Baja, Mexico Home Buyer's Guide

Most buyers use a real estate escrow specialist or attorney due to language barriers, multiple trips to La Paz, and legal complexities.
Closing fees vary based on transaction value and services such as subdivisions, surveys, or water contracts.
Improper titling can lead to unnecessary tax obligations, particularly with fluctuating peso values.
Example: A seller handling their own closing failed to file key tax documents, resulting in significant capital gains taxes.

Foreigners typically purchase residential property through a 50-year fideicomiso trust, which:
- It is not a lease and does not revert to the original owner.
- Allows the owner to sell, rent, and pass the property to heirs.
- Can be renewed after 50 years and again for another 50 years.
Trust costs include:
- Permit from the Secretary of Foreign Affairs.
- National Registry recording fees.
- First-year trust administration and bank acceptance fees.
- 16% IVA tax.
Annual trust fees vary, so compare bank rates before selecting one.
Closing costs include:
- 2% transfer tax (based on purchase price).
- Title search, appraisal fees, tax certificate, and notary fees.
- Additional optional costs: Engineering reports, title insurance, subdivision, and surveys, home inspections.
Multiple lots in one fideicomiso? Possible, but each requires its own permit and incurs separate closing costs. Bundling can save 15-20%.
Higher property values result in higher transfer taxes, notary fees, and appraisal costs.
Closing costs are usually higher in Los Cabos than in Todos Santos or La Paz. Expect to pay approximately 8-10% in closing cost, this includes most of the above mentioned costs.

Properties over 2,000 m² (half an acre) require an investment clause, mandating a minimum investment within 24 months.
Minimum investment starts at $250,000 USD and increases based on size and location.
Investment costs include land, construction, landscaping, utilities, and furnishings— no receipts required.

Required for commercial properties and large land purchases.
A foreign-owned Mexican corporation can hold fee-simple title, but it cannot be used for a personal residence.
Cost to establish a corporation: Approximately $2,500 USD, including legal fees, permits, and licenses.
Additional requirements:
- Standard closing costs and transfer taxes apply.
- A corporate administrator must obtain proper immigration and tax ID documents.
- Plan on being in Mexico for 2-3 weeks for necessary filings.

Available through Fidelity Title Insurance and Stewart Title.
Requires a full title report (~$900 USD) from an authorized Mexican title company.
Cost: $7-$8 per $1,000 USD property value.
- Example: A $100,000 property = $700-$800 for title insurance.

Residential Areas: Apply for service contracts once the property deed/fideicomiso is issued.
- Electricity: Costs depend on the distance to the nearest power pole.
- Water: Options include wells, cisterns, or irrigation canals, trucked.
- Internet: Starlink offers the most reliable high-speed service.
Rural Properties: Owners often use solar power and satellite internet.

A tourist visa allows 3-month stays.
If planning extended stays, consider:
- Temporary or Permanent Residency.
- Local immigration specialists can assist with applications (2-3 weeks processing time).

Do not attempt to bypass legal ownership structures (e.g., placing property in a Mexican friend’s name or using a power of attorney).
Properly structuring your purchase through a fideicomiso or corporation ensures security and legal protection.

Buyer's Guide