PEACE OF MIND.
If you have the vision, we can get you there.
Grupo Amerimex is a full-service real estate company with the power and experience to patiently manifest your vision. Our English speaking staff is well acquainted with the legal, accounting and immigration laws governing the purchase of property by foreigners.
We are able to provide comprehensive title reports and U.S. title insurance to guarantee the safety of your purchase and to protect your investment. We can help the foreign investor establish a Mexican corporation and offer step by step assistance in setting up your business in Mexico. Occasionally we are called upon for solving legal difficulties face-to-face with our many trusted associations within the Mexican government. We have an English speaking attorney in our office to assist us at all times.
In addition, we have long-standing relationships with Mexican & American architects, builders, civil engineers, structural engineers, geologists, water specialists, land planners, contractors and accountants; who work with our office and are available to serve our clients.
The following information is printable for your convenience.
Escrow services - Very few buyers elect to do their own closing because of language barriers, the many trips to the city of La Paz and the often confusing legalities and red tape associated with filing for a fideicomiso bank trust. Most use the services of a real estate escrow specialist or attorney. Our closing fees average $1000 and go up depending on the value of the transaction, and associated services such as subdivisions, surveys or water contracts.
Great care must be taken when titling or the buyer and seller may incur unnecessary tax obligations, this is especially true with the fluctuating value of the peso. In a recent case, a seller who insisted on handling his own closing, failed to properly file supporting tax documents that would have exempted him from paying significant capital gains taxes.
Fideicomiso bank trust - Foreigners most often purchase residential property through a 50 year fideicomiso bank trust. A fideicomiso trust is not a lease and never reverts to the original owner. Under the fideicomiso trust structure, a foreigner may sell the property, rent it and leave it to their heirs. The trust can be renewed at the end of fifty years. What happens after the second fifty-year trust expires? Assuming you have not sold the property by then, you or your heirs would have the opportunity to renew it for another fifty years.
When purchasing property with a fideicdomiso trust, you will incur trust charges, which include a permit from the secretary of foreign affairs, recording fees with the National Registry in Mexico City, the first year annual administration fee, the bank acceptance fee and 16% IVA tax. Annual trust fees vary from bank to bank so you or your representative should shop the market.
Apart from the fideicomiso trust expenses the buyer will also pay the usual closing costs associated with a property purchase, which normally include the title search, appraisal fees, tax certificate, notary fees for the deed, filing fees, transfer taxes (2% of the purchase price) and recording fees.
In general, fideicomiso and closing costs for a moderately priced property should run about $4,500 USD not including the 2% transfer tax and expenses such as engineering reports, title insurance, subdivision and survey. It is possible to place more then one lot in a single fideicomiso, however, each lot must have its own fideicomiso permit and will incur individual closing costs and transfer taxes. Even so you may save as much as 15% to 20% of the cost of two separate fideicomisos.
Keep in mind that the more valuable the property the greater the transfer taxes, notary charges and appraisal fees. Closing costs and escrow fees are usually higher in Los Cabos than in Todos Santos or La Paz.
Investment clause - All fideicomiso trusts on properties larger than a half acre (2000 m2), are subject to an investment clause requiring that the purchaser invest a designated amount within twenty-four months. Properties smaller than half an acre are not subject to the investment clause. Presently the investment requirement begins at $250,000 USD and increases depending on the size and location of the property. When calculating the value of your investment all costs are included; land, construction, gardens, water systems, utilities and furnishings. You are not asked to produce records of expenditures and usually the overall property value estimate is based on the current commercial value.
Purchasing property as a Mexican corporation - When purchasing commercial properties or large tracts of land, foreigners can form a Mexican corporation to make the purchase. The law allows foreign owned Mexican corporations to purchase commercial properties through a fee simple deed as long as the property will not be used as a personal residence. The cost for our office to form the corporation including the corporate charter, all fees associated with regular federal, state, local permits and licenses should not exceed $2,500 USD assuming that we do not have to do special work to establish the corporation. In addition to the cost of setting up your Mexican corporation, your purchase will incur standard closing costs and transfer taxes. Keep in mind that if you are the corporate administrator, you will have to obtain appropriate immigration and tax I.D. documents. Plan on being in Mexico for at least 2-3 weeks while you do these filings.
Title insurance - Fidelity Title Insurance and Stewart Title both offer full-coverage for properties in southern Baja. Both companies require a full title report from an authorized title company in Mexico. These reports usually cost $900+/-. If the report is positive, the title company will issue a commitment letter and grant title insurance once the property has been transferred to the new owner. Insurance costs: $7 to $8 per $1000 USD value. Example: a $100,000 property = $700 to $800 for title insurance.
Utilities & communication services – Many areas in Todos Santos have easy access to power, water, phone and internet and will soon have access to cable television.
- If you purchase a house in a residential area where these services are possible, you will simply need to file for contracts in your name once the deed or fideicomiso trust has been issued for your property.
- If you purchase a vacant lot in an established area with services on your block, you will need to file for new utility contracts when you initiate construction. You will be required to pay installation costs, which include the cost of a water meter and hookup to your property.
- Electric installations vary depending on how far your lot is from the nearest pole. If you are too far from an existing pole you will have the expense of bringing power poles to your property.
- If there are no utilities near your lot, you will have to pay the cost of bringing services to your area. Often neighbors will join together to share the expense of new installations.
- Rural properties rarely have public utilities and require that the property owner provide his own systems.
- Options for water service may include a well, cisterns filled from water trucks or irrigation canals.
- Solar power systems are widely available and successfully used through out the Baja peninsula.
- Fiber optic digital phone service and high speed DSL internet service are available in many parts of Todos Santos. Cell phone service can be contracted to service properties beyond the communication grid.
- Many rural property owners have direct satellite systems that provide high-speed internet access.
- Dish and Sky satellite television services are offered through local companies. Recently Mega Cable began installing cable television.
Immigration and real estate - Regardless of whether you title through a fideicomiso or a corporation, you will need to change your immigration status from the basic tourist visa to a residential or work visa. You should contact the closest office of immigration in your country for more information. Or you can contract a local immigration specialist to help facilitate the process. We are happy to make recommendations. It will take two to three weeks to file for an residential visa and you must be here during the filing process.
A word to the wise - Problems come about when foreigners try to avoid the expense of establishing a fideicomiso trust or a corporation by looking for other options such a power of attorney or placing title in the name of a Mexican friend. Neither of these options are safe alternatives to taking legal title through a fideicomiso bank trust, or foreign owned corporation.
Buying and selling property in Mexico is easy, and can be successful if you remember to seek trained help and get all the facts from a reliable professional, not the cocktail circuit or someone you meet on the street. Be as formal and thorough in your Mexico business dealings as you would be at home.