Hi, I’m Ivan Castillo, real estate attorney & founder of Title Solutions de México, title company composed of senior bilingual attorneys who advise, guide and manage the multiple legal aspects in real estate transactions, providing due diligence, escrow, mortgage and closing legal support, granting pre, during and post closing assistance.

At Title Solutions, we protect our clients from financial and legal risks when selling and buying real estate properties.

Feel free to contact us any time, it will be a pleasure to assist you.

Title Solutions will advise, guide and manage the multiple legal aspects in a real estate transaction, providing pre, during and post-closing assistance.

Pre closing is identifying the legal status of a property, meaning conducting due diligence, confirming if a seller is the rightful owner, if a property is free and clear from any liens, therefore, this is the moment where potential legal and financial risks are identified.

Based on the due diligence, legal documents will be prepared, such as purchase and escrow agreements, instruction letters, among others.

Once such documents are executed a closing date will be set, date when all parties will execute the deed that officially transfer title to a buyer, ending with this the last phase of the real estate transaction.

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The process to purchase property in Mexico is simple and similar to other countries, for example:

1. If you like a property, you submit an offer
2. If the offer is accepted you execute a private purchase agreement
3. Finally, the purchase agreement will mature into the final deed that officially transfers title to the buyer, this last step is considered as the legal closing,
   

Now, its recommended that prior to the legal closing, a physical inspection is conducted in order to verify that the property does not have any visible defects and contains the promised furniture, fixtures and improvements agreed with the seller.

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Certainly, if you are a foreign buyer acquiring within 50 km from the coastline or 100 Km from the border, the title will be in the form of a Trust, which in Spanish is called Fideicomiso, such trust has a term of 50 years and is renewable for the same period of time over and over.

No, it does not represent any risk, in fact, the buyers are designated as the principal beneficiaries of the trust and as such they can use, enjoy and dispose of the property as they may wish, at the same time, the buyer can designate substitute beneficiaries for the event of death, avoiding high costs and complicated probate procedures.

Moving to Mexico involves some planning and paperwork. Mexico’s laws permit foreigners to reside and work. However, not everyone needs or wants to become an official resident of Mexico, even if you spend extensive time in the country, but definitely, being a permanent resident in Mexico has many benefits, such as tax deductions, discounts, among others.

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Depending on the location of the property, you will be required to acquire through a Mexican Real Estate Trust (Fideicomiso), created with a Mexican banking institution, that will appoint the buyers as principal beneficiary and at the same time appoint substitute beneficiaries in the event of death, which is convenient since probate procedures are eliminated. A trust is for 50 years renewable for the same period of time over and over.

For tax reasons, we consider convenient to purchase as an individual. Looking ahead, if you ever decide to sale the property, having certain documentation such as a permanent resident visa, you will be able to deduct taxes and reduce the capital gain tax in an important way.

This would not be possible if a legal entity is the owner of the property.

Yes, however, that is not the answer for everyone, from the moment you create the entity you will have legal and accounting obligations. Please consult with Title Solutions in order to help you make the right decision.

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