Can Foreigners Own Property at Lake Chapala Ajijic Mexico ?
August 15, 2008
Can Foreigners Own Property at Lake Chapala Ajijic ?
Absolutely! Even as a tourist, you may buy real estate in Mexico. With proper advice, it is safe and easy. Foreigners who buy real estate in Mexico, have the full protection of the Mexican law.
In the interior of Mexico, where Lake Chapala and Ajijic are located foreigners can obtain direct ownership of property and have their own name on the deed, and can even name beneficiaries in the deed itself.
On the coast, and close to the borders, (in what is called the ‘restricted zone’), foreigners can still buy property, but must set up a bank trust (or Fideicomiso). All real estate transactions involving a trust are governed by federal law. A Mexican Bank in these areas hold legal title in behalf of the Beneficiary of the trust. There are yearly bank fees associated with this arrangement.
Mexican Notary Public
All valid land transfers are handled by a Mexican Notario. In Mexico, most legal documents must be made before a Notario Publico. The Notario Publico is a public official appointed by the State Governor (he has a higher standing than an attorney/lawyer). He is legally responsible that everything is in order in property sales. I can introduce you to the recommended Notario Publico in our area.
Some interesting facts
Much of the real estate bought and sopld at Lake Chapala Ajijic is between foreigners and most of the prices are in US Dollars. A typical transaction would be for the buyer to wire transfer the initial payment of usually 10% of the purchase price to the USA bank of the Real Estate firm handling the transaction which is acting as the escrow agent for the sale.
Then about a week before closing in the Notario’s office the remaining purchase funds and closing costs are likewise wire transferred to the Real Estate Broker’s USA bank.
Then at closing the funds are wired to the USA or Canadian Bank account of the seller. So, more often than not the funds never are in the Mexican Banking System.
Sometimes of course the funds are transferred to sellers who prefer to have the proceeds deposited into their Mexican Bank or Banks in other countries depending upon just what country they bank in.
Closing costs are paid by the buyer and as a rule of thumb typically run between 3 and 4 % of the sales price of the property, but are not actually based on the sales price.