As we enter 2017 there are a few things you should know about Mexico real estate that will help inform your purchase.
First, if you are not a citizen of Mexico, you will need to have a 50-year, renewable fideicomiso trust in order to have ownership rights of property. If your spouse is a Mexican national and you want to avoid the cost of a trust, your spouse can be the sole owner named in the escritura, or title. In that case, there will be no trust and you may be named his/her beneficiary. In the case of the death of your spouse, you cannot continue to own the property without obtaining a trust. You will have to sell your property if you do not obtain a trust.
A solution to this problem is for both to be in a trust and make each other a beneficiary. You can name subsequent beneficiaries to acquire ownership rights after you both are deceased.
If you both survive and want to sell at a later date, the spouse who is a Mexican national may be eligible for a partial exemption or lesser capital gains tax. If you are not a Mexican national, you will pay your share of tax owed, separately from what he/she owes. If you have a working visa, for example, you may be eligible under this type of visa for a partial exemption as a fiscal resident paying Mexican taxes on ordinary income.
In the Puerto Vallarta market, niches or pockets of properties by type, price and location are selling well in certain areas. For example, new construction of condominiums in the Zona Romantica neighborhood south of the Cuale River is pre-selling well at this time. Certain existing projects with high-end amenities located in Puerto Vallarta or on the south side of Vallarta, have resales when others have no showings. Single-family homes in Bucerias, Centro North, La Cruz, Nuevo Vallarta West, Punta Mita, San Pancho, and the South Shore were the most active. In the majority of these markets, average sales prices last year increased over 2015.
You should also know that during the first quarter of 2017 many of the condo associations hold their required meetings for the year. One of the main subjects is voting and discussion of the yearly budget, and sometimes, bylaw changes.
A simple majority vote is needed to approve the regular budget. A higher percentage approval vote is necessary in the case of bylaw changes, capital improvements or special assessments. A 75 percent vote in favor is required to pass a change in a bylaw or establish a new bylaw. Owners or proxies not in attendance the day of the meeting may send their written vote within 30 days of the meeting.
Decisions at the meeting, which may include changes to bylaws, approval of financials and election of the board, must be translated into Spanish. These minutes must be notarized and recorded in the public registry in order to be valid and enforceable.
This article is based upon Flex MLS statistics, legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller conduct his/her own due diligence and review.
