registration, ongoing compliance |
| Ejido Land | Cannot Purchase | Legally prohibited for foreigners |
| All Locations | Legal Representation | Attorney and notario público required |
Can a US citizen buy property in Mexico, and what specific limits apply compared to Mexican citizens?
US citizens can buy property in Mexico, but face specific restrictions based on location that don't apply to Mexican citizens.
The Mexican constitution establishes "restricted zones" where foreigners cannot hold direct title. These zones include all land within 50 kilometers (31 miles) of any coastline and 100 kilometers (62 miles) from international borders. Popular coastal destinations like Puerto Vallarta, Playa del Carmen, and Los Cabos fall within these restricted zones.
Outside restricted zones, US citizens enjoy the same property ownership rights as Mexican citizens. You can buy houses, condos, or raw land with direct title ownership (Escritura) and full legal rights to use, modify, rent, or sell the property. Cities like Mexico City, Guadalajara, and San Miguel de Allende are outside restricted zones.
Mexican citizens can buy property anywhere in the country without restrictions. They also have access to ejido land (communal agricultural land), which is completely off-limits to foreigners under any circumstance.
As of September 2025, these constitutional restrictions remain firmly in place with no changes expected in the near future.
What types of property can foreigners buy, and when do you need a bank trust versus direct title?
Foreigners can buy houses, condos, and raw land in Mexico, but the ownership structure depends on location.
Direct Title Ownership (Escritura): Available for all property types outside restricted zones. You receive the same ownership rights as Mexican citizens, with your name directly on the deed.
Bank Trust (Fideicomiso): Required for all property types within restricted zones. A Mexican bank holds legal title while you become the beneficiary with full beneficial rights. Each trust can hold up to 2,000 square meters of land. Multiple properties require separate trusts.
Mexican Corporation: An alternative for commercial or investment properties in restricted zones. The corporation owns the property, and you own shares in the corporation. This option works best for rental properties or business ventures, not primary residences.
You cannot legally purchase ejido land (communal agricultural land) under any ownership structure. Avoid any offers on ejido properties, as these transactions are illegal and unenforceable for foreigners.
Do you need Mexican residency or a specific visa to buy property?
You do not need Mexican residency or any specific visa to buy, own, rent out, or sell property in Mexico.
Property ownership is available to US citizens regardless of immigration status - whether you're a tourist, temporary resident, or permanent resident. You can complete purchases and hold property as a non-resident while living in the United States.
However, you will need to obtain a Mexican tax ID number (RFC) to register the property and fulfill tax obligations. The RFC application process can be completed at Mexican consulates in the US or in Mexico.
Having a Mexican bank account makes payments and utility setup easier but isn't strictly required. Some developers and sellers accept international wire transfers or US bank financing for purchases.
Your residency status affects practical considerations like banking relationships, internet setup, and utility connections, but doesn't impact your legal right to own property.
Can you handle the buying process remotely or do you need to be present in Mexico?
You can handle most of the buying process remotely, but at least one in-person visit is typically required for final document signing.
| Transaction Step | Remote Possible? | Requirements |
|---|---|---|
| Property Search | Yes | Online listings, virtual tours, video calls |
| Initial Offers | Yes | Digital communication with agents |
| Due Diligence | Yes | Attorney can verify documents remotely |
| Contract Negotiation | Yes | Email and digital communication |
| Escrow Setup | Yes | International wire transfers |
| Final Signing | Usually No | Notario público requires presence |
| Power of Attorney Option | Yes | Must be established before closing |
Setting up a power of attorney before starting the process allows your Mexican attorney to sign documents on your behalf. This power of attorney must be properly notarized and apostilled in the US, then registered in Mexico.
Many US buyers make one trip to Mexico to view properties and establish legal representation, then complete the purchase remotely with their attorney handling the closing.
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What's the step-by-step buying process and which documents should you verify?
The Mexican property buying process involves seven key steps with specific document verification at each stage.
Step 1: Offer Acceptance - Negotiate price and terms with your agent and attorney reviewing all agreements.
Step 2: Due Diligence - Your attorney verifies the title deed (Escritura), confirms the property isn't ejido land, reviews property tax receipts, conducts lien searches, and obtains an encumbrance certificate. Verify the seller's legal ownership and government-issued ID.
Step 3: Permit Applications - For restricted zone purchases, apply for Foreign Ministry permit (SRE). This process typically takes 2-4 weeks.
