Things to Consider when buying property in Puerto Vallarta

Wed. Nov/8th/2017.

It is a common misconception that foreigners cannot own Real Estate in Mexico, but the reality is that they can. Outside the restricted zone, defined below, a foreigner or foreign corporation can acquire any type of Real Estate, holding the property as a direct owner complying with Mexican Law.

However, there is the Restricted Zone. The Mexican Constitution regulates ownership of the land and establishes that "In a zone of 100 kilometers (about 62 miles) along the border or 50 kilometers (about 31 miles) along the coast, a foreigner cannot adquire the direct ownership of the land". These areas are known as the "Restricted or Prohibited Zones".

If you're interested in buying a piece of Puerto Vallarta real estate property, the options are plenty, from houses to condominiums to apartments to resorts villas and more. Here are five things to consider when buying a property in Puerto Vallarta.

1. It is essential to choose a reputable and experienced real estate agent.

Do your research! How long have they been an agent? Do ther have references? Can they clearly explain the puchasing process to you? Are ther showing you properties outside of their own listings?

You are the boss. Don't let an agent force your hand. And remember, if a deal sounds too good to be true, it probably is.

2. You Will be using a Public Notary for the entire transaction.

Your real estate agent will make a recommendation, but you can do some background research on your notary as well. The Notary is a Mexican goverment appointed lawyer and is essential in the process of purchasing a property. They will draw up, review and certify all documents. Too, they will make sure that the transfer of the property is legal.

3. Are all of the official documents in order?

Be sure that your Notary and real estate agent have the following documents in order:

• A copy of the seller's title. The seller has to provide the original title on the day of closing
• A copy of the registration of the property in the public register
• A copy of Regimen of Condominium (for a purchase of a condo).
• A Non-Lien Certificate obtained via a property title search from the Public Property Registry.
• Ensure that there are no utility bills outstanding.
• Ensure that the yearly property tax (Predial) is up to date
• Have an appraisal of the property done for tax purposes

4. Get an estimate of all of the closing costs.

Have your real estate agent and notary provide you with a complete estimate of closing cost expenses, wich will include:

• Property transfer tax
• Foreign affairs permit
• Opening of the bank trust (Fidei Comiso)
• Bank trust fees for the first year
• Notary fees and expenses

5. Foreigners must establish a Fidei Comiso (bank trust) when purchasing property in the restricted zones of Mexico.

The restricted zones are within 100km (62 miles) from an international border and 50km (31 miles) from the coastline. The buyer is the beneficiary of the title, with a Mexican bank as the trustee. The buyer is the beneficiary of the title, with a Mexican bank as the trustee. The beneficiary can sell and rent the property or transfert the rights to a third party or the heirs. The trust can be renewed every 50 years.

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