Buying Property in Mexico as a Foreigner

A Practical Guide for International Buyers

Mexico has welcomed international property buyers for decades, from those seeking a second home or retirement residence to buyers exploring long-term investment opportunities along the country's coastlines.

Foreigners can legally acquire real estate in Mexico, but the ownership structure and purchasing process differ depending on the property's location, intended use, and circumstances of the transaction.

For coastal destinations such as Zihuatanejo, understanding concepts such as the restricted zone, the fideicomiso, the role of the Mexican Notario Público, due diligence, closing costs, and ongoing ownership responsibilities can make the process considerably easier to navigate.

This guide provides international buyers with a practical overview of how property ownership works in Mexico, what to expect during a transaction, and which questions to consider before purchasing.

For buyers specifically exploring Mexico's Pacific coast, our Zihuatanejo Real Estate guide provides an overview of the local market, residential areas, and available opportunities.

Can Foreigners Buy Property in Mexico?

Yes. But the Ownership Structure Depends on Location.

Foreigners can acquire real estate interests in Mexico. However, the legal mechanism used depends in part on where the property is located.

Mexico distinguishes between properties located outside the restricted zone and properties located within the restricted zone established under Article 27 of the Mexican Constitution.

For international buyers considering coastal real estate, understanding this distinction is one of the most important starting points.

WHAT IS MEXICO'S RESTRICTED ZONE?

The restricted zone extends:

50 kilometers (approximately 31 miles) from Mexico's coastline

and

100 kilometers (approximately 62 miles) from Mexico's international borders.

Foreigners are restricted from acquiring direct ownership of land within this zone in the same manner as Mexican nationals. Mexican law, however, provides an established fideicomiso structure through which foreign beneficiaries may use and enjoy qualifying property within the restricted zone.

Because Zihuatanejo is located on Mexico's Pacific coast, property purchases by foreign buyers in the area generally require consideration of these restricted-zone rules.

WHAT IS A FIDEICOMISO?

Understanding the Mexican Bank Trust

For many foreign buyers purchasing residential property within Mexico's restricted zone, the ownership structure used is a fideicomiso, commonly referred to in English as a Mexican bank trust.

Under this structure, an authorized Mexican financial institution acts as trustee, while the foreign buyer is designated as beneficiary of the trust.

The fideicomiso allows the foreign beneficiary to use and enjoy the property within the framework established by Mexican law and the trust agreement.

Mexico's Secretaría de Relaciones Exteriores authorizes restricted-zone fideicomisos for periods of up to 50 years, and the fideicomiso contract must be formalized in a public deed.

A fideicomiso should not be confused with renting the property from the bank. The bank acts as trustee within the legal structure; the foreign buyer holds the beneficiary rights established by the trust.

WHAT RIGHTS DOES A FIDEICOMISO PROVIDE?

The fideicomiso is designed to provide the foreign beneficiary with rights over the property subject to the trust agreement and applicable Mexican law.

Depending on the structure and terms of the fideicomiso, these may include the ability to:

• Use and enjoy the property

• Make permitted improvements

• Lease the property, subject to applicable regulations and tax obligations

• Transfer or sell beneficiary rights

• Designate substitute or successor beneficiaries

• Receive proceeds from an eventual disposition

The precise rights, obligations, succession provisions, and transfer procedures should always be reviewed within the actual trust documentation by appropriately qualified Mexican professionals.

DOES THE BANK OWN MY PROPERTY?

This is one of the most common points of confusion for international buyers.

The bank acts as the trustee within the fideicomiso structure. The foreign buyer is the beneficiary.

The trustee's involvement exists because of the legal framework governing foreign interests in property within Mexico's restricted zone. It does not mean that the buyer is simply leasing a home from the bank.

The buyer's rights and the trustee's obligations are established through the fideicomiso agreement and applicable Mexican law.

HOW LONG DOES A FIDEICOMISO LAST?

The Secretaría de Relaciones Exteriores may authorize a fideicomiso in the restricted zone for a maximum period of 50 years. Mexican regulations also provide procedures for extending the duration of existing fideicomisos.

Because individual circumstances and regulations can change over time, buyers should confirm the remaining term and applicable extension requirements as part of their legal review.

FIDEICOMISO OR MEXICAN CORPORATION?

