Buying real estate in a foreign country doesn’t have to be as hard as learning another language.
Home-buying abroad can be tricky. Here, we’re sharing tips to help you confidently purchase that Mexican beach house you’ve always dreamed of with help from Jonathan Pikoff, one of the few U.S. attorneys with a Mexican Law License. After completing law school in Texas 30 years ago, Jonathan arrived in Mexico where he would then complete the five-year law program at Mexico City’s National Autonomous University of Mexico. He’s the founder of Pikoff y Asociados, S.C., a Mexico-based law firm with offices in Los Cabos and Mexico City. His practice is focused on real estate development and advising U.S. public and private companies in Mexico.
What are some of the major differences between buying real estate in the United States as opposed to Mexico?
According to the Mexican Constitution, residences within 50 kilometers of the coastline must be purchased through a trust. The trust is good for 50 years and renewable for another 50 years. It is not a lease; the ownership is held by the bank for the benefit of the American owner. The trust is a passive structure and the IRS has ruled no Form 3520 reporting is necessary. The annual trust fee is around $500. Generally financing is also not available unless negotiated with a developer or in a resale situation.
What are some real estate trends you’re seeing right now?
High-end housing continues to be strong. Many developments are continuing with the contemporary architectural look while others continue with the traditional hacienda style. Lifestyle amenities are also a predominant focus.
Any tips for first-time buyers abroad?
Find a real estate broker who is familiar with the area as not all information is public and searchable online. While it might be more expensive, it’s prudent to find a qualified attorney early on in the process. Far too often clients have already signed the contracts before asking for advice, making it more difficult to be proactive.
What are some things to look for when searching for the right real estate agent?
Ask for referrals and the location of their listings. Brokers may focus on different product and areas of the town.
What’s the first step to take for those interested in buying a second home in Mexico?
The search can start online from home but to really get the feel, visit the town, drive around and try to make an extended stay.
What are some of the benefits to owning a second home?
A special place for making memories with friends and family. And depending on the property, the opportunity to earn rental income.
Any tips for owning or purchasing a second home?
Find a good property manager to control carrying costs and for peace of mind.
Questions? jpikoff@pikofflaw.com
This article originally appeared in the 2019 Fall/Winter issue of InMexico Magazine.
Photo: katie manning on Unsplash