Closing Costs In Mexico Explained


Closing Costs in Mexico are very different than what a US or Canadian Citizen would be used to paying when purchasing property in their home country.  In Mexico the closings costs associated with purchasing property are assessed to the buyer.  They are not a shared cost between buyer and seller and the fee's are not negotiable.    

In the example below where purchaser is obtaining a NEW Trust Deed  on the $2,000,000 purchase closing costs average 4.3%  While the $100,000 purchase the closing costs average 9.2%.  This is because some of the fee's are a flat fee or a fee based on the purchase price. 

There are fee's that apply when the buyer is obtaining a new 50 yeart Trust Deed / Fideicomiso such as the Application and Permit Fee and the Foreign Investment Registration.  If the seller has a Trust Deed in place already and  beneficial rights are being transferred from seller to buyer the Application, Permit Fee and Foregin Investment Registration would not apply.  If the buyer is taking title in an Escritura (the Mexican National's Deed) then no trust fee's apply as there is no trust bank involved for the buyer.  However if the seller in that case has a Trust Deed / Fideicomiso then there will be a cancellation fee of the Trust Deed assessed to the seller. 

CLOSING COST  EXAMPLE:  A $2,000,000 property purchase with a new 50 YEAR TRUST DEED

Application & Permit Fee: $1,200.00

Foreign Investment Registration: $700.00

Appraisal Fee: $550.00

Title Insurance: $14,000.00 (this fee is optional) 

Notary Fee: $20,000.00

Acquisition Tax: $40,000.00

Public Registration: $6,500.00

Certificate - No Liens: $35.00

Certificate - Property Tax: $10.00

Fiduciary Acceptance Fee: $440.00 (may depend on the trust bank)

Fiduciary First Annual Fee: $440.00 (may depend on the trust bank)

Closing Company Fees: $1,800.00 (to $2500 this fee varies depending on the closing company chosen by the buyer)

IVA Tax: $198.00

Telephones, Courier, Misc: $150.00

Total Cost: $2,086,023.00 (property purchase and buyer closing fees)

 

CLOSING COST  EXAMPLE:  A $100,000 property purchase with a new 50 YEAR TRUST DEED

Application & Permit Fee: $1,200.00

Foreign Investment Registration: $700.00

Appraisal Fee: $265.00

Title Insurance: $700.00 (this fee is optional)

Notary Fee: $1,000.00

Acquisition Tax: $2,000.00

Public Registration: $325.00

Certificate - No Liens: $35.00

Certificate - Property Tax: $10.00

Fiduciary Acceptance Fee: $440.00 (may depend on the trust bank)

Fiduciary First Annual Fee: $440.00 (may depend on the trust bank)

Settlement Company Fees: $1,800.00 (to $2500 this fee varies depending on the closing company chosen by the buyer)

IVA Tax: $198.00

Telephones, Courier, Misc: $150.00

Total Cost: $109,263.00 (property purchase and buyer closing fees)

Other fee's that apply are the Escrow fee which opens the account for where the buyers funds will held until closing date, this fee depends on the close company but averages about $750 us dollars.  This fee would be referenced in the buyers Offer To Purchase Contract.  

The Notary fee is based on the purchase price typically 1% but has a cap limit at $2,000,000  which means the notary cannot charge anymore than the fee $20,000 on property purchaser in a higher price point.

There may also be a reverse capital gain assesed.  This happens when the appraiser performs the requisite municipal tax appraisal to determine accurate cost basis of the property from the assessment of both the acquisition tax and the future property tax payments.  This is not a commercial appraisal and does not meet or provide a comparative market information or analysis. 

What you see in the examples above are the standard fees applied to a cash purchase (no financing involved). 

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YOUR Los Cabos Real Estate Professional

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Connie Meyerhoff  

480-393-0639

c.meyerhoff@snellrealestate.com