Step-by-Step Guide to Buying Real Estate in Mexico (Riviera Maya)

Purchasing real estate in Mexico, especially along the Riviera Maya coast, is attractive to many foreign investors, including Russians, due to its beautiful beaches, stable climate, and the opportunity to generate rental income or live in this exotic region. 

In this step-by-step guide, we will explore the process of buying real estate in Mexico, the features of the local market, and key details to consider.

1. Researching the Real Estate Market in Mexico

Before investing in real estate, it is essential to thoroughly research the market. The Riviera Maya is a popular tourist area that includes cities such as Playa del Carmen, Cancun, Tulum, and Coba. Key factors to consider include:

Types of Real Estate: 

residential complexes, apartments, villas, commercial properties, and land for development.

Prices: prices can vary significantly depending on location, property type, and condition.

Market Trends: price fluctuations, rental potential, and investment payback periods.

Additionally, you need to determine what type of property interests you (villa, apartment, land) and your goals for purchasing (personal use, rental, long-term investment).

2. Understanding the Legal Framework

Mexico has specific rules and restrictions for foreign nationals purchasing property, particularly in coastal areas like the Riviera Maya. It is important to understand the following aspects:

Restricted Ownership Zones: According to Mexican law, foreign nationals cannot own property within 50 km of the coast or 100 km of the borders. However, this does not mean you cannot purchase property in these areas—there is a mechanism through trust ownership (fideicomiso).

Trust Ownership (Fideicomiso): This is a special contract that allows foreigners to own property in coastal and border areas. The bank becomes the legal owner of the property, and the buyer is the beneficiary who has full rights to use and sell the property.

Property Title Process: A contract must be signed with a notary who will confirm the legitimacy of the transaction and ensure that all legal requirements are met.

3. Choosing and Viewing Properties

Once you have established a budget and understand the legal aspects, it is important to choose a property. To make the right choice:

Work with a Local Agent: An experienced real estate agent will help you navigate the local markets, suggest properties that meet your criteria, and help you avoid potential legal risks.

View the Properties: It is always recommended to visit properties in person to assess their condition and learn more about the area where they are located.

Check the Documents: Ensure that all property documents are in order and that there are no legal disputes regarding the property.

4. Legal Review and Contract Signing

Before finalizing the deal, a legal review of the property is essential. You will need to:

Obtain Legal Advice: Hire a local lawyer to review all property documents, verify the seller’s ownership rights, confirm there are no debts on the property, and check for any other legal restrictions.

Sign the Contract: Once everything has been verified, you will be presented with a preliminary purchase agreement (contrato de compraventa), which outlines the terms of the transaction.

Payment: Typically, the transaction is conducted through an escrow account (escrow), which protects both parties, as the funds are held in the account and only released to the seller once the conditions of the transaction are met.

5. Notary Public Process

In Mexico, real estate transactions must be notarized. The notary public will confirm the legality of the transaction and register your property ownership in the public registers. During this process:

The Notary Reviews Documents: The notary will ensure that all necessary documents, including identification and proof of funds, are in place.

Payment of Taxes and Fees: 

The buyer is responsible for paying various taxes and fees, such as the property transfer tax, notary fees, and registration costs.

6. Taxes and Fees When Buying Property

When purchasing property in Mexico, the following taxes and fees should be taken into account:

Property Transfer Tax (ISAI): Typically around 2-4% of the property’s value.

Registration Fees: Costs for registering the property in the public registry, notary services, and other administrative fees.

Legal Services: Fees for hiring a lawyer to verify documents.

7. Owning and Operating Property

Once the deal is completed and you are the legal owner of the property, it is important to comply with local laws and taxes:

Property Taxes: Property owners are required to pay annual property taxes (predial).

Property Management: If you plan to rent out the property, you must register with the tax authorities and pay taxes on rental income.

Local Regulations: It is important to comply with local laws, including rules regarding construction, use, and maintenance.

8. Selling Property

If you decide to sell your property in Mexico in the future, you will need to go through a few steps:

Legal Review: Ensure that all property documents are in order.

Taxes on Sale: When selling the property, you may be required to pay capital gains tax (if applicable).

Sale Through a Notary: The sale process must also be notarized.

Conclusion

Buying real estate in Mexico, particularly along the Riviera Maya, can be an excellent investment. 

However, it is essential to understand the legal and financial nuances of the process. 

Working with local professionals (agents, lawyers, notaries) will help you avoid mistakes and ensure the security of the transaction. 

A careful approach to choosing property, attention to detail, and adherence to the law are key elements of a successful real estate purchase in Mexico.