The Right Structure Depends on the Property and Its Intended Use

International buyers sometimes hear that creating a Mexican corporation is an alternative to a fideicomiso.

The distinction is more nuanced.

Mexican companies with foreign participation can be subject to a different framework when acquiring restricted-zone property intended for non-residential purposes. Mexico's Foreign Investment Law requires specific notices in these circumstances.

For that reason, choosing between an individual ownership structure, fideicomiso, Mexican entity, or another arrangement should not be treated simply as a matter of convenience.

The appropriate structure depends on factors including:

• Intended use of the property

• Residential or commercial purpose

• Tax considerations

• Investment structure

• Estate planning considerations

• Individual or corporate ownership objectives

Buyers should obtain qualified Mexican legal and tax advice before determining which ownership structure is appropriate for their circumstances.

HOW TO BUY PROPERTY IN MEXICO

A Step-by-Step Overview

While every transaction is different, an international purchase commonly involves the following stages.

1. Define Your Objectives and Budget

Begin with the reason for purchasing.

Are you seeking a second home, permanent residence, vacation property, rental investment, development opportunity, or long-term asset?

Your intended use can influence the type of property, location, ownership structure, and professional advice you require.

2. Identify the Right Property

Explore properties based on location, lifestyle, budget, intended use, condition, ownership structure, and long-term objectives.

Buyers exploring Zihuatanejo can begin with our Exclusive Properties, Represented Properties, and Private Collection.

If the right property is not within our existing portfolio, our Independent Property Search can expand the search across the broader local market.

3. Negotiate the Purchase Terms

Once a suitable property has been identified, the parties negotiate the principal commercial terms of the transaction.

These may include price, deposit structure, timing, conditions, included items and other property-specific considerations.

4. Conduct Due Diligence

Before closing, the property's legal and transactional documentation should be appropriately reviewed.

The scope of due diligence depends on the property and transaction.

5. Confirm the Ownership Structure

For foreign buyers, this includes determining whether the property falls within the restricted zone and which ownership structure is appropriate.

For many residential purchases in coastal destinations such as Zihuatanejo, this means coordinating a fideicomiso.

6. Coordinate the Fideicomiso, When Applicable

The appropriate professionals, bank and authorities coordinate the trust documentation and required authorization.

7. Prepare for Closing

The closing process brings together the legal documentation, financial requirements, applicable taxes and fees, trust documentation when applicable, and other transaction-specific requirements.

8. Execute the Transaction

Real-estate transfers in Mexico are formalized through the applicable legal and notarial process.

9. Registration and Post-Closing

Following execution, the relevant public deed and property rights must proceed through the applicable registration process.

Buyers should also organize ongoing property matters such as taxes, trust fees where applicable, HOA obligations, insurance, utilities and property management.

WHY DUE DILIGENCE MATTERS

Never Treat Two Properties as Identical

Due diligence is one of the most important parts of buying real estate in Mexico.

The documents and investigations required depend on the type of property, ownership history, location, condominium structure, construction status and other circumstances.

Depending on the transaction, professional review may include matters such as:

• Ownership and title documentation

• Existing liens or encumbrances

• Property identification and legal description

• Applicable taxes and outstanding obligations

• Condominium regime and HOA documentation

• Construction and property documentation

• Seller authority and identification

• Existing fideicomiso documentation, when applicable

• Transaction-specific permits or authorizations

• Closing documentation

A premium oceanview property and an undeveloped homesite may require very different questions.

Due diligence should be specific to the property—not treated as a generic checklist.

WHAT IS THE ROLE OF A NOTARIO PÚBLICO?

More Than a Traditional Notary

International buyers should not assume that a Mexican Notario Público performs the same limited role associated with a notary public in Canada or the United States.

In Mexico, the Notario Público is a specially authorized legal professional who plays a central role in formalizing real-estate transactions.

The notarial process is part of preparing and formalizing the public deed and coordinating legal requirements associated with the transfer.

The Notario Público is an essential participant in the transaction, but buyers may still choose to obtain their own independent legal, tax, accounting or other professional advice depending on their circumstances.

WHAT DOES IT COST TO BUY PROPERTY IN MEXICO?

Look Beyond the Purchase Price

International buyers should budget for transaction costs in addition to the negotiated purchase price.

