Buying property in Puerto Vallarta as a foreigner

The restricted zone and the fideicomiso

Along this coast you are inside Mexico’s restricted zone: a strip of 50 kilometers from the beach, and 100 kilometers from an international border. A foreign individual generally cannot hold direct title to residential property there.

The usual path is a fideicomiso, a bank trust. A Mexican bank is the trustee and holds title. You are the beneficiary. The trust contract is what gives you the right to use the property, rent it, improve it, and sell the beneficial rights. The term is up to 50 years, and it can be renewed.

The bank charges a setup fee and an annual fee. Those amounts depend on the bank and on the property. I do not publish a standard number, because there is not one.

Some buyers look at a Mexican company instead of a trust. Whether that structure fits a home, and what it costs to keep, is a question for a notary and a lawyer. It is not the default, and it is not something this page can choose for you.

Closing costs

A closing in Mexico is done before a notary. The notary calculates the costs for that deed. They are not a single percentage I can put on a website.

On the buyer’s side, the categories people should expect to see are: the acquisition tax (impuesto sobre adquisición de inmuebles), which is set by the state and is not the same in Jalisco and in Nayarit; notary fees; the appraisal and the certificates the notary requests; and, when a trust is required, the bank’s setup of the fideicomiso.

Who pays which line is written in the offer. A listing does not decide it. Seller costs often include the seller’s part of the notary work and the income tax on a gain. Get the notary’s estimate before you treat a headline price as the amount that leaves your account.

Taxes while you own it, and when you sell or rent

Predial is the annual property tax, paid to the municipality. The rate and the cadastral value are local. A fideicomiso also has the bank’s annual fee, which is not a tax but is a carrying cost. Condo or community fees are a third line, and they are not optional if the regime charges them.

When you sell, ISR (income tax) can apply to the gain. A primary residence may qualify for an exemption if you meet the conditions in force at the time, including how long you have lived there and the value limits, which change. The notary withholds. Confirm the current rule before you plan the net.

Rental income is taxable in Mexico. A non-resident may also have a filing duty at home. Occupancy, empty weeks, and deductibility change the result. This page does not estimate a yield.