Since 1974 foreigners (non-Mexicans) have been able to purchase property within the coastal and border areas through a “Fideicomiso Contract” or “Bank Trust”, established with a Mexican bank. Foreigners may directly own rural or urban land in the interior of Mexico with certain limitations on specific agricultural tracts. Learn 3 important things you need to know about owning property in Puerto Vallarta.
Bank Trust Ownership
The Bank Trust is established through a Mexican bank assuring foreign buyers of all the rights and privileges of ownership. As of 1994, the Foreign Investment Law allows these deeds to be established for a term of 50 years and to be renewable upon termination. This process protects the rights of foreigners and makes sure that the transaction is legal and unencumbered. For more than 35 years, many thousands of American and Canadian citizens have used the Bank Trust ownership system in Puerto Vallarta and throughout Mexico’s resort destinations. The Bank Trust Fees are to be paid on an annual basis on the anniversary date of possession. Prices varies between $450 to $650 USD.
Taxes Owining Property in Puerto Vallarta
Property taxes have been low and remain low in Puerto Vallarta. Known as ‘Predial’ – yearly property tax – the mil rate is .08% of the assessed value of the property, determined at the time of sale. This tax is paid yearly in January or February to receive a 15% discount. Property taxes have historically been low in Mexico because they have never been considered a major source of governmental revenue. This tax law may change in the future.
Puerto Vallarta is closer than you think.
The Closing Process
The closing process generally takes between 30-45 days (depending on the buyer and seller), with paperwork and escrow processes coordinated through our Escrow Department in coordination and close communication with a local public notary (Notario Publico). Closing costs (approximately 5.0-5.5% of the total purchase price) are paid by the buyer, with the seller paying the applicable capital gains tax and the real estate fees (which are 100% deductible against the capital gains tax). Depending on each individual transaction, the buyer and seller may or may not need to be present at the closing. This would be determined by the Notario Publico and your NUHome Mexico sales professional will inform you in a timely fashion so you can be prepared. Power of Attorney can be used in any transaction. Our Escrow Department will inform you of what will be necessary for your particular transaction. Our job is to simplify the process and to ensure that each and every transaction takes place with the least amount of inconvenience.