Can a US citizen own property in Mexico? (full guide)

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 thousands of American buyers seeking vacation homes, retirement properties, and investment opportunities.

As we reach mid-2025, the Mexican real estate market remains strong, with popular expat destinations seeing steady price growth and robust rental demand. This guide answers the 12 most critical questions US citizens have about buying property south of the border.

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 APAC countries (Japan, Thailand, Indonesia, Australia, 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 Thailand. 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 Thai 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 Bangkok, Chiang Mai, and Phuket. 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 property in Mexico, and what restrictions apply to locations and property types?

Yes, US citizens can absolutely own property in Mexico.

The Mexican Constitution allows foreigners to purchase real estate throughout the country, but with specific rules for properties within the "restricted zone" - areas within 50 kilometers (31 miles) of any coastline or 100 kilometers (62 miles) of international borders.

In the restricted zone, Americans must purchase through a bank trust called a fideicomiso. The Mexican bank holds the title as trustee, but you maintain all ownership rights - you can sell, rent, renovate, or pass the property to heirs. The trust lasts 50 years and is renewable indefinitely.

Outside the restricted zone, Americans can own property directly in their name, just like Mexican citizens. Agricultural, livestock, or forestry land requires special permits, while ejido (communal) land cannot be owned by foreigners - this is a major trap to avoid.

Residential and commercial properties have no special restrictions, making them the most straightforward options for American buyers.

Do Americans need residency to buy property, and does ownership help with immigration?

No residency visa is required to purchase property in Mexico.

You can buy on a tourist visa, which Americans receive automatically for 180 days upon entry. This makes Mexico one of the most accessible countries for foreign property investment.

However, property ownership can significantly help your residency application. Property valued at $220,000 USD or more can qualify you for temporary residency, while property valued at $440,000 USD or more meets the financial requirement for permanent residency. It's something we develop in our Mexico property pack.

Residency allows you to spend unlimited time in Mexico, open bank accounts easily, and potentially access Mexican healthcare. As of June 2025, Mexico's residency-by-investment program remains one of the most accessible in Latin America.

Many Americans use property purchase as a stepping stone to residency, especially retirees looking to establish permanent ties to Mexico.

What's the exact process for Americans to buy Mexican property, and which documents are needed?

The Mexican property purchase process typically takes 30-60 days from offer to closing.

First, you'll find a property and make an offer through a licensed real estate agent, signing a promissory agreement. Next comes the purchase contract (contrato de compraventa) which must be in Spanish, requiring a 5-10% deposit into escrow. During the due diligence phase, you'll conduct title searches, verify no liens exist, and confirm all taxes and utilities are current.

Document	Purpose
Valid passport	Primary identification
Tourist visa/immigration form	Proof of legal entry
RFC (Mexican tax ID)	Required for property ownership
Proof of address	Utility bill from home country
Bank statements	If financing needed
Marriage certificate	If buying as couple

For coastal or border properties, you'll need to set up a fideicomiso through a Mexican bank, which requires a permit from the Ministry of Foreign Affairs. The closing happens at a notary public office where you'll sign the deed (escritura) and pay remaining balances.

The notary then registers the deed at the Public Registry, completing the official transfer of ownership.

Is hiring a lawyer or notary mandatory, and what exactly do they do?

A notary (Notario Público) is mandatory for all Mexican real estate transactions.

Mexican notaries are government-appointed legal professionals with far more authority than US notaries. They verify the property title is clean, calculate and collect all taxes, prepare and certify the deed, register the sale with the government, and act as a neutral party for both buyer and seller. Their fees typically run 1-2% of the purchase price.

While a real estate lawyer isn't legally required, it's highly recommended for American buyers. Your lawyer represents your interests exclusively, reviews all contracts before signing, conducts deeper due diligence, identifies potential legal issues, and helps avoid common pitfalls that can cost foreigners dearly.

Legal fees typically range from $2,000-5,000 USD, a small price for protecting what's likely a six-figure investment. Buying without your own lawyer is like going to court without representation - technically possible but extremely risky.

The notary works for the transaction itself, not for you specifically, which is why having your own legal representation is crucial.

Can Americans complete the purchase remotely or must they travel to Mexico?

