Can US citizens buy property in Mexico? Ownership options & taxes
Mexico’s vibrant culture, breathtaking coastlines, and welcoming communities have made it a top destination for Americans dreaming of owning a slice of paradise. From the beaches of Baja to the colonial charm of San Miguel de Allende, buying a house in Mexico as an American has become more than just a trend – it’s a lifestyle shift for thousands of US citizens.
This practical guide breaks down the legal, financial, and tax considerations, tailored for Americans ready to enter the Mexican real estate market with clarity and confidence.
What every buyer should know
- Foreigners can legally own a home in Mexico using a bank trust for restricted coastal and border zones.
- Due diligence is essential when buying property – hire a notario público (notary public) and verify the land title before purchase.
- Expect to pay extra costs when buying property – these include acquisition taxes, notary fees, and yearly property taxes.
Quick answers
- Can US citizens buy property in Mexico? Yes. The legal path depends on the location
- Coastal and border areas often require a bank trust called a fideicomiso (SRE guidance)
- Check the title and the papers – the details matter most at closing
- Mexico taxes can apply to rent or a sale, and US reporting can apply even when the home is abroad (SAT and IRS)
Market pulse: SHF reported home values tied to mortgage credit rose 8.7% in Q2 2025 and 8.4% on an annual basis.
Who this guide is for
- A vacation home buyer who wants a safe, clear purchase
- A rental owner who wants to file taxes the right way
- A relocation buyer who wants the rules in plain English
Can Americans legally own property in Mexico?
Americans can legally buy property in Mexico – and many already do. The country welcomes foreign investment in real estate, and US citizens can fully own homes across most regions. But if you’re buying property in Mexico near the coast or an international border, you’ll need a fideicomiso – a trust held by a Mexican bank that grants full usage rights.
This rule applies to the restricted zone, defined by Article 27 of the Mexican Constitution as land within 100 km (61 miles) of international borders and 50 km (31 miles) of the seacoast. Within this area, foreigners cannot hold direct title but may acquire property through a fideicomiso. A permit must also be secured from the Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores) – and buyers must agree to submit to Mexican jurisdiction and waive diplomatic protection.
Fideicomiso: your key to coastal ownership
Fideicomiso is a legal workaround that allows foreigners to own land in restricted zones of Mexico. In simple terms, it’s a trust agreement where a Mexican bank holds the property title on your behalf, while you retain all ownership rights. The role it plays is:
-
Secure ownership for coastal properties
If you're wondering, "Can an American own land in Mexico’s beachfront areas?" – the fideicomiso is the answer. It legally enables Americans to purchase land within restricted zones that would otherwise be off-limits. -
Long-term validity and transferability
The fideicomiso lasts 50 years and is renewable. It can also be transferred or sold to another foreigner, offering long-term flexibility and investment security. -
Estate planning and legal protection
Fideicomisos allow you to name multiple beneficiaries and avoid inheritance tax, making it a popular choice for American retirees and investors seeking secure property succession in Mexico.
Do you need a residency or visa to buy real estate in Mexico?
Americans can purchase land in Mexico without holding residency or a visa. However, to complete the transaction and register ownership, a Mexican tax ID (RFC) is required.
While obtaining an RFC usually involves temporary or permanent residency, non-residents can still acquire property by working with a legal representative or notary who helps secure the necessary permits and tax filings on their behalf.
If you plan to live in Mexico long-term or generate rental income, having the proper visa and RFC is strongly advised, and the best visas to have are:
-
Temporary resident visa
Popular with Americans buying property in Mexico. It lasts up to four years and supports multiple re-entries. -
Permanent resident visa
Ideal for long-term living and owning property. It never expires and offers stronger financial thresholds for eligibility. -
Work visa
Issued when employed by a Mexican company. Often tied to a temporary resident visa with work authorization.
