While the process of searching for and selecting a property in Mexico is fairly similar to that in the United States and Canada, the process of closing your property and the associated expenditures are somewhat different. It is critical to factor these closing fees in Mexico into your original budget, since they may influence your choice of property.
How much money should I budget?
We normally recommend that you allocate 5-8 percent over the purchase price for closing charges in Mexico, depending on the buying price. Bear in mind that this estimate is subject to change based on the value of your home. They can range from 3% to 20%. Why is the margin so large? Certain closing costs associated with property transfers are based on a percentage of the purchase price.
The remaining closing fees are a fixed fee that is consistent throughout all transactions, regardless of the property’s valuation. For example, municipal filing fees, licenses, and expenditures associated with establishing a bank trust are all flat fees that are not proportional to the property’s value. If the property you are purchasing is affordable, flat rate charges might have a significant impact on the closing costs percentage. If you spend USD 50,000 on a property, the USD 2500 fee for establishing a bank trust will account for 5% of the cost. If your house is worth USD 500,000, the same USD 2500 fee will represent less than.5% of the purchase price.
Costs of Closing in Mexico
What Are the Closing Costs in Mexico?
These expenses should cover the following:
- Acquisition taxes — this is a one-time charge that is not included in your annual property taxes.
- Permission obtained from the Minister of Foreign Affairs
- The initial annual charge should be included in the establishment of a bank trust (fideicomiso) or Mexican corporation.
- The title deed is registered.
- Fees for attorneys
- Notary commissions
- Taxes on real estate prorated
Why are closing costs so high in Mexico?
Property taxes are the primary source of government revenue from property in the United States and Canada. In Mexico, revenue is generated by the exchange or transfer of property. As a result, closing expenses in the United States and Canada are much lower than in Mexico, while property taxes in Mexico are negligible in comparison to their Northern equivalents. The property tax savings will greatly balance the higher closing expenses in Mexico during the property’s life.
Request an estimate!
Your Mexico real estate specialist will be able to estimate closing expenses for you. Consider closing fees in Mexico as part of your budget to guarantee that you can purchase the property. This should be the simple part once you’ve discovered the ideal property!
For additional information, call Homia Real Estate and arrange for a personal tour conducted in the safest manner possible.