The Mexican property purchase process offers significant flexibility for remote buyers.

You can handle property searches, virtual tours, initial offers, negotiations, contract reviews, wire transfers, and due diligence coordination entirely remotely. Modern technology and professional services make it possible to complete much of the process from the United States.

However, certain aspects typically require physical presence: the final closing at the notary office, opening a Mexican bank account for the trust, and property inspections (though these can be delegated). If you cannot travel to Mexico, you can grant power of attorney to a Mexican lawyer or trusted representative to sign on your behalf.

This power of attorney document must be drafted by a Mexican lawyer and either signed at a Mexican consulate in the US or signed before a US notary and apostilled, then translated to Spanish by a certified translator. It's something we develop in our Mexico property pack.

Most Americans visit Mexico at least once during the process, combining property viewing with the closing appointment to ensure everything meets their expectations.

What are all the costs of buying and owning property in Mexico?

Total closing costs typically run 5-8% of the purchase price.

One-time purchase costs include acquisition tax (2-4% of sale price), notary fees (1-2%), legal fees ($2,000-5,000), trust setup for coastal properties ($500-1,500), appraisal ($300-500), and optional but recommended title insurance (0.5-1%). These costs are significantly lower than in many US markets.

Annual Cost Type	Amount
Property tax (predial)	$100-500 USD
Trust maintenance (coastal)	$400-700 USD
HOA fees (if applicable)	$50-500/month
Utilities	$100-300/month
Property management	20-30% of rental income

Annual ownership costs are remarkably low, with property taxes often under $500 per year. When selling, expect to pay capital gains tax (25% of gross sale or 35% of net profit for non-residents), real estate commission (5-6%), and notary/closing costs (1-2%).

The low ongoing costs make Mexico particularly attractive for retirees and investors seeking affordable second homes.

Can Americans get mortgages in Mexico - what are the requirements and rates?

Yes, mortgages are available but with significant limitations compared to US financing.

Mexican bank mortgages require 30-50% down payments with interest rates of 9-12% as of June 2025, typically for 10-20 year terms in Mexican pesos. Requirements include a Mexican bank account and preferably residency status.

Cross-border lenders offer better terms for Americans: 20-30% down payments, 7-9% interest rates, terms up to 30 years, and USD-denominated loans. They require a US credit score of 680+ and documented proof of income. Best practices for approval include getting pre-approved before shopping, having 6 months reserves after down payment, maintaining a debt-to-income ratio under 43%, and documenting all income sources.

Seller financing is also common in Mexico and can offer more flexible terms. About 65% of American buyers pay cash due to mortgage complexities, so if you need financing, budget an extra 2-3 months for loan processing.

The mortgage landscape is improving as more cross-border lenders enter the market to serve American buyers.

What do properties cost in Mexico's most popular American expat areas?

Property prices vary significantly across Mexico's most popular expat destinations.

In Puerto Vallarta, ocean-view condos range from $200,000-500,000, downtown condos from $150,000-350,000, single-family homes from $500,000-1.5M, and luxury beachfront properties start at $1M. Lake Chapala, home to the largest US expat community, offers more affordable options with condos from $90,000-250,000 and houses in Ajijic from $200,000-400,000.

Playa del Carmen features beach-area condos at $180,000-400,000 and downtown units at $130,000-250,000. Merida provides excellent value with restored colonials at $200,000-500,000 and modern condos at $150,000-300,000. Tulum, the trendiest destination, commands premium prices with eco-chic condos at $200,000-400,000 and beachfront properties starting at $800,000.

These prices represent significant value compared to similar properties in comparable US destinations. The variety ensures options for every budget, from affordable retirement homes to luxury investment properties.

Market conditions in 2025 show steady appreciation with good inventory in most areas.

Where do Americans buy most in Mexico and what makes these areas attractive?

The top five destinations each offer unique advantages for American buyers.

Lake Chapala Region attracts retirees with its perfect year-round spring weather, established infrastructure for English speakers, and cost of living 50-70% less than the US. With over 15,000 US citizens, it's the largest American expat community in Mexico. Puerto Vallarta perfectly blends Mexican culture with modern amenities, offering direct flights from 20+ US cities, strong year-round rental markets, and ranking as one of Mexico's safest tourist cities.

