Housing and Property in Mexico

Foreigners can own property in Mexico. The confusion is about where, and through what structure — and the misunderstandings are expensive. A foreigner may hold title outright across most of the country, needs a bank trust to buy near a coast or a border, and can lose the entire purchase price by buying farmland that was never legally sellable in the first place. All three of those facts are settled law, and all three are routinely misrepresented by people selling property.

Renting

The traditional Mexican requirement is an aval or fiador — a guarantor who owns unmortgaged property in the same city and pledges it against your lease. Foreigners almost never have one, and this is the single most common obstacle to renting.

The market’s answer is the póliza jurídica: a legal-services policy under which a law firm screens the tenant and commits to funding eviction or collection proceedings for the landlord. It has become the standard substitute in the big cities. It typically costs 30 to 60% of one month’s rent, and although the landlord is the beneficiary, in practice the tenant pays it.

Where the aval actually bites varies a great deal. It is applied most rigidly in institutional long-term rentals in Mexico City, Guadalajara, Monterrey and Querétaro. It is frequently waived or replaced in the furnished expat markets of Playa del Carmen, Tulum, Puerto Vallarta, San Miguel de Allende and Mérida, and in direct owner-to-tenant deals anywhere. Common workarounds are two or three months’ deposit, or several months’ rent paid up front.

Expect to be asked for a passport, your residency card, and proof of income — payroll receipts if you work in Mexico, foreign bank statements if you work remotely. Landlords commonly want to see income of at least three times the rent.

On terms: the deposit is customarily one month’s rent, with no statutory cap, and should come back within thirty days of handover less documented damages. Mexico City’s civil code sets a minimum residential lease of one year and twelve months is the norm nationally. If you stay past expiry without objection, the lease renews automatically. Rent increases are not capped by statute, but the inflation index is the accepted benchmark and courts reject disproportionate rises. Eviction is judicial only — lockouts are illegal — and a contested eviction runs six to eighteen months, which is precisely why landlords want that guarantor.

One caveat worth carrying: civil codes are state law. The detail above is Mexico City’s; other states differ in specifics while following the same shape.

Buying near the coast: the fideicomiso

Article 27 of the Constitution bars foreigners from holding direct title to land within 50 km of a coastline or 100 km of a land border. That captures Cancún, Playa del Carmen, Tulum, Puerto Vallarta, Los Cabos, Mazatlán, Progreso and every other beach town — which is why the trust exists.

A fideicomiso is a trust in which a Mexican bank holds legal title and you are the beneficiary. As beneficiary you may occupy, renovate, rent out, mortgage and sell the property, and you may name substitute beneficiaries so it passes on death without Mexican probate — which is a genuine advantage over direct ownership, not merely a workaround.

• Term: 50 years, renewable on application, customarily filed around 90 business days before expiry.
• Permit: issued by the foreign ministry. The 2026 fee is 21,650 pesos. The permit is valid 180 days and extendable once.
• Bank set-up: roughly 500 to 1,500 US dollars depending on the bank.
• Annual trustee fee: roughly 500 to 700 US dollars a year, for as long as you hold it.

The foreign ministry is legally required to resolve a permit within five business days, though it has itself acknowledged delays caused by problems with its electronic filing system — budget more time than the statute suggests.

A correction worth making loudly, because it is widely sold the other way. A Mexican corporation with a foreign-admission clause may buy restricted-zone real estate directly — but only for non-residential purposes: commercial, industrial, tourism or development use. It cannot lawfully be used to hold a beach house for your own use. That structure is appropriate for a genuine rental business, several properties, or a development project, and it brings corporate accounting and monthly tax filings that often cost more than the trust it was meant to avoid. Anyone recommending a company purely to dodge a fideicomiso on a family home is recommending something non-compliant.

Buying inland: direct ownership

Outside those strips a foreigner may hold ordinary fee-simple title in their own name. The only requirement is the Calvo Clause — a written agreement to be treated as a Mexican national in respect of the property, and to waive the right to invoke your own government’s protection over it. The notary inserts it into the deed.

If your country has diplomatic relations with Mexico, no permit is needed, only the agreement. This is what makes buying straightforward in Mexico City, Guadalajara, San Miguel de Allende, Querétaro, Puebla, Guanajuato, Morelia and inland Mérida.

