What should you do when considering a purchase on Isla Mujeres Mexico?
Perhaps the most important thing is to identify the suitable property. We help you by objectively evaluating the various choices on Isla Mujeres...hoping to take some of the emotion out of the process! Mortgages are not typically available so "proof of funds" will be required.
After you make the decision to buy, an offer sheet is submitted to the Seller. If these general terms are acceptable then depending on the type of property a promise of sale agreement is drawn up between buyer and seller. An attorney of your choice is consulted. A deposit is made.
Depending on the property type a refundable deposit of 5% to 30% is customary. During this time period the Bank Trust is opened, the public registry is checked for liens and clear title. A first-class public notary agreed upon by your attorney should take charge. The notary confirms everything is in order for a legal transfer of title. If everything is clear, the sale takes effect. We co-ordinate and assist in all aspects.
Can foreigners own property in Isla Mujeres ?
Yes, the Constitution allows ownership by foreigners inside thirty-one miles from the sea or sixty-two point five miles from the borders through a bank trust. In this type of purchase, a bank is the trustee of the real estate. The beneficiary, has all the rights to use, enjoy, rent, sell, or mortgage(all the rights of fee-simple ownership) The Trust is considered the owner. The trust is established for fifty years and can be extended for additional 50 year periods. Consult an attorney to advise on the best form of ownership for you as in limited cases a Mexican corporation may be an option.
Are the permits required hard to get?
No. Along with your attorney we take care of this process. Remember, be patient we are dealing with a tremendous bureaucracy.
What happens if a foreigner decides to sell after some time?
He may do so at any time, and he should profit by the increasing value of the property over that period. There is a capital gains tax in Mexico. Consult an attorney for tax information.
What happens if the beneficiary dies?
At the time the trust is set up, a substitute beneficiary is named. This person has the same rights as the first beneficiary. No Will is needed to be probated in this case.
How is a trust set up between the bank and buyer?
The trust agreement is drawn up before a public notary. The Ministry of Foreign Affairs and the Commission on Foreign Investments must approve the operation first. This requires a payment of ~2000 USD and must be paid soon upon signing of the Promise of Sale agreement. The participants in the transaction are the seller who must have clear title to property with no liens or mortgages on the property, the bank as the trustee, and the buyer or beneficiary . If a property is currently owned in trust then that trust can often be transfered for a lesser fee.
How much are the Buyer's expenses and closing costs?
There are expenses for the authorization from the Ministry of Foreign Affairs, (Ministry of Foreign Affairs Permit) ~$2000 USD , and the fees of the public notary of ~1.5% including Transfer tax of currently 3%, deed registration at the Public Registry of 1% . You will also incur additional Attorney fees(typically $1500-$3000), these will vary depending on the complexity of the transaction. The total expenses for many transactions should be between 6 and 6.5 %.
What are the Annual expenses of the beneficiary?
He must pay the annual trust fees ($600-$1000) Also, he must pay property taxes, water, and other utility bills when due. Property taxes are typically very low. A good estimate is .00333% of registered purchase price?..~$1000 on a $300,000 purchase.
**The above FAQs are for informational purposes only. For precise information regarding your purchase an attorney licensed in Mexico should be consulted. We have developed a list of attorneys experienced in real estate.