Step 4: Trust or Corporation Setup - Draft fideicomiso agreements with the bank or establish Mexican corporation paperwork if applicable.
Step 5: Escrow and Deposit - Place funds in escrow account until legal transfer is complete. Verify escrow provider credentials and terms.
Step 6: Notario Review and Closing - All parties sign before the notario público, who files the transfer, pays transfer taxes, and verifies all documentation.
Step 7: Registration - The new deed or trust gets registered with the public property registry, and you receive your title documents.
It's something we develop in our Mexico property pack.
Do you need both a private attorney and notario público, and what do they each do?
You need both a private attorney and a notario público for different but essential roles in Mexican property transactions.
Private Attorney Role: Represents your interests exclusively, conducts due diligence, reviews contracts, negotiates terms, verifies property title, and protects you from legal risks. Choose an attorney with cross-border real estate experience and strong references from other US buyers.
Notario Público Role: Government-appointed official who validates contracts, oversees property transfers, calculates and pays transfer taxes, and registers the new ownership with public records. The notario is legally required and acts as a neutral party.
Vetting Your Attorney: Check credentials with the local bar association, request references from recent US clients, verify their real estate transaction volume, and ensure they speak fluent English. Meet them in person or via video call before hiring.
Budget Considerations: Notario fees typically range from 1-2% of property value. Private attorneys charge $1,000-$5,000 USD for most residential transactions, depending on complexity and location.
Never skip hiring your own attorney to save money. The notario protects the transaction's legality but doesn't represent your specific interests as a foreign buyer.
How do taxes work for US buyers and owners in Mexico?
Mexican property taxes for US citizens include acquisition taxes, annual property taxes, rental income taxes, and capital gains taxes.
Acquisition Tax (ISAI): Paid at purchase, typically 2-4.5% of property value depending on the state. This is separate from notario fees and closing costs.
Annual Property Tax (Predial): Varies by municipality, typically $100-$300 USD per year for most residential properties. Coastal resort areas tend to have higher rates.
Rental Income Tax: Mexican rental income is taxed at 15-35% depending on deductions and your residency status. Non-residents face higher rates but can often deduct property management, maintenance, and depreciation.
Capital Gains Tax: 25% of gains for non-residents, though deductions for improvements and holding period can reduce this significantly. Properties held over two years qualify for additional deductions.
US-Mexico Tax Treaty: Prevents double taxation and allows you to claim foreign tax credits on your US returns for Mexican taxes paid. This significantly reduces your overall tax burden.
Consult both Mexican and US tax professionals to optimize your tax strategy and ensure compliance in both countries.
What are the total costs to buy and hold property in Mexico?
Total costs to buy and hold property in Mexico include upfront closing fees and ongoing annual expenses that vary significantly by location.
| Cost Category | Amount Range | Notes |
|---|---|---|
| Closing Fees (Total) | 4-9% of purchase price | Includes taxes, notario, attorney, registration |
| Fideicomiso Setup | $700-$2,500 USD | One-time fee for restricted zone purchases |
| Annual Trust Fee | $400-$750 USD | Ongoing cost for fideicomiso properties |
| HOA Dues | $50-$500 USD/month | Varies by development and amenities |
| Property Insurance | $250-$1,000 USD/year | Depends on location and coverage |
| Utilities (Average) | $80-$200 USD/month | Electricity, water, internet, cable |
High-demand coastal and resort areas like Playa del Carmen and Los Cabos have the highest costs across all categories. Secondary cities like Mérida and San Miguel de Allende offer significantly lower holding costs.
Electricity costs spike during summer months due to air conditioning usage. Many developments include water and security in HOA fees, reducing individual utility costs.
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 foreigners get mortgages in Mexico, and what are the current terms?
Foreigners can obtain mortgages in Mexico from select lenders, though terms are less favorable than US mortgages.
Available Lenders: Mexican banks like BBVA and Santander offer foreigner mortgages, along with specialized lenders like MoXi and Global Mortgage. Most focus on resort and expat-heavy areas.
Current Terms (as of September 2025): Down payments typically range from 30-50% of purchase price. Interest rates run 7-12% annually, significantly higher than US rates. Loan terms extend up to 20 years for most programs.
Approval Requirements: Solid credit history in the US, full income documentation, debt-to-income ratios under 40%, and sometimes life insurance requirements. Many lenders require a larger deposit or Mexican bank account.
Practical Tips for Approval: Establish banking relationships in Mexico before applying, provide translated and apostilled financial documents, consider larger down payments to improve terms, and work with mortgage brokers experienced in foreigner financing.
