Vacation Rentals Listed by Owner in San Miguel de Allende
Frequently Asked Questions about Buying and Selling Real Estate in San Miguel de Allende, Mexico
"Mexico is very protective of its land, and rightly so. Mexico has a long history of being dominated by foreign owners. This brief history of Mexico will show why Mexico covets one of its greatest resources: its land.
As early as the 16th century, other countries were already trying to claim Mexico’s land as their own. In 1517, Hernandez de Cordoba sailed to the Yucatan Peninsula from Spain, and laid claim to Mexican lands. Mexico did not declare its independence from Spain until over 300 years later in 1822. Although they had independence, most Mexico land was still owned by the Mexican upper class, wealthy foreigners, or the Church.
After the Mexican Revolution, a new Federal Constitution was written in 1917. This new constitution regulated foreign ownership and ownership of lands by the Catholic Church. Article 27 of the constitution restricts foreigners from owning land within a “restricted zone” of 60 miles from the Mexican border or 30 miles from any Mexican coastline.
In the 1930’s, the Mexican people finally started to see their land being returned to them. Large property holdings were disassembled and redistributed in the form of cooperative farms or “Ejidos.” The people were given ownership of the Ejidos, and allowed to profit from farming and cultivating them. However, the government still owned the Ejidos. Though the people were allowed to farm the properties and profit from their work, it was not until 1992 that they were allowed to sell the properties. The 1992 Agrarian Law recognized property rights within the Ejido and allowed for the owner of record to sell or lease the property to a non-Ejido member. The property can be removed from Federal Control and placed in the public land registry allowing it to be sold or leased. Today, thousands of acres are being removed on a daily basis from the Ejidos, added to the public lands and being sold or leased. There are well over 50 million acres of land that will go through this process to be either leased or sold over the coming years."
"Mexican Law provides for private ownership of land by foreigners, and its law is very specific about the way in which land rights should be transferred from seller to buyer, and also what type of lands are not eligible for public ownership. A Notary Public, or Notario (see below) will guide you through the details of these, but generally:
1. Property may be purchased and owned outright for residential use by foreign nationals outside of the 100km restricted land border zone, or outside of the 50km coastal zone;
2. Inside of the restricted border/coastal zones, foreign nationals may own land through a fidecomiso (a trust) which is set up through a bank and provides for ownership of the land and property in all but name. The Mexican Constitution previously banned foreign nationals from owning property that was within the restricted border zones. This old law was intended to protect Mexican soil from foreign invasion."
"When you buy real estate in San Miguel de Alende, you would do well to consider taking out Title Insurance on the property.
There are five different types of property in San Miguel: Federal, Restricted, Unrestricted and Historic.
Title Insurance covers you should the property you buy subsequently turn out to have liens associated with it. Title Insurance will protect you if any other previously unforeseen lien or charge is brought against the property before you took possession of the Title Deed. Consult a real estate agent or Notario in regard to matters relating to Title Insurance."
"When you search for a real estate professional who can help you find your ideal home or investment property in San Miguel, you need to find an agent who has an excellent understanding of the local area you are buying in. Good to keep in mind, Mexico does not regulate real estate transactions and real estate agents are not legally licensed in Mexico.
The agent should, ideally, have several years of experience living and working in the area. They should have an in-depth understanding of the locality and its neighborhoods and ideally should also own a home in the area, too. A well-established local agent can give you insights into the city of San Miguel de Allende, the various areas and neighborhoods, history and future local initiatives and projects that are coming down the line. A good agent will also give you forthright insights about local issues—past or present—that may exist in regard to purchasing property in any given area you're considering. Local agents are also well placed to share information about market prices and current market conditions. The last item is particularly relevant as real estate markets in Mexico are very localized and historical price data are hard to come by.
Agents in San Miguel do not charge buyers, but do charge sellers a percentage of the selling price. These fees and charges vary and will be higher than what you may expect if your only experience is that of the US, Canadian or Western European real estate markets.
In recent years, Mexico's estate agency networks have evolved considerably into professional organizations offering full-service agency facilities, including some with regional connections to find opportunities beyond their immediate markets. Recently formed organizations in San Miguel, such as AMPI, the Mexican Association of Professional Realtors, and NAT, the National Association of Realtors, require certification of their members, and thus bring a level of credibility expected of a professiional realtor. This said, real estate remains very much a "local" business in Mexico, and making contact with a good, experienced and local realty agent can make all the difference in your search for your ideal property.
Aim to find an agent with whom you may build a rapport and even a long term relationship as, one day, you may want to rent out or sell your property—or help friends or family to buy locally—and having made a good contact, you can enjoy a solid anchor that will serve you well in years to come."
"Under Mexican Law, the deed to the property must be prepared by a Notary Public. As a buyer, it is your right to choose the Notary Public, and you should discuss with your Notary all issues involved with a property prior to making any committments. The Notary Public will ensure that all documentation and permits are in order so that the transaction can proceed.
The Notary Public and/or your lawyer will do a series of checks on the property and ensure that the property has a clean history, and that there are no liens on the land (i.e. an old unpaid mortgage). Under Mexican Law, liens are passed on with title of the land - BEWARE!
Your Notary Public should also check that all land taxes have been paid during the last five years (if applicable) and that utilities (electric, gas, water and phone) have also been paid during the last two years. By law, you are not liable to debts after these times.
Other items to be checked include: checking all buildings are on tax registers and have the required building permits; utilities were legally installed and payments are up-to-date; the property is not jointly owned, or if it is, that both (or all) owners agree to the sale; and that the seller(s) has the right to sell.
The Notary Public is legally responsible to ensure that all documents are in order and that all legal procedures have been adhered to. He will do a thorough check and will not destroy his reputation by hiding any problems, or potential problems from you."
"1. Find a property you like; agree a price verbally;
2. An agreement to sell/buy, with detailed costs, inclusions and exclusions, as well as deadlines, is set out in an initial "Convenio de Compra/Venta" (sale agreement), at which point a deposit (5-10%) is paid by the buyer and cancellation penalties are set (usually equal to the deposit) if either party pulls-out;
3. If you are buying from a real estate developer, advise the Notary Public who will ensure the developer's permits are in order;
4. Get a copy of the Land / Property Deeds from the seller. The Notary Public will check these out.
5. An official appraisal of the Land (Avaluo) needs to be carried out; your Notary Public can arrange this.
6. Your Notary Public (or lawyer) will ask for official documents that can include (but are not limited to): Photo ID (passport), Birth Certificates, Marriage Certificates (if appropriate), and your visa (could be a Tourist Permit) to prove that your stay in Mexico is legal;
7. The seller will need to present to the Notary Public documents including (but not limited to): original property deed, up-to-date tax receipts for the property, public utilities bills (shown as paid), plus up-to-date details of land-service fees (shown as paid);
8. Capital Gains Tax is paid by the seller, unless you have agreed to pay CGT as part of the buying agreement. The Notary Public will state how much this is;
9. Payment is made (see note below) at the time when the deed is signed over to you, and this is done at the Notary Public's office;
The Notary Public's and Solicitors (if applicable) fees are paid at this time as well, as well as other taxes associated with land purchase (see Taxes, below).
10. Payment: Whether you are paying with cash or via some kind of financing, you will need to have the agreed funds available for hand-over at the Notary Public's office on the date the deeds are signed across to you."