:: Real Estate
How to purchase Real State
Property Taxes, Federal Zone - Beach Taxes, Trust (Fideicomiso)
Taxes & Construction Costs
Villa Rental Projections
Lisa & André Lessard
EMAIL: lessard@tankah.net
CALL: Tel. # 1-541-285-5810
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.: Introduction :.
My name is Lisa Lessard and I am a real estate agent, with almost 20 years
experience selling property in the Riviera Maya. My husband, André and I
own Casa Caribeña, the mango colored villa with the coconut fence in Tankah
Tres. André was the representative for Inland Mortgage Company when they were
operating in the area. I was one of the real estate agents that originally sold
the 56 lots of Tankah Tres in 1987. Wow, how times have changed.
I would love to work with you on finding your perfect spot. I hope that you will
appreciate this information and consider me your real estate agent.
This information is designed to give you all of the facts so that you can make an
intelligent decision as to what property is best for you.
.: How to Purchase Real Estate
There is no financing for foreigners in Mexico. As I mentioned
previously, Andre, was the representative for Irwin Financial/Inland
Mortgage Company when they gave mortgages to Americans and Canadians
purchasing villas and condominiums in this state. Unfortunately, this
was discontinued in 1999. Most people refinance, take a second mortgage
or a home equity loan, with their existing home, to purchase property here.
There are two ways of purchasing property in the "Protected Zone", which is
defined by the prime real estate areas approximately 35 miles inland from the
coasts and approximately 70 miles inland from the boarders. One way, is owning
your property with a Trust or Fideicomiso. We as foreigners can own a certain
amount of prime real estate. That is why they call it the Protected Zone.
The length of the Trust is 50 years. During those 50 years, you are the complete
and sole owner of that property. At the end of the 50 years, you can either renew
the Trust or sell the property at the current market value. The choice is yours.
When you have a Trust, you have an annual Trust fee of approximately $600 USD each year.
This way is for those people who are going to use their property and not rent it when
they are not here. There is no capital gains tax when you sell the property because
it is your personal home and not a business.
The second way of purchasing property in the prime real estate areas is by creating
a Mexican Corporation of which you are the 100% owner. That corporation then purchases
the property. Since it is a Mexican Corporation, there is no need for a Trust or Fideicomiso,
thus no yearly trust tax. This is for those people who are going to rent their property while
they are not using it. When you do sell your property that is purchased with a corporation,
you will have a capital gains tax.
The entire closing is done by a Notary's office. They verify title, make sure there are no
leans or debts or mortgages on the property, handle setting up the Trust with the bank and
all other paperwork for the Trust (Fideicomiso), or create the Mexican Corporation. You, as
the buyer, choose the Notary and are responsible for the closing costs. You will be quoted
the amount of the closing cost, when the Notary is given all the information about the sale,
i.e. Fideicomiso or Corporation, selling price, etc. It is usually around 5% of the amount
you are purchasing the property.
Many times the closing costs will be based on the "Value" that the county places on the
"Predial" which determines what the yearly property taxes are. This "Value", of course,
is MUCH less than the actual sales price. By using this "Predial Value" your closing costs
will be less than if the actual sales price was used. Since closing costs are considerably
much more than they are in the U. S., many people prefer using the "Predial Value" instead
of the sales price. If this is the case, the Notary is not informed of the sales price.
If he is, he will have to use the sales price and not the "Predial Value" and the closing
costs will be based on the sales price. Many "Sellers" will only sell using the "Predial
Value" since they purchased the property this way. Please inquire about this specifically
when you are interested in purchasing a property.
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