How to buy a house in Mexico as an expat

Buying property in Mexico as a foreigner is far more common than many people think. But there’s one key legal difference compared to most European countries: the “restricted zone.”

If the property is on the coast or near a border, the process works differently from how it does for Mexican citizens. It’s not a problem, but it’s something you should be aware of before you start negotiating.

In this guide, you’ll find everything you need to understand the process clearly: what a fideicomiso is, how property prices vary by area, what taxes you’ll pay, how the step-by-step process works, and the key red flags to watch out for.

Requirements for foreigners to buy a house in Mexico

Before talking about prices or the process, you need to understand the legal rules. In Mexico, there’s a constitutional restriction that affects foreigners buying near the coast or borders. Knowing this ahead of time helps you avoid surprises.

The restricted zone and Article 27 of the Constitution

Under Article 27, Section I of the Mexican Constitution, foreigners are not allowed to directly own land or water within 100 kilometers of the borders or 50 kilometers from the coastline.

In practice, this means that in popular coastal spots like Cancún, Tulum, Playa del Carmen, Los Cabos, or Puerto Vallarta, you can’t own the property directly in your name. The same goes for areas near the U.S., Guatemala, or Belize borders. This is what’s known as the “restricted zone.”

Outside the restricted zone, like in Mexico City, Guadalajara, Querétaro, Mérida’s historic center, or San Miguel de Allende, foreigners can buy property directly in their own name, just like locals.

The fideicomiso: The legal solution for buying in the restricted zone

The legal way to buy in the restricted zone is through a bank trust called a fideicomiso. It’s not as complicated as it sounds, the process is usually more straightforward than people expect.

A fideicomiso is a trust agreement where a Mexican bank holds the property title, while the foreign buyer is the beneficiary. This means the buyer has full rights to use, rent, improve, sell, or pass the property on through inheritance.

In simple terms, the bank is the legal owner on paper, but you are the one who fully controls the property. You can live in it, rent it out, renovate it, sell it, or pass it on to your heirs. The property is legally protected, and if the bank goes bankrupt, it gets transferred to another institution without affecting your rights.

The fideicomiso lasts 50 years and can be renewed for the same length of time. Banks charge an annual maintenance fee of around $450 to $555, though there may also be additional costs like closing fees, taxes, and legal or real estate agent fees.

Mexican banks that offer this service include BBVA México, Banorte, Santander México, and Banamex, among others. Each one has its own fees and conditions, so it’s always best to compare them before making a decision.

Permit from the Ministry of Foreign Affairs

To set up a fideicomiso, the bank first needs permission from Mexico’s Foreign Ministry (SRE). The bank usually handles this, not the buyer. In most cases, you just need to sign the required waiver.

Documents you will need

Regardless of whether the purchase is in a restricted area or not, these are the standard documents required for a foreign buyer:

• A valid passport.
• A temporary or permanent residence permit issued by the National Institute of Migration (INM). You don’t always need it to complete the purchase itself, but you do need it for related procedures.
• Federal Taxpayer Identification Number (RFC) issued by the Tax Administration Service (SAT), required for the payment of taxes associated with the purchase.
• Proof of the lawful source of the funds, especially if the money comes from abroad.
• If the property is in the restricted zone, you also sign a waiver with the SRE stating that you agree to follow Mexican law and give up any diplomatic protection from your home country regarding that property.

Do you need a lawyer?

You’re not legally required to hire one, but doing it without legal advice in a market with its own rules is risky. A real estate lawyer in Mexico will check the property’s legal status in the Public Registry, review the sales contract before you sign, and handle the fideicomiso process with the bank. Their fee is typically about 1% to 1.5% of the property price.

How much does a house cost in Mexico?

Mexico’s real estate market is one of the most diverse in Latin America. You can find colonial homes in Oaxaca’s historic center for under $100,000, or luxury beachfront penthouses in the Riviera Maya that cost over a million dollars. Prices mainly depend on location, property type, and whether it’s in a tourist development aimed at foreign buyers.

