rise of burrito bars and Mexican street food restaurants springing up
around the UK shows that Mexican culture away from the traditional
images of tequila and huge hats is beginning to win the hearts and minds
of the British public.
And while we may still lagging behind our North American counterparts
in snapping up Mexican property, a small and adventurous band of Brits
are beginning to discover the diverse delights that Mexico has to offer.
Moving to Mexico means a great quality of life. The country’s economy,
currently ranked 14th in the world, is booming with 700,000 new jobs
created in 2010 alone. And the good news is that this economic surge has
not been met with increased costs of living for residents and visitors.
It is possible to live an extremely comfortable lifestyle for just £200
For those thinking of moving full time, Mexico is also famed for its
excellent medical facilities. Becoming a resident (which you can do
after purchasing land) enables entry into the National Health Care Plan
which offers 100% cover for around £160 a year and access to the
country’s first rate hospitals. And then there’s the warm weather. The
Mexican Caribbean (Costa Maya) is 28 degrees year round and the rest of
the country stays warm across the seasons.
Los Cabos – One of Mexico’s most popular areas for investment,
tourism, and relocation, Los Cabos is starting to see huge swathes of
development and is already home to some of Mexico’s most prime luxury
properties. The area’s popularity means that buyers will never be short
of things to do, with a wealth of leisure and entertainment options
available. While prices are rising in the area, you can still get a
luxury townhouse, with access to golf courses and 24 hour security,
starting from around £350,000. However, big spenders have the potential
to spend £2 million on something really stunning.
Lake Chapala –
An area that is growing in popularity with expat Brits, Lake Chapala
offers one of the finest climates in the world and stunning scenery
courtesy of the impressive 55 mile body of water. A nearby international
airport at Guadalajara is only twenty minutes away, making access easy
for holidaying Brits or visiting relatives. Here, it is possible to buy
a three bedroom villa within a semi gated community with access to a
shared pool for £200,000.
Cancun – One of Mexico’s most international destinations,
Cancun is popular with visitors from across the world in part due to its
well connected airport Cancun International, which is Mexico’s biggest
for international travellers and operates direct flights to and from
London Gatwick, Glasgow International, Belfast International and East
Midlands among others. Property in Cancun is, as a result, relatively
high in price and more generous in rental yields. A 275sqm condo can be
yours for around £700,000 while a smaller but still not unsubstantial
property of around 275sqm would set you round about £460,000. The
future is also looking bright for the area- modern beachfront hotels are
beginning to attract increasing numbers of visitors to the area, which
means even greater development.
The Mexican system of buying a property follows the Spanish notarial
system with a notary acting for both the buyer and the seller. After the
offer on a property has been accepted it is the notario’s job to
organise the surveys, transfer of deeds, and to register the property
with the relevant local authorities. Prior to this happening though, the
buyer and seller will sign a promissory contract and a deposit of
around 5-10% will be taken from the buyer.
One slight complication is the fact that the Mexican constitution
prohibits direct ownership by foreigners of property within a
“restricted zone”, which includes any land within 100km of Mexico’s
borders (with the USA, Belize and Guatemala) and within 50km of its
However, there are ways to get around this law. Having realised the
implications on overseas buyers investing in the country, the Mexican
government introduced a form of trust scheme in 1994 which enables a
bank (ie the mortgage lender) to own the title to the property,
nominating the buyer as a beneficiary (meaning they have full ownership
rights). Known as a fideicomiso, this is easily renewable and available
in 50-year intervals.
There is no legal requirement to appoint a lawyer in Mexico, although this is highly recommended.
In total the cost of buying a home in Mexico will come to around
eight per cent of the purchase price which includes forming the trust
which your property is held in, estate agents fees and costs including
notary fees and expenses and transfer taxes.
The cost of setting up the fideicomiso involves a one-off fee of
£1,600, plus an annual fee for the trust based on the value of the
property. In addition to this yearly charge, you will also need to pay
0.25 property tax per annum.
There is no VAT payable on residential property, but you will be
charged 33 per cent capital gains tax on the rise in value of your
property when you come to sell. The good news is that Mexico operates a
double taxation treaty with the UK meaning that you will not be taxed
twice on any profit you make.
A consideration that potential buyers in Mexico must be aware of is
the high cost of securing a mortgage in Mexico compared with the UK.
Interest rates are currently around 14 per cent, and banks will require a
deposit of between 30 and 40 per cent. It is also hard to secure
funding through US lenders as many will only lend according to equity
you have built up in the States. The best way to finance your property
if you’re not buying with cash is to remortgage in the UK, which will
enable you to avoid the high interest fees.
Another thing to note is the fact that estate agents in Mexico are
not licensed or regulated in any way. Make sure you shop around to
ensure you are dealing with someone reputable and that they are offering
you value for money.