What To Consider When Buying A Home In Mexico

More than ever, U.S. citizens are fleeing increasingly expensive American cities for the relatively cheap landscape south of the border. What makes Mexico such an appealing place to live? When comparing prices of homes and cost of living, Mexico is significantly cheaper. Still, buying a home abroad is not for everyone, no matter how low of a price. Anyone interested in buying a home in Mexico should research and review what they will need, as well as whether it will be the right fit for him.

Who Are Buying Homes In Mexico?

Around 1.5 million Americans already own homes or Mexican real estate, while the U.S. State Department approximates that 385,000 Americans are living permanently in Mexico, nearly twice the number compared to a decade ago. Many of these properties are attractive to young telecommuters and retirees on fixed incomes. In fact, Mexico is now the number one retirement destination for Americans, according to the 2007 Global Retirement Index.

Why Buy A Home In Mexico?

Mexico has extremely varied terrain. Finding a home that matches your preference is easy, whether you enjoy pristine beaches, stark desert beauty or scenic mountains. The climate conditions in many areas of Mexico are also ideal for living. The most popular properties are waterfront resorts in places like Sonora, Puerto Vallarta and the Baja Peninsula.

The biggest draw for buying a home in Mexico is the affordable cost of living. The infrastructure has improved immensely over the last decade, including more places with high-speed Internet for telecommuting. Health and tax benefits, along with the close U.S. proximity, make living in Mexico a reasonably priced reality.

Things To Consider When Buying A Home In Mexico

Like any real estate purchase, there are always some risks involved. Buying property in another country poses an entirely new set of challenges. Even though homes in Mexico are not as expensive, there are still hidden costs that any interested buyer needs to factor into the total.

Acquisition fees are six percent and include mandatory real estate transfer tax and bank appraisal fee. Moreover, Mexican property taxes are lower, but capital gains taxes on the sale of property can reach up to 35 percent. Make sure there is enough money to buy a second home before considering Mexico real estate.

Other risks with buying Mexican homes stem from legal issues. Mexican law states that foreigners cannot own real estate within 100 km (62 mi) of a border or within 50 km (31 mi) of any coastline. Of course, this is where most people want to buy property, so the government lets foreigners buy land and homes through bank trusts, which means that the bank holds the title of the property, not the homeowner. It is crucial that interested buyers obtain title insurance. If the property does not offer it, walk away from the deal. Buying a home in Mexico can be an exciting venture as long as the buyer is fully prepared.