Mexico City

Mexico City has become the most expensive area in the country, with an average price of 58,000 MXN per square meter and an annual increase of 5.4%. That’s roughly $2,900–3,000 per square meter at current exchange rates.

The most popular areas like Polanco, Condesa, Roma, and Santa Fe can go over $4,000 per square meter. Cheaper areas like Coyoacán or Del Valle still offer a good quality of life. In Mexico City, a two-bedroom apartment in a nice area usually costs between $180,000 and $350,000, depending on the neighborhood and finishes.

Riviera Maya: Cancún, Playa del Carmen, and Tulum

It’s the market that attracts the most foreign buyers and has seen the strongest price growth in recent years. Projects like the Maya Train and the new Tulum international airport have only sped up that trend.

In Playa del Carmen and Tulum, condos aimed at international buyers typically range from $2,000 to $4,500 per m², depending on how close they are to the beach and the amenities included. A two-bedroom apartment in a high-demand area starts at around $200,000. Beachfront properties or those with direct beach access can easily go above $500,000.

Tulum has shifted from a quiet alternative spot to one of Mexico’s most speculative property markets. Developments in areas like Aldea Zama or near the ruins now sell at prices that would have been hard to imagine just a decade ago.

Mérida and Yucatán

Mérida has become one of the most popular cities for foreign buyers looking for a high quality of life without the fast pace of the Riviera Maya. The price per square meter has risen from 30,211 pesos in 2022 to 37,748 pesos in 2024, a 25% increase. At current exchange rates, that’s roughly $1,900 per m².

The historic center is still the top choice for colonial homes, though prices have gone up a lot. In the north, where newer developments and gated communities are concentrated, prices for new builds range from $2,500 to $5,000 per m². A big advantage for foreigners is that much of Mérida is outside the restricted zone, so you can buy directly in your own name without a fideicomiso.

San Miguel de Allende and Bajío

San Miguel de Allende has one of the most established expat communities in Mexico. Restored colonial homes in the historic center start at around $235,000 for smaller properties, while larger, well-located houses can easily exceed $600,000 to $800,000. It’s a high-demand, low-supply market, which keeps prices rising.

Oaxaca, Puerto Vallarta, and other destinations

Oaxaca is still relatively affordable, especially in the center and areas like Jalatlaco or Reforma, where you can find colonial homes starting around $100,000, though prices have risen quite a bit. Puerto Vallarta and Bahía de Banderas are more developed, tourism-driven markets, with prices ranging from $2,000 to $5,000 per m² depending on location and beach access.

Maintenance costs

Gated communities and condos in Mexico usually charge monthly maintenance fees that vary widely depending on what’s included. In mid-range developments in the Riviera Maya, these fees typically range from $200 to $500 per month. In luxury projects with amenities like a clubhouse, pools, 24/7 security, and landscaped gardens, they can be even higher.

Taxes on a house in Mexico

The Mexican tax system for purchasing real estate is relatively straightforward, although there are variations by state that you should be aware of in advance.

1. ISAI: Real Estate Acquisition Tax

This is the tax paid when purchasing a property. It’s a state tax, and the rate depends on the region. In Mexico City, it’s about 4.5% of the transaction value. In Quintana Roo (home to Cancún, Playa del Carmen, and Tulum), it’s around 3%, and in Yucatán it’s roughly 3.5%. The buyer pays this tax when the property is officially registered with the notary.

2. Notary fees and deed registration costs

A notary public is required for any real estate transaction in Mexico. Their fees vary depending on the state and the property price, but they’re usually between 1% and 2% of the purchase value. On top of that, there are also costs for registering the property in the Public Registry and certification fees.

In total, extra costs like taxes, notary, registration, and legal fees usually come to about 4% to 7% of the property price. You should include this in your budget from the start.