The Riviera Maya (Playa del Carmen, Tulum, Cancun) boasts Caribbean beaches, the fastest appreciating real estate market, 20 million annual visitors, and new infrastructure like the Mayan Train. Merida, the safest city in Mexico, offers colonial architecture, the best price-to-quality ratio, and is emerging as a tech hub. Los Cabos caters to luxury buyers with world-class golf and fishing, just a 2-hour flight from California.

Each area has developed robust services for American buyers, including English-speaking professionals, familiar banking services, and established expat communities. It's something we develop in our Mexico property pack.

The diversity of options ensures every buyer can find their ideal Mexican destination.

What rental income and appreciation can Americans expect in 2025 and beyond?

Short-term rentals in Mexico's tourist destinations offer impressive returns.

Puerto Vallarta generates $2,000-4,000/month at 60-70% occupancy, Playa del Carmen $1,800-3,500/month at 65-75% occupancy, and Tulum leads with $2,500-5,000/month at 70-80% occupancy. Lake Chapala and Merida offer lower but stable returns at $1,200-2,000 and $1,000-2,500 monthly respectively.

Location	Expected Annual Appreciation	Key Drivers
Tulum	6-10%	Infrastructure, tourism growth
Playa del Carmen	5-8%	Established market, steady demand
Puerto Vallarta	4-7%	Limited inventory, US buyer demand
Merida	5-8%	Emerging market, safety reputation
Lake Chapala	3-5%	Stable retiree market
Los Cabos	3-6%	Luxury market, economic resilience

Long-term rentals typically yield 40-60% of short-term rates but offer more stable income with less management intensity. The growing digital nomad population is creating new rental opportunities in traditional non-tourist areas.

A typical investment example: a $250,000 Playa del Carmen condo generating $25,000 annual rental income (10% gross), with $8,000 in expenses, yields $17,000 net (6.8% net yield). With 6% annual appreciation, the property value reaches $334,885 after 5 years, providing a total return of $219,885 (88% ROI).

What mistakes do Americans commonly make when buying Mexican property?

The most critical mistake is buying ejido land, which cannot be legally owned by foreigners.

No matter what anyone says, you cannot get clear title to communal ejido land. This extremely common scam targets Americans, and the only protection is verifying land status at the Public Registry. Always insist on this verification before proceeding with any purchase.

Skipping independent legal representation ranks as the second major error. Using only the notary without your own counsel, having the seller's lawyer handle everything, or not having contracts reviewed before signing can cost you hundreds of thousands of dollars. The savings of $3,000 on legal fees isn't worth risking a $300,000 investment.

Inadequate due diligence creates ongoing problems: not checking for liens and debts, skipping title insurance, ignoring boundary disputes, or not investigating HOA financials. Cash handling errors like paying deposits directly to sellers or bringing large amounts of cash to Mexico violate both safety and legal protocols.

Cultural misunderstandings also cause issues - expecting US-style customer service, rushing the traditionally slower Mexican process, or assuming verbal agreements are binding will lead to frustration and potentially costly mistakes.

What are the tax implications for Americans owning Mexican property?

Americans face tax obligations in both Mexico and the United States.

Mexican property tax (predial) is incredibly low at $100-500 USD annually, based on cadastral value rather than market value. Early payment often earns 10-15% discounts. Rental income faces either a 25% flat rate for non-residents or 35% on net income after deductions, with monthly filing required. Capital gains tax is either 25% of gross sale price or 35% of net gain, though residents can access exemptions.

In the US, all Mexican rental income must be reported on Schedule E, with capital gains on Schedule D. The Foreign Bank Account Report (FBAR) requires reporting Mexican bank accounts over $10,000, including fideicomiso accounts, with severe penalties for non-compliance ($12,500+).

The US-Mexico tax treaty prevents double taxation, allowing Mexican taxes paid to reduce US tax liability through foreign tax credits. Smart strategies include keeping all receipts for renovation costs, considering Mexican residency for tax advantages, using property managers whose fees are deductible, and potentially forming an LLC or Mexican corporation for tax efficiency.

Many Americans actually save money overall due to Mexico's lower tax rates and the foreign tax credit system.

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.

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.

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