Buying a house in Mexico as an American
Buying a house in Mexico as an American is well documented up to the moment the deed is signed and almost undocumented after it. The signature transfers ownership and transfers nothing else: the next morning the cadastral record, the water account, the electricity contract, the property tax band and — if the house will ever be let — the tourism register still carry somebody else's name, somebody else's use and somebody else's calendar, and not one of them moves on its own.
Guides on buying property in Cancún, and on buying property in Cabo San Lucas, end at the notary's desk. So does almost everything written on how to buy property in Cancún or anywhere else on either coast: the transaction is the subject, and by then the transaction is over. This one starts where they stop, because owning a home in Mexico is an administrative relationship rather than an event, and the first thirty days of it set the shape of every month that follows. What is below is the handover as it actually runs on one coast — the one under Los Cabos — with each deadline and each blocking condition quoted from the text that sets it.
What happens the day after the deed is signed?
Legally, very little and all of it elsewhere: the notary carries the instrument towards registration and files his own notice, while the municipal record of the house, the utilities and the tax band stay exactly as the seller left them. Practically, a clock has started that nobody announces, and it is measured in business days rather than months.
The notice the notary files is real and it is not the owner's. In Baja California Sur the obligation is written separately for each side. Public notaries and any other officer with public faith who takes part in a contract transferring or modifying the direct ownership of a property must give notice in writing, on the official forms, dentro de los quince días hábiles siguientes a la fecha de los contratos, disposiciones o convenios en que intervengan, attaching the instrument itself. Two articles later the same law addresses the parties directly, and the wording leaves nobody out: those who enter into any act implying the transfer of ownership of a rural or urban property deberán presentar manifestación ante la Dependencia de Catastro o de la Oficina de Recaudación Municipal correspondiente, dentro de los quince días hábiles siguientes a la celebración del contrato respectivo, with a copy of the contract attached. Two notices, two obligors, one deadline, and the first does not discharge the second.
There is also something that happened at the closing table and is worth understanding after the fact, because it explains what the buyer was handed. A notary who authorises a transfer without proof that the municipal taxes have been paid is not merely in breach: the municipal finance law makes them, alongside treasury staff who issue clearance certificates over unpaid tax, sujetos por deuda ajena y con responsabilidad substituta. That is why the property tax clearance is produced at closing rather than requested afterwards, and it is the one arrear the buyer can be confident did not survive the signature. The utilities, as the next section shows, are the opposite case.
None of which is a description of anybody's transaction. Which notices a particular purchase required, and which of them were filed on the day, is a question for the notary who drew the instrument and the records they hold — this page describes the obligations a house carries, not the history of one house.
Which accounts and services have to change name, and who does it?
Four things change name and one changes silently: the cadastral record, the water account, the electricity contract and, where there is one, the condominium file, each at a different counter and each requiring the new owner to appear with proof of ownership. The fifth, the property tax band, changes by itself according to what the house is used for, which is why it is the one that goes unnoticed for years.
The two utilities are where a purchase most often stalls, and the reason is the same on both sides. The municipal water utility in Los Cabos publishes the list for its cambio de nombre, and it runs to seven lines: a copy of the document proving ownership, a copy of the freedom-from-liens certificate or the latest property tax receipt or an up-to-date statement, current identification of the owners, a letter of authority if the person attending is not the incoming holder, the previous water bill, the articles of incorporation where the holder is a company, and the line that decides everything — Tener sin adeudo la cuenta. The account has to be clear before the name can move, and the balance on it was not run up by the person now standing at the counter.
Electricity works the same way and at a different desk. The national supplier states that to change the name on a contract the holder must attend the nearest customer service centre con la documentación correspondiente (identificación oficial, comprobante de domicilio correcto, documento que acredite propiedad o posesión para cambio de nombre). Both counters ask for the same underlying thing in different words: evidence that this person now owns the house. Both are in person. Neither is triggered by the deed.
