The value of your property in Mexico lies not only in the obvious benefits you get from it but also the lower prices of real estate and upkeep when compared to its counterparts in Europe, Canada and USA. Plus, comfortable weather, great-tasting food, and a relaxing lifestyle give more value to your money than in any other place in the world. Property maintenance, taxes, and housekeeping services are cheaper in Mexico and go a long way to making life far more comfortable.
When you purchase property in Mexico, consider these direct and indirect costs:
Home and Contents Insurance
An important consideration when you own property in Mexico is insuring your home. This covers both the house and its contents. Beautiful properties built along coastal areas and areas prone to flooding should take out specific insurance policies to cover such unlikely events.
Cost of Real Estate
As in any country, the bulk of your expenditures will go to the actual cost of the property in Mexico you are buying. Mexican properties vary in costs depending on the location, size, and amenities.
Taxes on Property in Mexico
You will need to take into consideration the annual tax on property in Mexico called “predial”. Depending on the size and location of your home, these property taxes may differ in various states although the usual amount is only a few hundred dollars. There are some areas where you will not receive a bill in the post or a reminder, so make sure you know when this payment is due, which is usually done in the local mayor’s office.
Real Estate and Agency Fees
Investing in a Mexican property has also additional charges which you must consider in your over-all investment. Fees such as: notary fees, sales taxes, and agency fees as well as other lawyer’s fees must be paid.
Fideicomiso – Bank trust for your property
Fideicomiso is a special land trust from a bank for foreign residents who would purchase a property within specified locations like within 50 km (30 miles) away from a Mexican coast or 100 km (60 miles) from any border. Depending on your property, an upfront fee followed by a yearly payment ranges from about US$500.
Electricity and Gas
The cost of services is higher in Mexico comparing it to the average person’s earnings. Gas and electricity costs may seem lower than those in the northern border. It is good to note that the more electricity you consume, the energy units become more expensive. Government subsidy is provided as long as you don’t go beyond your “allowance” or the responsibility of paying the full electric bill is yours.
HOAs
When budgeting for your home costs for a year, remember to include the HOA’s fees and other subsequent payments. This is relevant for any gated community, similar to buying a condo, an apartment, or living within a golf or country club.
Feel free to add any costs related to property ownership in Mexico that we may have overlooked.