Every buyer who reaches out to us has some version of the same questions running through their head: Can I actually own this? What will it really cost? How do I pay for it? We put together straight answers to the questions that come up most, organized by topic, so you can get oriented before we ever sit down together. This is general information to help you understand how buying works here — for anything specific to your situation, we'll connect you with a qualified Mexican notary, immigration attorney, or tax advisor as part of the process.
The Fideicomiso Trust
What is a fideicomiso, and why do I need one? A fideicomiso is a bank trust — the legal structure that allows foreigners to own property in Mexico's "restricted zone," which covers anything within 50 kilometers of the coast or 100 kilometers of a border. Since Los Cabos sits right on the coast, virtually every foreign buyer here purchases through a fideicomiso. A Mexican bank holds the title as trustee, but you're named the beneficiary with full rights: you can sell, rent, remodel, renovate, or pass the property to your heirs, exactly as if the title were in your name.
How long does a fideicomiso last, and what happens when it expires? Trusts run for 50 years and are renewable — most buyers never think about the expiration date because renewal is routine and not something to worry about mid-ownership.
What does a fideicomiso cost? Expect a one-time setup fee, typically $500–$2,000 for the bank trust itself (this is separate from your overall closing costs, covered below), plus a modest annual maintenance fee to the bank — usually a few hundred dollars a year.
The Buying Process
What are the actual steps to buying property in Los Cabos? In broad strokes: you make an offer, which is typically accompanied by a good-faith deposit once accepted; a purchase agreement is drafted and signed; a Mexican notary public — who plays a much larger, more official role here than a US notary — oversees the legal and tax side of the transaction; your fideicomiso is set up (if you're buying in the restricted zone); title and lien searches confirm the property is clear; and at closing, the notary formalizes the deed and registers it with the public registry. We walk every client through each of these steps in real time, so nothing here is something you navigate alone.
Do I need a Mexican attorney? It's not always required by law, but we strongly recommend independent legal representation for any purchase, especially for buyers unfamiliar with Mexican property law. Your notary handles the government-required legal formalities, but a private attorney represents your interests specifically — the same way you would use one in a US transaction.
Closing Costs
How much should I budget for closing costs? Plan on roughly 5–7% of the purchase price in total. That figure includes notary fees (1–2%), the acquisition tax known as ISAI (3%, as of 2025), registration fees (around 1%), and smaller items like an appraisal and, if you choose it, title insurance (0.5–1%, optional but worth discussing). The fideicomiso setup fee mentioned above is separate and additional.
Are closing costs paid all at once? Typically yes, at closing, though some buyers split portions between escrow deposit and final closing depending on how the transaction is structured. Beyond these one-time costs, plan for ongoing annual property tax and fideicomiso maintenance fees, plus HOA dues if your property is in a managed community.
Financing Your Purchase
Can I get a mortgage as a foreign buyer? Yes, though it works differently than in the US. Most transactions in Los Cabos — over 90% — are cash purchases, but financing options do exist. Cross-border lenders (often affiliated with US or Canadian banks) offer dollar-denominated mortgages to foreign buyers, typically up to 70% loan-to-value, with terms from 3 to 30 years and a minimum loan amount around $100,000. Mexican bank mortgages are also available, generally offering higher loan-to-value (up to 90%), but they're primarily available to permanent residents and typically carry higher rates than US mortgages.
What other financing options exist? Developers on new construction often offer staged payment plans tied to building milestones. Sellers sometimes offer private seller financing, formalized through a notary with the property held in trust until paid off. Some buyers also tap US-based resources — a 401(k) distribution, a home equity loan, or a personal loan — to fund a Mexico purchase outright rather than financing in Mexico at all.
Residency and Visas
Do I need residency to own property here? No. You can own real estate in Mexico as a tourist, with no residency status required at all. Residency is a separate decision buyers make if they want to spend extended time in Mexico each year.
Can buying property help me get residency? Yes — real estate is one recognized path to Mexican temporary residency. A property valued at roughly $585,000 or more (documented with your public deed) can qualify you, as an alternative to the standard income route (roughly $4,300–$4,500 in monthly income) or savings route (roughly $73,000 average balance over 12 months). These thresholds are tied to Mexico's UMA index and adjust annually, so exact figures shift slightly year to year.
What does the residency application process look like? It's a two-step process: first, an interview at a Mexican consulate outside the country, where you present your financial documentation and pay a small application fee; then, once you enter Mexico, you complete a card exchange at the National Migration Institute within 30 days to receive your physical resident card. All told, expect roughly one to four months from start to finish, depending on consulate wait times.
Property Taxes
How much are property taxes in Los Cabos? Refreshingly little, compared to the US. The annual property tax, called predial, runs about 0.1% of the assessed value — and that assessed value is typically 30–60% below actual market price, which lowers the bill even further. On a $500,000 property, expect roughly $500–$800 a year; on a $1 million property, roughly $900–$1,500.
Is there a discount for paying early? Yes — pay your predial in January or February and most municipalities offer a 15–20% discount, meaningful savings for a minimal amount of planning ahead.
Ready to Talk Through Your Own Situation?
Every buyer's path looks a little different depending on citizenship, how you plan to use the property, and your long-term goals in Mexico. Reach out to Kirk and Cindy Iverson with Cabo Lifestyle Homes and we will walk through exactly what applies to you — and connect you with the notary, attorney, or financial advisor you'll want in your corner along the way.
This page is provided for general informational purposes only and does not constitute legal, tax, immigration, or financial advice. Laws, fees, tax rates, and residency requirements in Mexico change periodically and can vary by municipality and individual circumstance. Please consult a licensed Mexican notary, attorney, accountant, or immigration professional for guidance specific to your situation before making any purchasing or residency decisions.