| What has to change hands | Who has to move it | What the counter asks for | What stops it |
|---|---|---|---|
| The cadastral record of the property | Whoever entered into the act of transfer, within fifteen business days | A manifestación to the cadastral office or the municipal collection office, with a copy of the contract | Nothing, but the notary's own notice does not discharge it |
| The water account | The new owner, in person at the utility's commercial office | Proof of ownership, freedom from liens or the latest property tax receipt, identification, the previous bill | Any balance the seller left unpaid on the account |
| The electricity supply contract | The new owner, in person at a customer service centre | Official identification, correct proof of address, a document establishing ownership or possession | A service handed over in debt |
| The property tax band | Nobody: it follows the use the house is actually put to | Nothing to apply for, and nothing to sign | Nothing, which is precisely why it is missed |
| The tourism register, where the house will be let | The provider of the service, within thirty calendar days of starting operations | Registration with the Registro Nacional de Turismo | Nothing, and the clock starts at first operations rather than at closing |
The condominium file is the row that varies most and the one no statute can describe, because it is written by the building: the register of owners, the access credentials, the direct debit for the cuota, the contact the administrator calls when something floods at two in the morning. What an administration office actually holds on that side is set out on the page about utilities and building paperwork, and it is the part of the handover that most often stays in the seller's name longest, because nothing bills the new owner until it does.
What does a house need in the first thirty days?
Three filings and one decision: the cadastral notice within fifteen business days, the utility name changes, the tourism registration within thirty calendar days if and when the house starts taking guests, and a settled answer to what the house is going to be used for, because the property tax band follows that answer rather than any form. Everything else — the vendors, the keys, the maintenance calendar — can wait a season without a legal consequence, though not without a practical one.
The cadastral notice is the one with the shortest clock and the widest reach. The same law that sets the fifteen business days for the transfer sets them again for any change to the elements that characterise the property — construction, reconstruction, extension, merger, subdivision or cualquiera otra modificación del dominio de los lotes especificada por esta Ley — and it states the general duty plainly: every owner or possessor of property in the municipalities of the state, or their legal representatives, is obliged to declare it, and those exempt from property tax no se eximen de la obligación anterior. A second home in Mexico that is never let and never altered is still a property with a cadastral record, and the record is the owner's to keep accurate.
The tourism side has its own clock and it does not start at closing. Providers of tourism services, from the moment they begin operations, contarán con un plazo de treinta días naturales para inscribirse al Registro Nacional de Turismo. Read that as written: the thirty days run from the first guest, not from the deed, so a house bought in March and first let in December has its deadline in December. The obligations that follow — the federal tax registration, the fiscal receipts, the state lodging tax, the municipal licence — are set out in one place on the page about obligations and compliance, and their shape is compared with the American reading of the same house in the guide to the short-term rental loophole.
What does an owner who lives abroad have to receive every month?
One document that shows gross, deductions and net for the month, with the receipts behind each line, whether or not the house earned anything. That is the whole of it, and its value is that it can be checked without asking anybody: the total has to be the lines added up.
The reason it matters more from abroad than from the next street is the property tax calendar, which is not annual. In Los Cabos the tax is payable in advance by two-month periods, in the first ten days of los meses de enero, marzo, mayo, julio, septiembre y noviembre, and the same article offers an alternative that only exists if somebody is watching the calendar: taxpayers who pay the year in a single payment during January, February, March or April tendrán derecho a una reducción de hasta el 20 % que autorice el H. Ayuntamiento de Los Cabos del monto total anual del Impuesto. Six payment windows a year, or one, and the difference between them is a diary entry rather than a negotiation.
The rest of what arrives each month is the same for a house standing empty as for a house full of guests, which is the point most often missed by an owner who has just bought. A statement in a month with no income is not a blank page: the water and the electricity were consumed by the maintenance of the building, the vendors attended, the pool ran. What the document contains line by line, and why the arithmetic has to be recomputed from the lines rather than typed as a total, is described on the page about monthly owner reporting, and the work behind those lines is described in the guide to what a property manager does.
What is the restricted zone, and does it change anything after purchase?
The restricted zone is the strip of national territory a hundred kilometres wide along the borders and fifty kilometres deep along the coasts, inside which a foreign buyer holds a residential property through a bank trust rather than in direct ownership. It changes two things after purchase and neither of them is about who owns the house: the trust has a term, and the term is not renewed automatically.
The definition is in the foreign investment law, which names it as la faja del territorio nacional de cien kilómetros a lo largo de las fronteras y de cincuenta a lo largo de las playas, by reference to fraction I of article 27 of the Constitution. Any house on the Los Cabos coast is inside it. Where the buyer is a foreign individual, the trust requires a permit from the foreign ministry for the credit institution to acquire, as trustee, rights over property in the zone cuando el objeto del fideicomiso sea permitir la utilización y el aprovechamiento de tales bienes sin constituir derechos reales sobre ellos. So whether foreigners can own property in Mexico is a question settled before the deed, by an instrument the buyer already holds. What is worth reading after the deed is the two articles that follow it.
