Mexico’s real estate market avoided the severe crash that took place in the United States and in other countries from 2008 until 2009. Despite this, it did suffer a bit of a slowdown. Investment money ended up drying out, and at the same time, many Americans and other foreigners sold their properties at lower prices in an attempt to cut back on their losses at home.

Thankfully, nowadays, there seems to be a bit of a turnaround thanks to Mexico’s economy now slowly expanding, as well as the hope that recent election results in the country will allow for some sort of stability, with the help of a lawyer from Mexico.

While prices may be going up, analysts say that they are still too low; however, this also means that it’s the perfect time to purchase a home in Mexico, and it’s certainly a cheaper place to live. On top of that, changes in the country’s constitution over the years have made it much easier for foreigners to be able to purchase land. One of the biggest myths is that the government in Mexico can take someone’s land whenever they want; however, this is completely untrue.

However, what has been true since 1995 is that foreigners can purchase and sell property throughout Mexico by way of a Direct Property Deed. This is a title that gives someone direct ownership of a property, and it also means that the land and/or home cannot be taken over by Mexico’s government.

On the other hand, there is a set of rules in regards to property on the country’s coastline and border. For instance, foreigners are allowed to purchase property located within 30 miles of the coast and 60 miles of the border; however, this can only be done through what is referred to as a “fideicomiso.” This is essentially a trust that is established through a local bank which holds the deed for a buyer; however, the bank retains all of the ownership rights to the property. These trusts last for approximately 50 years and can be renewed after this time frame. The property is not considered to be part of the bank’s assets, meaning that the owner will be able to construct, sell, rent, or pass on the property to anyone they wish.

Eminent Domain
The only way Mexico does have the power to take land is through the eminent domain clause of the country’s constitution. However, this clause was modified in 1994 under the North American Fair Trade Agreement, which limits land takeover to a “public purpose.” This means that you must be given a fair value for the property plus interest.

Most transactions for buying and selling land are done with cash; however, financing is available through United States banks and real estate developers, as well as Mexican banks, though they usually charge higher interest rates.

Other than direct purchasing, Mexico also offers real estate investment trusts, with its first one coming back in 2011.

Regardless of the method you choose, purchasing property in Mexico will result in paying taxes in two different countries, including a capital gains tax in the United States if you decide to sell the property and a sales transaction fee that can be 3% to 6% of the total deal. On top of that, there is also the continued threat of drug-related violence that continues to ravage Mexico.