Depending on the transaction, costs may include:

• Acquisition-related taxes

• Notarial fees

• Public registry expenses

• Fideicomiso setup and authorization costs, when applicable

• Bank fees

• Legal or professional fees

• Valuations or certificates where required

• Other property-specific closing expenses

There is no single percentage that accurately represents every Mexican property transaction.

Costs vary based on the property, transaction value, jurisdiction, ownership structure and services required.

For example, SRE currently publishes government fees applicable to restricted-zone fideicomiso permits, but these official fees can change from year to year.

For this reason, buyers should request a transaction-specific closing estimate rather than relying on generic percentages found online.

WHAT ARE THE ONGOING COSTS OF OWNERSHIP?

After closing, buyers should consider the ongoing costs associated with owning and maintaining the property.

Depending on the property, these may include:

• Property taxes

• HOA or condominium fees

• Annual fideicomiso bank fees, when applicable

• Insurance

• Utilities

• Maintenance

• Property management

• Rental administration

• Accounting or tax compliance when applicable

These costs can vary considerably between a condominium, private villa, vacant homesite and larger residential property.

CAN FOREIGN OWNERS RENT THEIR PROPERTY?

Potentially, yes, subject to the property's applicable rules and Mexican legal and tax requirements.

The ability to own a property and the obligations associated with generating rental income are separate issues.

Owners planning to rent their property should consider:

• Condominium or community regulations

• Rental management requirements

• Mexican tax obligations

• Invoicing or reporting requirements where applicable

• Property management

• Insurance

• Local rules applicable to the property or rental activity

Mexico's tax authority treats income from the rental of real property as taxable activity subject to the applicable tax regime.

International owners considering rental income should obtain current Mexican tax and accounting advice based on their circumstances.

CAN I SELL MY PROPERTY LATER?

Generally, property interests acquired through the appropriate ownership structure can later be transferred or sold, subject to the applicable legal, trust, tax and closing requirements.

A future sale may involve taxes and transaction costs, and the tax consequences can differ significantly depending on the seller, property, ownership structure and circumstances.

Buyers who expect eventual resale should consider those implications when establishing their ownership structure rather than waiting until the property is sold.

CAN I LEAVE MY PROPERTY TO MY HEIRS?

Estate and succession planning should be considered when establishing the ownership structure.

A fideicomiso can include provisions relating to substitute or successor beneficiaries, but these should be established correctly in the trust documentation.

International buyers should consider how Mexican property ownership interacts with their broader estate planning and obtain appropriate advice in the relevant jurisdictions.

PRE-CONSTRUCTION VS. RESALE PROPERTY

Different Properties Require Different Questions

Buying a completed resale property and purchasing a pre-construction residence involve different considerations.

Resale Property

Buyers may need to focus on matters such as:

• Existing ownership documentation

• Property condition

• Existing fideicomiso

• Liens or encumbrances

• Condominium obligations

• Improvements or modifications

• Closing readiness

Pre-Construction Property

The focus may include:

• Developer and project documentation

• Purchase contract

• Payment schedule

• Delivery expectations

• Specifications and finishes

• Condominium structure

• Construction progress

• Cancellation/default provisions

• Closing requirements upon completion

Neither is inherently better.

The right option depends on the buyer's objectives, timeline, risk tolerance and intended use.

Buyers can compare selected new developments through our Represented Propertiesor explore completed and resale opportunities through our broader property portfolio.

BUYING PROPERTY IN ZIHUATANEJO

A Coastal Market With Distinct Residential Areas

Zihuatanejo offers a diverse real-estate market ranging from established hillside residences and oceanview condominiums to residential homesites, boutique developments and beachfront communities.

Areas frequently considered by buyers include:

Playa La Ropa — established residential and resort setting close to one of Zihuatanejo's best-known beaches.

Cerro del Vigía — a private gated hillside community overlooking the coastline, offering residences, villas and residential lots.

Playa Blanca — a quieter coastal corridor with beachfront and low-density residential opportunities.

Playa Larga — an expanding coastal area offering beachfront and master-planned residential opportunities.

Ixtapa — a neighboring resort destination with established condominium, marina and residential inventory.

Different locations offer very different ownership experiences.

Our Zihuatanejo Real Estate guide provides a broader introduction to the market and its residential areas.