Steps to buy property in Mexico as an American
| Step | Who | Time (typical) | Docs you’ll be asked for | Common mistake |
|---|---|---|---|---|
| 1) Define buy criteria + budget | Buyer | 1–7 days | ID/passport, rough budget proof | Shopping before confirming restricted-zone rules + true all-in costs |
| 2) Pick location + check restricted zone | Buyer + agent | 1–14 days | Map/address details | Assuming you can buy coastal/border property the same way as inland |
| 3) Shortlist property + basic due diligence | Buyer + agent | 3–14 days | Listing info, seller details | Skipping early red-flag checks (ejido risk, unclear ownership) |
| 4) Hire notary (and optionally attorney) | Buyer | 1–3 days | ID, contact details | Relying on verbal assurances instead of written scope + checks |
| 5) Make an offer + sign promissory agreement | Buyer + seller | 3–10 days | Draft contract, deposit terms | Paying a deposit before deposit terms/conditions are clear in writing |
| 6) Obtain RFC (tax ID) if needed | Buyer + notary/rep | 1–4 weeks | Passport/ID, address, CURP (if applicable), forms | Waiting until the last minute → delays closing |
| 7) Choose ownership structure (direct / fideicomiso / corp) | Buyer + notary + bank | 3–14 days | Property location, intended use (personal/rental), ID | Picking structure without considering ongoing fees + US reporting impact |
| 8) If restricted zone: set up fideicomiso | Bank trustee + notary + buyer | 2–8 weeks | ID, application forms, property details, funds source | Underestimating setup time and annual trustee fees |
| 9) Title search + lien check + property certificates | Notary | 1–4 weeks | Prior deed info, property folio/registry data | Assuming clean title without verifying liens/encumbrances |
| 10) Appraisal / valuation (if required) | Appraiser / lender | 1–2 weeks | Property access, basic details | Using informal price opinions instead of an actual valuation when needed |
| 11) Funds transfer + FX planning | Buyer + bank | 1–10 days | Bank details, proof of funds, KYC docs | Losing money on avoidable FX fees / transfer timing volatility |
| 12) Closing prep: escritura draft + tax/fee calc | Notary | 1–3 weeks | ID, RFC, marriage status docs (if applicable), payment receipts | Not reviewing the escritura carefully (names, amounts, property description) |
| 13) Sign escritura + pay taxes/fees | Buyer + seller + notary | 1 day | IDs, RFC, payment confirmations, final deed | Missing required payments → registration delays or penalties |
| 14) Register deed + finalize trust/corp records | Notary + registry + bank | 2–12 weeks | Signed escritura, receipts, registry forms | Assuming ownership is done before registration is completed |
| 15) Post-close: utilities/HOA + rental setup (if applicable) | Buyer | 1–30 days | IDs, property deed copy, HOA docs, bank acct | Renting without understanding local rules + US reporting for rental income |
Which ownership option is best for buying a home?
Worried which ownership option between fideicomiso and corporation is better when buying a house as a United States citizen in Mexico? This breakdown will clear it up and guide you to making an informed choice.
Fideicomiso: pros & cons
| Pros | Cons | |
|---|---|---|
| Use rights | Full rights to use, lease, improve, and sell the property | Buyer does not hold title directly – the bank holds legal ownership |
| Transfer to heirs | Simple to transfer ownership to heirs or beneficiaries | Requires legal paperwork and bank coordination for changes |
| Inheritance tax | Avoids inheritance tax in many cases | Still subject to US estate reporting requirements |
| Beneficiaries | Multiple beneficiaries can be listed | Adding/removing beneficiaries requires legal fees and bank approval |
| Legal suitability | Ideal legal structure for coastal and border-zone residential properties | Not suitable for all property types, especially outside restricted zones |
| Legal protection | Protects the buyer under Mexican law via notario oversight | Legal protections are under Mexican jurisdiction – may offer limited recourse for US citizens |
When a corporation beats a trust
Buying property in Mexico as an American for commercial or rental income may benefit from forming a Mexican corporation. Unlike a fideicomiso, corporations can own land in restricted zones without trust fees. This is ideal if you're buying property for business, development, or multiple units. Always consult a local attorney to ensure it aligns with your long-term goals.
NOTE! Corporate ownership can change US tax reporting – a foreign corporation or partnership structure may trigger extra IRS forms beyond a simple individual purchase.
This is also where people ask – can Americans buy land in Mexico? The answer is yes. But the location and structure decide the paperwork.
What does it cost to buy a home in Mexico?
Prices can change a lot from one area to the next. Two homes in the same city can have very different price tags. A helpful official trend is Mexico’s SHF housing price index. It tracks home values tied to mortgage credit.
In Q2 2025, SHF reported a rise of 8.7% for the quarter and 8.4% on an annual basis. That trend is useful, but your final price will still depend on the neighborhood, the building, and the condition of the home.