Cash purchases remain more common among US buyers due to simpler transaction processes and better negotiating power with sellers.
Where do Americans actually settle in large numbers and why?
Americans concentrate in specific Mexican cities that offer established expat communities, infrastructure, and lifestyle benefits.
- Puerto Vallarta: Over 40,000 US expats. Beach lifestyle, international airport, established healthcare, and strong rental market.
- Lake Chapala/Ajijic: Largest US retirement community in Mexico. Year-round spring climate, lower cost of living, extensive expat services.
- San Miguel de Allende: UNESCO World Heritage site. Arts community, cultural events, excellent restaurants, and historic charm.
- Riviera Maya (Playa del Carmen/Tulum): Beach lifestyle, strong rental income potential, international connectivity, and resort amenities.
- Mérida: Growing expat population. Safety, colonial architecture, proximity to beaches, and affordable cost of living.
- Los Cabos: Luxury resort destination. High-end amenities, golf courses, sport fishing, and strong property appreciation.
- Mexico City: International business hub. Cultural attractions, dining scene, and excellent connectivity.
Americans choose these locations for safety ratings above national averages, English-speaking business services, established expat social networks, quality healthcare facilities, and reliable internet connectivity for remote work.
Which cities and neighborhoods offer the best opportunities right now?
The best Mexican cities for US property buyers in September 2025 vary by investment goals and lifestyle preferences.
For Living (Lifestyle Focus): Mérida leads livability rankings with excellent safety, healthcare, and cultural amenities. San Miguel de Allende offers historic charm and arts community. Puerto Vallarta provides beach lifestyle with established infrastructure.
For Rental Income: Playa del Carmen and Tulum generate the highest Airbnb yields at 8-12% annually due to tourism demand. Puerto Vallarta offers steady 6-8% yields with more stable long-term rental markets.
For Capital Appreciation: Mérida property values increased 15% in 2024, driven by infrastructure investment and US buyer demand. Tulum continues strong growth despite some market cooling from peak pandemic levels.
Emerging Opportunities: Mazatlán and Cozumel are attracting more US buyers with lower entry costs and growing tourism infrastructure. These markets offer better value compared to established destinations.
Neighborhood Specifics: In Puerto Vallarta, focus on Zona Romántica and Marina districts. In Playa del Carmen, prioritize areas near Fifth Avenue. In Mérida, historic center and northern suburbs show strongest appreciation.
It's something we develop in our Mexico property pack.
What common mistakes and red flags should you avoid?
US buyers face several critical pitfalls that can result in financial loss or legal complications in Mexico.
Ejido Land Purchases: Never buy communal agricultural land (ejido), which cannot legally be sold to foreigners. Verify the property title specifically shows "propiedad privada" (private property), not ejido status.
Skipping Legal Representation: Always hire your own Mexican attorney. Don't rely solely on the seller's or developer's legal team to protect your interests.
Weak Escrow Practices: Use established escrow companies with proper bonding and insurance. Avoid direct payments to sellers without escrow protection.
Pre-Construction Risks: Verify developer permits, construction financing, and completion guarantees. Many pre-construction projects face significant delays or cancellations.
Overly Optimistic Rental Projections: Research actual rental rates and occupancy levels independently. Developer projections often exceed realistic returns by 30-50%.
HOA and Municipal Restrictions: Verify short-term rental permissions before purchase. Many developments and municipalities have banned Airbnb and similar platforms.
Incomplete Permits: Ensure all construction permits, utility connections, and municipal approvals are complete before closing. Incomplete permits can prevent resale or rental activities.
It's something we develop in our Mexico property pack.
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.
US citizens can successfully own property in Mexico by understanding the legal requirements and following proper procedures.
Success requires working with qualified professionals, avoiding common pitfalls, and choosing locations that match your investment goals and lifestyle preferences.
Sources
- Riviera Maya Cozy - US Citizen Buy House Mexico
- Mexico Relocation Guide - Foreigner Property Ownership
- Nu Home Mexico - Buying Property Coastal Areas
- Riviera Maya Cozy - Restricted Zone Mexico
- The LatinVestor - Mexico US Citizen Property Ownership
- MyCasa - How Americans Can Buy Land Mexico
- Maya Ocean - Bank Trust Mexico Property
- Global Mortgage - Americans Buy Property Mexico
- Dreams Property - Bank Trust Foreigners Mexico
- Taxes for Expats - Buying Property Mexico American