Besides a sunny climate, great food and a fun-loving lifestyle, one of the main attractions of property ownership in Mexico is the lower costs involved when compared to the USA, Canada and Europe. Not only will you find that luxury properties with pools and other great amenities are more affordable, you will also find that taxes, housekeeping services, and maintaining your property is much cheaper.
Here are some of the direct and indirect costs involved with property ownership in Mexico that you should consider when purchasing real estate.
The most significant and direct cost involved in property ownership in Mexico is the actual cost of the property you are purchasing, which will vary according to location, size and amenities, just like real estate in any country.
When calculating your overall investment when buying real estate in Mexico, you should take into consideration the cost of lawyers, in particular, notary fees, sales taxes and agency fees.
Mexican Property Taxes
All Mexican property ownership is subject to annual fees called “predial” which you pay at your local mayor’s office. The rates for these property taxes in Mexico differ from state to state but are usually only a few hundred dollar depending on the size and location of your home. Be sure to keep on top of these taxes as in some areas you will not receive a bill.
Fideicomiso – Land Trust
Foreign residents need a special land trust known as Fideicomiso from a bank in order to purchase land that is located within 50 km (30 miles) from the Mexican coast or 100 km (60 miles) from a border. You will be expected to pay an upfront fee and then a yearly payment which can range upwards from around $500 USD depending on your property.
For those opting for property ownership in Mexico within a gated community, as when purchasing a condo, apartment or within a golf or country club, you will need to include the costs of your maintenance fees and HOA’s dues when calculating your yearly costs.
Relative to what people earn on average in Mexico, the cost of services like gas and electricity are high in Mexico although still lower than north of the border. When it comes to electricity, what you should take into consideration is that the more you use, the more expensive each unit of energy becomes, and if you go over your “allowance” then the government subsidy per household is removed and you have to pay the full cost of your electric bill.
Insuring your home
Home insurance is another cost involved in property ownership in Mexico which can cover both the property itself as well as contents. When living by the coast, you should makes sure that your plan covers storms and other phenomenon like flooding.
Have we missed any costs involved in property ownership in Mexico? Add your comments.