- Mexico City: Average price per square feet in the city center is approximately $348.78 USD, while outside the center it's around $206.50 USD.
- Guadalajara: City center properties average $301.28 USD per square feet, and $200.56 USD outside the center.
(Property prices sourced from Numbeo.)
When you compare locations, the best places to buy property in Mexico often come down to day-to-day life and long-term value. Things like access, insurance risk, and resale demand can matter as much as the view.
Closing costs also add up. These often include notary services, deed registration, and local acquisition taxes. The exact amounts depend on the state and the city. Ask for a written closing estimate early so you can plan your budget.
Estimated closing costs & legal fees
| Cost item | Typical range |
|---|---|
| Notary fees | 0.5–1.5% of purchase price |
| Registration tax | 1–2% depending on location |
| Legal fees | $1,000–$3,000 (varies by complexity) |
| Bank fideicomiso setup | $500–$1,500 one-time + $500 annual maintenance |
| Closing coordinator | $500–$1,000 (if applicable) |
| Title search & due diligence | $300–$600 |
| Appraisal & survey | $300–$700 |
| Agent commission | 2–4% of the purchase price |
NOTE! These additional costs can add around 6%–10% to the total property investment, depending on the state, the property, and whether a fideicomiso is involved.
Hidden costs to watch out for
- Unpaid local bills or property charges tied to the home
- Exchange-rate swings between the offer and the closing
- HOA fees and special assessments in condo buildings
- Maintenance budgets for coastal humidity and storms
Taxes to know before buying property in Mexico
When buying property in Mexico, understanding the tax landscape is crucial for US citizens. From acquisition to ownership and eventual sale, various taxes can impact your investment.
| Stage | Tax / fee (Mexico) | Who pays | Typical range (rule-of-thumb) | When due |
|---|---|---|---|---|
| BUY | Acquisition / transfer tax (ISAI or similar) | Buyer | 2%–5% (varies by state/municipality) | Closing |
| BUY | Notary fees | Usually buyer | 0.5%–1.5% (often value-based) | Closing |
| BUY | Registry / recording fees | Usually buyer | Usually fraction of a % (or fixed + variable) | Closing/registration |
| BUY | Appraisal/valuation (if required) | Buyer (often) | Fixed (varies) | Pre-close |
| OWN | Annual property tax (Predial) | Owner | Often low vs US (varies widely) | Annual |
| OWN | HOA/condo fees (not a tax) | Owner | Wide range (monthly) | Ongoing |
| OWN | Fideicomiso bank fees (if restricted zone) | Owner | Setup + annual fee (varies) | Setup + annual |
| RENT | Rental income tax (ISR) | Landlord | Varies by residency/structure | Ongoing filings |
| RENT | VAT (IVA) on rent (case-dependent) | Landlord remits | Often exempt for residential; commercial often 16% | With invoices/filings |
| SELL | Tax on sale (capital gains / ISR) | Seller (via notary withholding) | Withholding on gross or tax on net gain (varies) | Closing |
| SELL | Sale transaction costs (agent/notary, etc.) | Negotiated | Varies | Closing |
Here's a breakdown of the key tax considerations:
Property taxes: Mexico vs US
Property taxes in Mexico are usually lower than in the US. The yearly property tax is called Impuesto Predial. The rate depends on the city and municipality. A common planning range is 0.1% – 0.3% of the cadastral value, which is often lower than the market value.
In the US, property taxes are also local, but they are usually based on market or assessed value and often fall between 0.7% and 2%+, depending on location.
| Tax type | Mexico | United States |
|---|---|---|
| Annual property tax | A recurring tax on property ownership, based on assessed value and paid yearly 0.1% – 0.3% of cadastral value (varies by municipality) |
0.7% – 2%+ of market or assessed value (varies by location) |
| Acquisition tax (ISAI) | A one-time tax when purchasing property, based on the transaction’s assessed value 2% – 4%, depending on the state |
Typically part of transfer tax or deed registration fees (varies by state) |
Capital gains tax on resale
When selling property in Mexico, non-residents may owe tax on the sale. SAT guidance shows two main options:
- 25% of the gross sale price – based on the full sale amount without deductions
- 35% of the net gain – used when the seller has a representative in Mexico and the sale is completed by public deed before a notary. This option allows certain documented deductions, such as improvements and some selling costs
Rates and withholding can depend on residency and documentation – get notary and tax-pro confirmation before the sale is final.
