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transactional costs

Total transaction costs, ranging from low to high for Mexico

*Estimates based on typical fees charged in 2019

 

Total Transaction Costs

Who Pays?

Acquisition Tax

0.18% – 4.565%

buyer

Notary Fee

0.075% – 1.125%

buyer

Registration Fee

0.02% – 1.82%

buyer

Other fees

0.50% – 1.00%

buyer

Title Insurance

0.50% – 0.70%

buyer

Real Estate Agent´s fee

6% – 8% (+ 16% VAT)

seller

Costs paid by buyer

3.13% – 6.69%

Costs paid by seller

5.48% – 8.96%

ROUNDTRIP TRANSACTION COSTS

6.61% – 13.65%

*Some additional details and explainations below.

 

ACQUISITION TAX

VALUE OF THE PROPERTY (MXN)

TAX (MXN)

Up to 87,159.70 (US$4,587)

MXN152.31 (US$8.70)

87,159.70 – 139,455.47 (US$7,340)

0.03163%

139,455.47 – 209,183.01 (US$11,010)

0.03261%

209,183.01 – 418,366.13 (US$22,019)

0.03261%

418,366.13 – 1,045,915.32 (US$55,048)    

0.03696%

1,045,915.32 – 2,091,830.65 (US$110,096)

0.04565%

Over 2,091,830.65 (US$110,096)    

0.04565%

Notary Fee

Services of a notary public (notario publico) are required in a real estate transaction. Based on the law, the Notary Public must ensure that all documents are in order and that all legal procedures have been adhered to. Notary fees are set by the federal district.

NOTARY FEE

VALUE OF THE PROPERTY (MXN)TAX (MXN)
Up to 132,791 (US$6,989)    MXN4,829 (US$254)
132,791 – 265,584 (US$13,978)1.125%
265,584 – 531,168 (US$27,956)0.975%
531,168 – 1,062,333 (US$55,912)   0.825%
1,062,333 – 2,124,670 (US$111,825)0.675%
2,124,670 – 4,249,340 (US$223,650)0.525%
4,249,340 – 8,498,680 (US$447,299)0.375%
8,498,680 – 16,997,358 (US$894,598)0.225%
Over 16,997,358 (US$894,598)0.075%

Notary Publics are not simply lawyers that “notarize” documents, they must: (1) be at least 35 years old; (2) have a degree in Law; (3) have sufficient experience; and (4) pass an exam before they can be appointed by the State Governor.

 

Registration Fee

Registration fee is paid to Local Public Registration Office by the buyer. The cost varies by state and can be a fixed fee, a progressive rate or o combination of the two. Total registration fee ranges from 0.02% (Michoacan) to 1.82% (Durango) of property value.

Other Fees

Foreign buyers should allot additional 0.5% to 1% for setting up a bank trust, foreign office permit and legal fees.

Set up fees for a bank trust ranges from US$450 to US$1,000, with annual service charge of around the same amount. Permit from the Mexican foreign affairs office is around US$1,100.

Most foreign buyers hire Spanish-speaking lawyers to deal with the notary public and to check the contract.

Title Insurance

*An Additional Item to consider

Since there is no State guarantee of title, title insurance can be highly recommended when available. Several US companies offer insurance for Mexican real estate at around 0.5% to 0.7% of property value.

 

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