My friend Bruce Greenberg spent time in Puerto Vallarta and in Arizona practicing as an appraiser. He was an asset to our growing real estate market as we all worked to become more knowledgeable and professional. He often said, “Don’t leave your brain at the border when buying or selling real estate in Mexico.”
That should apply to all of us expats. I want to share with you today some of the things Bruce felt it was important for expats in Mexico real estate buyers and sellers to know and do:
- As a foreigner and not a Mexican citizen you need to understand the use of a Mexican trust or fideicomiso within the federal zone.
- You should use a notary and your attorney to verify the property is private and can be transferred.
- Explore the pros and cons of assuming an existing trust or a new one if you live within the federal zone. Current terms are for 50 years, renewable.
- Find out if there are differences in banks that hold trusts?
- Ask about and understand closing costs for a buyer.
- Understand your annual cost for the trust and property tax.
- Where do you pay the bank trust and the property tax?
- Investigate the type of condominium regime that is part of the property you want to buy.
- You will want to know the rules and bylaws, pet policy, financials and decisions in formal meetings with recorded minutes.
- Understand what HOA fees include and how fees may be increased.
- What are the terms and costs of buying with a mortgage or do you pay cash?
- Understand the role of the notary public and his/her powers and responsibilities.
- Do you want a resident visa or work permit?
- Hacienda is the Mexican form of IRS. Do you need to file Mexican income taxes?
- Know about IVA tax and what goods and services require it.
- Where do you pay for utilities like electric, phone, TV and Internet?
- Is household insurance available and what does it cover?
- For insurance, you always want liability coverage in case someone is hurt.
Bruce didn’t leave his brain at the border and I hope you don’t either. Check to see if you can answer these questions.
This article is based upon legal opinions, current practices and my personal experiences. I recommend that each potential buyer or seller conduct his/her own due diligence and review.