Capital gains tax (Impuesto Sobre la Renta) is calculated at either 25% of the total declared sale price or up to 35% of the net profit (sale price minus your legally documented capital improvements, original purchase price, and closing fees). Read about capital gains taxes in Mexico here: Capital Gains Taxes
Annual property taxes (predial) are remarkably inexpensive compared to North America. They are based on the municipal assessed value of the property and are typically less than 0.1% of the asset’s real value. Additionally, the government offers a 10% to 20% discount if paid early in January or February. Read about Property Taxes here: Property Taxes
The ISABI is a localized property transfer tax levied by the municipality on the buyer when real estate changes hands. In Baja California Sur, it is established at a standard 3% of the declared purchase value and is paid as part of your closing costs. Read about property acquisition tax here: Closing Costs
Yes. Modern transactions safely utilize specialized, US-style third-party escrow companies (such as Armor or Settlement Company). Your earnest money and final balance deposits are held securely in a protected, neutral US-based account and are only disbursed to the seller at the exact moment the final deed is signed before the Notario. Read about Escrow Accounts here: Closing Costs
Closing costs typically average between 4% and 6% of the purchase price. This amount encompasses the 3% Property Acquisition Tax (ISABI), Notario fees, Public Registry registration fees, bank trust setup charges, and mandatory foreign affairs permit fees. Read about closing costs here: Closing Costs
When your Fideicomiso is established, you explicitly name substitute beneficiaries directly within the trust document. In the event of your passing, the property ownership automatically transfers to your designated heirs without going through a complicated, costly, or lengthy Mexican probate court process. Read about beneficiaries here: The Fideicomiso
The trust is completely secure and can be renewed indefinitely for additional 50-year terms. It is not an “expiration” where you lose the property; rather, it is a simple administrative renewal process that extends your legal protections under the trust framework. Read about the trust here: Property Ownership in Mexico
Yes, title insurance is available through major international underwriters. While a rigorous due diligence process and a certified Notario Público ensure a secure closing, there is almost no need to acquire title insurance. Speak to your real estate agent to determine if title insurance is required.
A Mexican Notario Público holds a much higher level of legal authority than a traditional notary in the US or Canada. Appointed directly by the state governor, they act as an impartial legal official who reviews all deeds, guarantees title clarity, verifies legal descriptions, calculates and collects transaction taxes, and officially records the final transfer of ownership in the Public Registry. Read about the Notario here: Purchase Process
For personal residential properties and vacation rentals, a Fideicomiso is almost always the preferred route due to its lower setup and maintenance costs, straightforward tax framework, and seamless inheritance benefits. A Mexican Corporation is typically reserved for buyers purchasing commercial property, large tracts of raw land, or individuals looking to operate a high-volume, multi-property real estate business. Read about types of ownership here: Property Ownership in Mexico