Buying Mexican Real Estate – Some Common Real Estate Terms
Closing Date
The closing date or completion date is the day the property is transfer to the buyer, and the title deed is signed.
Condominium Regime
This document granted by a Notario Publico and recorded in the Public Property Registry. It contains all the rules and regulations for the development as well as legal matters regarding the complex. The buyers will not receive the title until the regime is registered.
Notario Publico
A Notario Publico is a licensed attorney, certified, and appointed by the government. The notario acts as an official representative of all parties of the transaction. They do not represent only you; you should have your lawyer oversee the transaction and protect your investment.
Fideicomiso
A fideicomiso is a bank trust; foreigners who buy property within the restricted area must use a trust to hold the property. The property is not an asset of the bank, and the buyer has all the benefits of direct ownership.
Cesión de Derechos
The assignment of rights is the act of taking over an existing fideicomiso rather than creating a new one. It will be dependant on the length of the term remaining on the trust.
Title Insurance
This type of insurance is a form of indemnity insurance meant to protect the holder from financial loss if any defects arise on the title of the property. Title insurance is an unnecessary expense if you hire a competent Mexican law firm. Choose a law firm that offers a title guarantee.
Registro Publico
The Registro Publico is the Registry of Public Properties. This office maintains the records of ownership of all properties held in the municipality. The title deed is not valid until the notary has registered it.
Apostille
The Apostille verifies that it is legitimate and authentic to use it in another country who are members of the Hague Convention. Typically foreign documents such as birth certificates, marriage certificates, or death certificates need to be apostilled for use in Mexico.
Impuesto Sobre Adquisiciones de Bienes Inmuebles
Impuesto Sobre Adquisiciones de Bienes Inmuebles is and acquisition tax on real estate, and it is calculated at 3% of the property value.
Impuesto Predial
Predial is the annual property tax in Mexico.
Factura
A factura is an official, tax-deductible invoice by company or individual, and it is the only receipt that is tax-deductible in Mexico.
Clave Única de Registro de Población CURP (Unique Population Registry Code)
Similar to social security or SIN number for people living in Mexico.
RFC Registro Federal de Contribuyentes
RFC is an individual tax number.
Cedula Catastral – Cadastral Certificate
The official survey of the property, including the measurements of the property, the government’s assessed value of the land and building for the basis of the annual property tax.
Earnest Money
A sum of money given as a deposit to bind an offer or agreement, held in an escrow account. MexLaw provides fully insured escrow services by receiving the funds “in trust” in a segregated account held in a Canadian bank.
IVA Impuesto al Valor Agregado, or Value Added Tax (VAT)
It is a Mexican sales tax calculated at 16% throughout most of the country.
Cerficiado de No Deudo Predial
Certificate of no liability for property taxes, the seller must provide this.
Certificado Libertad de Gravamen
Free from liens and encumbrances certificate.