3. Fideicomiso costs

If you’re buying in the restricted zone, you’ll also need to account for fideicomiso costs, including an upfront setup fee and the bank’s annual management fee, which is typically around $450 to $555 per year.

4. Property tax: The annual property tax

It’s generally much lower than in most European countries and is based on the property’s assessed cadastral value, which is usually below market value. In Mexico City, it can range from about $500 to $2,000 a year for a mid-range property, depending on the borough and its assessed value.

5. Income Tax on the Sale

When you sell a property in Mexico, any capital gains are subject to income tax (ISR). For tax residents in Mexico, there’s an exemption of up to four million pesos when selling a primary residence, as long as certain conditions are met. For non-residents, a withholding tax is applied on the profit.

The specifics vary depending on each buyer’s tax situation, and it is advisable to consult a tax advisor before closing any transaction.

Steps for buying a house in Mexico

Buying a home in Mexico comes with a few important steps, and understanding them in advance can save you a lot of trouble later on. Here’s a simple guide to help you navigate the process:

1. Decide what you’re looking for and in which area

Before looking at any properties, be clear about whether you’re buying for personal use, vacation rentals, or purely as an investment. That will determine the best area and type of property for you.

A condo in Playa del Carmen is very different from a colonial home in Mérida or an apartment in Mexico City. Defining your goal early also helps you know whether you’ll need a fideicomiso for a coastal property or if you can buy directly in your own name.

2. Hire a specialized attorney

Before signing anything, hire a lawyer who specializes in Mexican real estate law. Their first job is to check the property’s legal status in the Public Registry: confirming the seller is the rightful owner, making sure there are no mortgages, liens, or unpaid property taxes, and verifying that all permits and paperwork are in order.

3. Obtain your RFC from the SAT

The RFC (Federal Taxpayer Registry) is required to pay the taxes related to the purchase. It’s issued by Mexico’s tax authority (SAT), and you can apply in person at any SAT office in Mexico or, in some cases, through a legal representative with power of attorney.

4. Sign the preliminary sales agreement

Once the property has been checked and the price agreed, both sides sign the purchase agreement. The buyer usually pays a deposit of 10% to 20% of the price. Make sure the contract clearly says when the deposit must be returned if the seller causes the deal to fall through.

5. Initiate the fideicomiso process (if applicable)

If the property is in the restricted zone, this is when the trustee bank starts the process of requesting approval from the SRE. Once all the required documents and signed application are submitted, the response usually takes around 12 business days. The bank handles the process, but the buyer still needs to sign the necessary paperwork.

6. Sign the deed before a notary

Once the SRE permit is obtained (if needed) and everything is paid up, the final deed is signed before a notary public. At that point, you pay the taxes and notary fees, and the notary officially transfers the property.

7. Register the property with the Public Registry

The notary usually takes care of registering the ownership change in the Public Registry of Property. Only once that’s done can you say with full legal certainty that the property is yours.

How do you pay for a house in Mexico?

In Mexico, especially in coastal and tourist areas, developers and agents design the real estate market to attract foreign buyers. In fact, sellers often quote prices in US dollars, even though the official currency is the Mexican peso.

When it comes time to transfer the funds, you have several options. Here’s how they typically work in practice:

1. International money transfers

Bank transfers are the most common way to pay. However, when sending large amounts internationally, traditional banks often charge high fees and offer poor exchange rates. To reduce costs, many people use specialized services like Wise or similar platforms, which tend to be much more competitive.

Mexico has very strict anti–money laundering rules. Avoid any unusual or cash payments. Everything must go through official banking channels, because on the day of signing, the notary will require full proof of the source of the funds.

2. Mortgages in Mexico for foreigners

Some major banks like BBVA México, Banorte, or Santander do offer mortgage programs for foreigners, but the requirements are stricter than for Mexican citizens.

In most cases, banks will only finance about 60% to 70% of the property’s value. You’ll also need to provide a lot of paperwork to prove your income, and you may need to have legal residency in Mexico. Interest rates are also higher than in Europe or the US, so mortgages can be expensive.

