What They Don’t Tell you About Owning Property in Mexico

posted in: Real Estate, Tips | 0

If you are looking for the best properties to own where affordability meets luxury standard of facilities and services, then the real estate available in Mexico is waiting for you. Besides sunny weather, awesome food, and enjoyable lifestyle, the lower costs of owning property in Mexico is attractive when compared to those found in the USA, Europe or Canada. Amenities such as pools and other luxuries require cheaper maintenance fees, taxes, and other housekeeping dues.

Nevertheless, there are some things that you should know about owning property in Mexico, which we have compiled below.

Cost of Owning Property in Mexico

The actual cost of purchasing your property in Mexico is where the majority of your budget will fall. Depending on its location, size, and amenities, the cost of real estate in Mexico will vary. You might be surprised the difference in prices, so be sure to spend some time researching locations.

Predial – Land Taxes

Owning property in Mexico is not free of its taxes. Each local mayor’s office requires property owners to pay an annual fee called “predial”. The value of this property tax depends on the state where you are at, size, and location of the house. The amount is usually a few hundred dollars although you might want to always check on the mayor’s office for more details since there are some states which do not provide bills for this.

Closing Fees

The payments for lawyers which may fall under fees such as sales taxes, notary fees, or agency fees is another thing to consider when estimating your total investment when looking to own property in Mexico.

Land Trust – Fideicomiso

When your property in Mexico is located within 50 km (30 miles) from Mexican coastlines or 100 km (60 miles) from any border and you are a foreign resident or investor, Mexican banks would require you to have land trust, or Fideicomiso. The usual amount which is US$500 involves an upfront fee and then a yearly payment for succeeding terms of your ownership.

Homeowners Association Fees

It is also wise to include in your yearly allotments for your new home the payments for maintenance and HOA dues. This is usual for gated communities similar to those required in condominiums, country or golf club residents, or apartments. HOA fees actually make owning property in Mexico easier.

Electrical Usage

A hidden cost for owning property in Mexico is the cost of electricity. In Mexico, the government provides a subsidy for each household but this aid is available only for those who do not go beyond the “allowed energy unit,” which is a very low amount that favors the poorest households. Use electricity wisely so that you don’t have shock when your bill comes in. While costs are comparable to electricity costs in the USA and Canada, when compared to local wages it is high.

Insurance Plans

It is wise then to have your home and its contents covered by a secure insurance policy, especially when your house is within coastal areas, flooding, storms, and other potential dangers that might take affect your property.

Please add in the comments section below any costs related to owning property in Mexico which you think should be included in this list.

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