The first of the two answers a question most new owners ask within a year, and it answers it in the owner's favour. Utilización y aprovechamiento is defined to mean the rights to use or enjoy the property, incluyendo en su caso, la obtención de frutos, productos y, en general, cualquier rendimiento que resulte de la operación y explotación lucrativa, whether through third parties or through the trustee institution. Letting the house is inside the purpose the trust was permitted for, not outside it. The second article is the one to write down: these trusts run por un periodo máximo de cincuenta años, mismo que podrá prorrogarse a solicitud del interesado, and the foreign ministry may verify at any time that the conditions the permit was granted under are still being met. At the request of the interested party. Nobody sends a reminder for a date fifty years out, and the interested party is the owner.
Which of the annual filings attached to a trust fall to the trustee institution and which fall to the beneficiary, in a particular trust, is set out in that trust's own deed and is a question for the institution that holds it. The structural point is the one above: ownership was settled at the start, the term was not, and the term is the only date in the whole arrangement that expires.
What does nobody tell you before the first rainy season?
That the property tax band moved the day the house stopped being lived in by its owner, and that on this coast the season the house has to be ready for opens on 15 May rather than in the autumn. The first is a rate written into the municipal law; the second is a date published by the hurricane centre, and both arrive without a notice.
The rate is the more surprising of the two, because it is three rates. The municipal finance law sets the property tax at 1.15331 per thousand of cadastral value on property used exclusively as a dwelling siempre que en ella habite el propietario, at 3.0663 per thousand on property put to a use other than the taxpayer's own dwelling, and at 2.2997 per thousand on property destinados al alquiler de casa habitación y a los de uso mixto. Three bands, decided by what the house is used for, with no form to file and no counter to attend. An American owner who bought a house to live in for two months a year and then opened it to guests has changed band, and the cadastral record is the only place that fact is recorded.
The season is the second date, and it is earlier than most owners expect because the coast faces the wrong ocean for the calendar they know. The hurricane centre publishes both: the Atlantic season runs from June 1 to November 30 and peaks around 10 September, while the eastern Pacific hurricane season runs from May 15 to November 30 and peaks in late August. Seventeen days separate the two openings, and a house on the Pacific side of Mexico bought in the spring has less of the year to prepare in than the same house would have had on the Caribbean side — which is a real distinction on a map that also contains Cancún.
What that preparation consists of on a desert coast — salt, hard water, a rotating municipal supply schedule, equipment specified by its distance from the water — is the subject of the page on Los Cabos rather than of this guide, and the calendar that books it into the months the coast measures as empty belongs to preventive maintenance. The point worth carrying out of the first year is narrower: the two dates that govern a house here are set by a law and by an ocean, and neither of them is in the file the buyer was handed at closing.
Can foreigners own property in Mexico?
Within the restricted zone — the strip of national territory a hundred kilometres wide along the borders and fifty kilometres deep along the coasts — a foreign individual holds residential property through a bank trust rather than in direct ownership, under a permit granted to the credit institution acting as trustee. Outside that strip the position is different again, and it turns on a written undertaking filed with the foreign ministry. Either way the question is settled before the deed is signed, by an instrument the buyer already holds when they take possession. What is not settled at that point is the term of the trust, which runs for a maximum of fifty years and may be extended at the request of the interested party.
What has to change name after buying a house in Mexico?
The cadastral record of the property, the water account, the electricity supply contract and, where there is one, the condominium file. Each is a separate counter, each asks the new owner to appear in person with a document establishing ownership, and the two utilities both require the account to be free of debt before the name can move, which means a balance left by the seller has to be resolved first. The property tax band is the exception: nothing is filed and nothing is signed, because it follows the use the house is actually put to.
How long is there to notify the cadastral office of a purchase?
In Baja California Sur, fifteen business days from the date of the contract, and the obligation falls on the people who entered into the act rather than only on the notary. The notary has a parallel obligation on the same fifteen-business-day clock, filed on official forms with the instrument attached, but one notice does not discharge the other. The same fifteen days apply again to any later change to the property, and — under the second paragraph of the same article — to the owner on the day the house is given over on a lease.
Does letting the house affect the property tax in Los Cabos?
It changes the band. The municipal finance law sets one rate for property used exclusively as a dwelling where the owner lives in it, a higher one for property put to a use other than the taxpayer's own dwelling, and a third for property destined to residential letting or to mixed use. No application is made and no notice is issued: the rate follows the use, which is why an owner who starts taking guests can be in a different band without having done anything that felt like a filing. What band a particular property falls into in a particular year is determined by the municipal cadastral office on that property's record.