You Have Purchased Property in Mexico, What’s Next?
The most critical points that must be considered after purchasing a property in Mexico include:
Getting Possession of the Original Title Deed
Get that title deed in your hands; five to six months after both parties sign the title deed, your lawyer or the Notary must provide you with the original title deed.
The original title deed includes the boleta de registro with the folio number; this document guarantees the title deed has been registered in the Public Registry of Properties. In their files the last information will be the transfer of rights in favor of the purchaser.
Annual Payment on the Trust
Begin paying the annual fees to the fiduciary; the amount depends on the bank trust. Your lawyer can provide the contact information of the fiduciary to request the invoice which must be paid each year to comply with the obligations of the trust. The annual fees will vary between $400.00 to $600.00 USD depending on the bank and the property and may be paid by wire transfer. Confirm with your lawyer the bank trust account number and verify the due date of your annual fee. You may never see an invoice, so it is essential to keep track of your due date to avoid late fees and always keep your receipt as proof of payment. Some foreign property owners hire an accountant or property manager to take care of their property financial obligations; it is imperative you follow up and request proof of payment that your taxes, fees or utility bills have been paid.
If the newly purchased property is in a condominium development, you must contact the administration office to coordinate your condominium fees which are paid monthly.
Attending Condominium Assemblies
If the property is in a condominium, you should attend the assemblies along with the other owners in order to voice your opinion and vote on major decisions concerning your new home. You will need to vote on the budget and determine the amount that each owner must pay for the monthly condominium fees, the reserve fund and also to ensure you stay informed of any issues that may arise in the complex.
Predial Property tax
Property taxes must be paid annually. When the parties sign the title deed, the seller will provide a copy of the property tax to prove it is paid up to date and the purchaser will take over the payments for the following year. Review the invoice at the municipality or online. Confirm the property location and name on the deed. The property owner will be registered to the bank if it was purchased through a fideicomiso. Make sure the Cuenta Catastral is the same as the account number on your deed.
We recommend paying property taxes in December since the municipality provides a discount of the 20% or 25% if you pay the full year in advance. Property managers, real estate agents, your lawyer or a friend can make this payment if you are not in Mexico during this time, but again, request proof of payment. Keep your receipt from the property tax with your title deed.
Purchase home insurance. Consult a reputable Mexican insurance broker to review your options. If you have purchased in a condominium obtain a copy of the master HOA insurance policy. This will help you determine which policy you require to protect your personal unit. Consider hurricane coverage, water damage, rental liability and loss of rental income coverage.
If you are employing workers in your home, you need to research the social security and benefit requirements. Mexico has strict labor laws which generally favor the worker; it is important to understand your obligations as an employer.
Hire an Accountant
Starting a home business or renting out your home? Consult with the accountants at Mextax, a professionally trained accounting team who will manage your personal and business tax and accounting obligations in Mexico with consideration of your country of origin’s requirements.