3. Off-plan purchases

If you’re looking to buy in places like the Riviera Maya, Los Cabos, or Puerto Vallarta, you’ll most likely come across off-plan purchases (pre-sales). It’s a common and convenient system where you pay in stages while the property is being built, without any bank interest involved.

• What does the typical structure look like? You usually start with a small reservation fee (around $2,000 to $5,000) to hold the unit, then pay a down payment of 10% to 30% when you sign the contract. After that, you make instalments during construction and pay the remaining balance when the property is handed over.
• The golden rule: Buying early usually means a lower price and faster value growth, but it depends on the developer being trustworthy. Before paying, check their permits and make sure they have a good record of delivering projects on time.

4. Cash payment (Cash Buyer)

If you have the cash ready, you’re in a strong position. Paying upfront avoids bank approvals, speeds up the process, and gives you more negotiating power. In the resale market, sellers are often more willing to lower the price for a buyer who can pay immediately.

Tips before buying a house in Mexico

Investing in Mexico can be an amazing experience, but to make it as smooth as possible, it’s important to stay realistic. Here are some insider tips to help you move with confidence:

1. Stay connected before, during, and after

Handling a property purchase remotely in another country requires being reachable at all times. For property viewings, Holafly’s Mexico eSIM gives you unlimited data as soon as you land, without needing to swap SIM cards or rely on Wi-Fi.

For longer stays or your first months in Mexico, Holafly’s monthly plans are a great option. You subscribe once and get internet in over 160 countries, with unlimited data or 25 GB per month, automatic renewal, and no surprise charges.

Plus, with the Always On feature, you automatically get 1 GB of backup data each month in over 70 countries for when you need it most. That way, you stay connected even if something urgent comes up.

2. Stop worrying about the fideicomiso

If you’re buying on the coast or near a border, you’ll hear about the fideicomiso a lot. Don’t worry, it’s just the system Mexico uses so foreigners can buy property safely through a bank.

The only important thing here is to set it up through a reputable trustee bank and have your lawyer review and approve the contract.

3. The title deed is non-negotiable

The biggest risk in Mexico is buying a property with legal issues like fake owners, inheritance problems, hidden debts, or disputes. Don’t pay any deposit until your lawyer has checked the property’s full history in the Public Registry. Don’t cut corners on this.

4. Visit the property before making a commitment

Tulum, Playa del Carmen, and Puerto Vallarta look great on social media, but daily life is different. Brochures usually don’t show things like late-night noise, traffic, or the rainy season.

Take a stroll around the area, walk its streets at different times of day, and, if you can, rent a place for a few days before committing to a long-term lease.

5. Be wary of off-plan projects with no track record

The construction boom in coastal areas has brought in experienced developers with decades in the industry, but also some opportunists who sell very polished projects on paper and end up delivering nothing but problems.

If you’re buying off-plan, do your homework on the developer. Ask to see valid building permits, make sure the land is actually in their name, and look into their past projects. If they make excuses about showing the documents, take it as a red flag.

6. Red flags to watch out for

Common sense is your best guide. Be on the lookout if you encounter any of these situations:

• The seller is in a huge hurry to close the deal and is pressuring you to sign right away.
• They’re offering you a “bargain” that’s suspiciously below the market price.
• They only provide contracts in English (in Mexico, the legally valid contract is always the one in Spanish).
• They request large cash advances or direct payments to personal accounts that leave no trace.

If you have even the slightest doubt, stop immediately and call your lawyer. It’s better to miss out on a supposed opportunity than to lose your savings.

Frequently asked questions about buying a house in Mexico

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Paula Henderson

Spanish-English Translator

Hi! I'm a Spanish-English translator working with Holafly, helping bring travel content to life for curious travelers. As a digital nomad with a passion for exploring, I'm always adding new spots to my bucket list. If you love to travel like me, stick around because you're in the right place to find inspiration for your next trip! ✈️🌍

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