Selling foreign property can still trigger US reporting. Many sellers report the sale on Form 8949 and Schedule D. If Mexico tax is paid, a Foreign Tax Credit may apply in some cases.
Tax residency rules
Mexico tax residency is not only about counting days. SAT looks at where your main home is. If you also have a home in another country, SAT looks at factors such as whether more than 50% of your yearly income comes from Mexico or whether your main work activities are based there. This matters because Mexican tax residents can be taxed on worldwide income.
US tax implications
American property owners in Mexico also need to follow US reporting rules:
- FBAR filing if foreign bank or financial accounts go over $10,000
- FATCA reporting for foreign assets using Form 8938
- Reporting rental income and capital gains on US tax returns
- Using foreign tax credits or FEIE when it applies
Buying land in Mexico as a US citizen can create tax duties in both countries, so reporting matters. For 2025 income filed in 2026, the IRS due date is April 15, 2026. If your tax home and main residence are outside the US on that date, you generally get an automatic extra 2 months to file – that brings the filing deadline to June 15 (for calendar-year filers).
Our free extension service can help extend the deadline to October 15 or December 15, though any taxes owed are still due by April 15.
What is ejido land, and why is it risky?
Ejido land in Mexico is property designated for agricultural use by local communities. Even if it’s not actively farmed, land zoned as ejido land can sometimes be regularized/converted through formal processes, but it’s complex and high-risk if not fully regularized. Treat it as a major due diligence red flag unless your notario confirms the land is fully privatized and registry-clean.
Foreigners cannot directly purchase ejido land unless it’s privatized, transferred to a Mexican citizen, and then sold, a complex, time-consuming, and often unsuccessful process. This creates significant legal uncertainty and potential loss of investment for buyers.
To avoid complications, here's how to verify if the land is legally safe to purchase:
- Consult a notario público as they can access the property’s legal status and history.
- Request an official title search and confirm the land is not still zoned as ejido.
- Ask for proof of privatization to ensure the property was legally transferred.
- Work with a local real estate attorney because they can flag red flags before you commit.
Ready to own land in Mexico minus the tax stress?
Buying property in Mexico can be a dream come true for US citizens, but only if you handle the legal and tax details correctly. From trust structures to IRS reporting, expert guidance is essential to avoid costly mistakes.
Our team at Taxes for Expats helps you stay compliant, reduce tax burdens, and enjoy your Mexican home with confidence.
FAQs on buying property in Mexico as a US citizen
No – VA home loans can be used only for property within the US and its territories, so a home purchase in Mexico is typically outside the program. Many buyers use cash or pursue other financing/mortgage options instead.
Yes – many Americans buy a second home first and decide later whether to relocate. If you’re buying in a condo, review HOA/condo rules (use restrictions, rental limits, fees) early because they can affect how you can live in or rent the property.
Usually not – financing/mortgage options can be more limited, and terms, documentation, and down payments can differ. Some buyers arrange financing in the US (for example, against US assets) and purchase in Mexico with cash at closing.
No – foreigners can legally acquire property rights in Mexico, and in restricted areas, the common path is a fideicomiso (bank trust) handled through the proper Mexican Foreign Affairs (SRE) process and closing before a notary/public deed and registration.
Yes – within the constitutionally defined restricted zone (near borders/coasts), many residential buyers use a fideicomiso rather than holding direct title.
Yes, but beach areas are often inside the restricted zone, so the usual structure is a bank trust (fideicomiso) plus careful closing documents, notary oversight, and registration.
The biggest risks are title issues and informal deals that skip proper notarization/registration. Some buyers choose escrow/title insurance from private providers for extra protection, but the core safeguard is verified documentation, a proper public deed, and registration through the formal process.
Think in two tracks: Mexico rules may apply to rental/sale reporting, and US rules apply to your worldwide income and foreign accounts. The IRS confirms that directly held foreign real estate is not reported on Form 8938, but related foreign bank accounts (including accounts used for closing/escrow funds) can still trigger FBAR/FATCA filings depending on your facts.
Sometimes, yes – but the structure can change your US reporting and compliance. Get qualified advice before using a company or trust structure.
Mexico requires you to declare if you enter or leave with more than $10,000 USD (or equivalent) in cash/monetary instruments; the US also requires reporting when traveling with more than $10,000.