How a purchase actually works

The central figure is the notario público, and the word is a false friend. A Mexican notary is a state-appointed lawyer holding public faith, with a legal monopoly on conveyancing. They search and update the public registry, obtain clearances for property tax and water, verify the seller can actually sell, draft the deed, calculate and remit the taxes, and register the new title. They are not optional and they are not a rubber stamp.

The buyer pays the acquisition tax, ISAI, which is set by state and municipality. It ranges from 1.5% in Chiapas to 5.5% in the State of Mexico, averaging 2.87% nationally. Add notary fees of roughly 1.5 to 2.5% plus tax, registry rights, an appraisal and certificates, and total closing costs land between 5 and 8% of the price — more in the restricted zone once the permit and trust are included.

Allow two to five months end to end. Registry inscription is the bottleneck at three to ten weeks, and a restricted-zone purchase adds the permit and trust on top.

Selling, and the tax nobody plans for

Capital gains on Mexican property are charged as income tax, and the treatment depends entirely on your tax residency, not your nationality.

• Mexican tax residents, including resident foreigners, pay progressive rates up to 35% on the net gain, after deducting the inflation-indexed purchase price, documented improvements, notary fees and commissions.
• Non-residents pay 25% of the gross sale price, or 35% of the net gain if they appoint a Mexican legal representative who accepts joint liability.

There is a primary-residence exemption, and it is generous — but it is also where foreign sellers get caught. It exempts up to 700,000 UDIS of the sale price, not the gain, which is roughly 6.18 million pesos in 2026, and can be used once every three years. To claim it you must prove you lived there, and you must be a Mexican tax resident. A foreigner who has moved home and later sells the Mexican property does not qualify and faces the non-resident regime on the full sale price.

Confirm the current interval and cap with a notary or accountant before relying on them — published sources disagree on the exemption’s frequency, and the amounts move with the UDI.

Mortgages

Mexican banks will lend to foreigners, but generally only to permanent residents, and they will want an RFC tax number, proof of income, credit references and a medical certificate. Temporary residents are usually shut out.

Specialist cross-border lenders offer US-dollar mortgages on Mexican property, typically capped at 70% of value with a minimum loan around 100,000 dollars, at rates above US levels but below peso rates. Developer financing and seller financing are both common, the latter formalised before a notary.

The context that explains all of this: more than 90% of Mexican residential transactions are cash. Financing is the exception, not the norm. And borrowing in pesos while earning in dollars adds a currency risk on top of the interest rate.

Ejido land: how foreigners lose everything

Ejido land is owned collectively by a legally recognized agrarian community, not by individuals. It is the legacy of twentieth-century land reform and it covers roughly 100 million hectares across some 32,000 ejidos — close to half the country.

Here is the whole problem in one sentence: an ejido parcel cannot be validly sold to an outsider while it remains under the communal regime. A sale before conversion is legally void — the seller had nothing to transfer. The buyer acquires no enforceable right to the land, only a personal claim against whoever took the money, who has usually gone.

Converting ejido land to full private title, dominio pleno, takes three sequential steps: individual parcel certification through the agrarian registry, authorization by a two-thirds vote of the ejido assembly, and cancellation in the agrarian registry followed by inscription in the state property registry. Miss any step and the chain is broken.

The frauds follow predictable patterns: records split between the two registries so an incomplete conversion looks clean; several resales putting distance between the current seller and the original irregularity; conversions started and quietly abandoned. Checking the state property registry alone is not enough — both registries must be checked and the boundaries reconciled. The risk is concentrated exactly where foreigners buy: the Riviera Maya, Tulum, Bacalar, Puerto Escondido and other fast-developing coastline.

Use your own notary, not the seller’s. It is the cheapest insurance in the transaction.

Property tax

Predial is municipal, so rates vary, but they are low by any international standard — typically 0.25 to 0.5% of cadastral value, and cadastral value is itself commonly only 30 to 70% of market value. A Mexico City property assessed at 2.5 million pesos attracts around 3,000 pesos a year. Most municipalities offer discounts of 5 to 30% for paying the full year in January.

For scale: property taxes raise about 0.2% of GDP in Mexico, against a Latin American average nearly two points higher and far more in the OECD. If you are arriving from the United States, Canada or the UK, this is the line item that will genuinely surprise you — in your favor.