How to buy a house in Mexico?

Question

Hey there. My brother is interested in the best way how to buy a house in Mexico. He and his girlfriend (she is Mexican) want to emigrate to Mexico in a few years (not more than three, he says). Probably he will marry her before then. For this reason, immigration formalities are not important. The real question is how he will buy a house in Mexico with the capital of around 150.000 Dollars saved up. Is it best to do it from here through an estate agent (which might be very expensive…there is apparently only luxury estate agents on the internet) or can you take the money to Mexico legally without big losses/expenses (transfer it to a Mexican account) and then buy the house there? In Mexico houses are rather cheap.... Anyone with any experiences and tips? Thanks in advance for the answers!! :-)

Mike Lambert · Answer

@Luis Guerrero

In Mexico, you either pay 25% of the declared value of the property or 35% of the net profit. The net profit is the difference between the assessed values at purchase and sale, taking into account any miscellaneous contributions over the course of ownership.

Then, you'll have to pay the US capital gains tax, against which you can credit the tax paid in Mexico. Just make sure that it's still covered by the latest version of the US - Mexico tax treaty for the avoidance of double taxation.

Of course, you might want to get everything confirmed with tax professionals.

Luis Guerrero · Answer

@Mike Lambert . Hello there. Would you be able to tell me what the capital gains tax in 8in Mexico? I recently came across the opportunity to purchase some bank owned properties in Guadalajara. I'm considering buying to flip. Thank you

Darius Ogloza · Answer

A friend of mine just closed a deal in Ajijic. Pretty much a snap.

Mike Lambert · Answer

@Luke Thory

You can invest in Mexico through a good Mexican real estate agent to buy any kind of properties and there are no issues in opening a bank account in Mexico and wiring money there.

If you buy a property in USD, there shouldn't be large fees taken by the banks when you do the transfer. However, if you buy a property in Mexican pesos, you might be better of using a foreign exchange company for the currency conversion as the banks will charge you a hefty fee.

Luke Thory · Answer

My brother has now seen a few properties and one which he liked quite well. He will probably buy it. Me and my wife prefer to save the money and then invest in something that we like and where we feel comfortable as well… my brother’s property won’t be big enough for two families…

Luke Thory · Answer

Hey guys, thanks for the answers! I'm also thinking about investing in the house...so my brother can get a bigger house and we can go on holiday there and have enough space...Is it better to buy a bigger house right away? So that it is more profitable?

Mike Lambert, thank you for the explanations. I never thought that you could pay in USD actually…that wouldn't be such a bad way to get around the bank fees, right? And yes, a foreign exchange company would certainly be better for currency conversion than the banks...it's only when you're paying such large sums that you feel a little insecure, isn't it? It is much safer to exchange your money in a bank…at least I feel so…

Darius Ogloza, oh great to hear! I do not know Ajijic at all. The photos on Google look really nice. Is it touristic there? If not, maybe that explains the good deal? My brother would like to buy a house in Puerto Vallarta...I am also not against to invest in a house near the sea ;-)

How to buy a house in Mexico?

How to buy a house in Mexico?

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