When buying a home in the U.S. and Canada, the "seller" is legally obligated to disclose to the "buyer" any hidden flaws that may exist. In México, this is not the case. Therefore, when you have chosen the home you want to buy, new or old, it is a good idea to have some professionals take a look. If it is obvious that the property will need major repairs, your realtor should be able to recommend some tradesmen to give you a "ball park" estimate.
A couple of things may surprise you: The cost of painting is remarkably low and roofs, which are a major concern in other countries, are very economical to fix and maintain here. This is due to the building materials used and the cost of labour.
In México we do not make an offer to purchase subject to inspections or financing so your homework has to be done before you start negotiating. Also, don't assume that "the seller" will fix anything at your request.
Some of my clients brought along a hair dryer to check the electrical outlets and a marble to see the slope of the floors! A look at the latest water bill may tell you if there are any problems with the plumbing.
cost of living in mazatlan
Everyone interested in retiring or investing in vacation home in México needs to know the costs involved in operating and maintaining the property.
Many people will agree that the ideal retirement scenario is November to May in Mazatlan and go somewhere cooler June through October. Apart from having the best of two climates it makes a lot of economic sense as well.
In Mazatlan the average winter temperature is in the mid 70's. There is no heating in the homes and there is no need to buy expensive winter clothing.
Propane is used for gas stoves, gas dryers and water heater. The cost of gas for average use is about $30.00 USD per month.
Electricity is inexpensive in the winter months as there is no need for air-conditioning. The monthly average from November through April is about $50.00 USD per month. In the summer it can cost from $ 200.00 USD or more to air-condition your home, depending on usage.
Water is reasonably priced all year round and the bill for the average family would be less than $7.00 USD per month.
Telephone charges run about $30.00 per month but there is now a local charge for each call after 90 calls per month. Among different telephone plans, there is also the option of getting a cellular phone that you can use only when you are here. Cell phones are relatively inexpensive.
Domestic Employees: The cost of a full time maid (6 days a week) runs about $80.00 USD a week or on a part time basis will cost about $15.00 USD for one day of work. This includes everything from washing windows to cooking meals. Some foreigners feel uncomfortable having help in their homes but believe me, when it comes to sweeping and mopping the miles of tile floors you'll be very grateful. These employees can also help you learn Spanish and will be your window to the Mexican Culture. A word of advice: It is a good idea to register your full- time employees at the Mexican Social Security which gives them access to benefits such as health insurance for their immediate family, day care centers, pension plans and government low cost housing.
Property Taxes: The yearly property tax for the average 3 bedroom home in a good area is about $200.00 USD.
Trust Fees: To own property in México near the coast or the borders, foreigners need to establish a Bank Trust. The yearly fee is about $400.00 USD.
bank trust "fideicomiso"
Many people have heard that foreigners (non Mexican Citizens) cannot own property in México. This is partially true. The Mexican constitution prohibits foreigners from owning property in a restricted zone which is 50 kilometres from the coastlines and 100 kilometres from the borders. So if this is the case, why do so many U.S. and Canadian citizens have retirement homes and vacation condos in Mazatlan?
The answer to this question is that most foreigners have a Bank Trust known as a "Fideicomiso". In an effort to increase foreign investment, the Mexican Constitution was amended in 1971 to allow foreigners to acquire residential Real Estate by establishing the Bank Trust. The foreigner becomes the beneficiary of this trust. The original trust permits were for 30 years and may now be extended or renewed. Since 1993, the permits issued are for 50 years. The beneficiary of the trust may sell the property at any time during this period to a foreign or Mexican citizen. I have personally purchased and sold a number of properties in Mazatlán since 1981 and all the properties have been in Bank Trusts.
The entire cost for setting up a trust, including the permit, bank initiation fee, an annual bank fee paid in advance and the trust registration in the Mexican registry of foreign investment is approximately $2,600.00 US Dollars. The annual fee and level of customer service varies from bank to bank, so it's always a good idea to ask your realtor for advice.
The main benefit of the trust is that it allows you to designate substitute beneficiaries, so in case of death, there is no Will to probate.
There are a number of ways to avoid the trust but usually what initially seems easy, gets complicated when you decide to sell. For example, if you have a child who was born in México, you can deed the property in the child's name. Nevertheless, if the child is a minor when you decide to sell, you must get permission from a Mexican judge. This can be a long, drawn out legal process, which take time and money. Another possibility is to form a Mexican Corporation, but this only makes sense if there is a business purpose, as the tax issues are more complex. Over the years, many foreigners have used their Mexican friends to appear as the owners of their properties. I know of many cases where this has worked out very well and have heard of a number of bad experiences. This way poses a risk for obvious reasons.
There has been a persistent rumour for years that the laws regarding foreign ownership are changing and the trust will no longer be required. Lately there has been nothing new on the subject so your best bet is to look for a bank which offers the best price and service for the "Fideicomiso".
