Buying Property in Mexico as a US Retiree: How Not to Get Scammed
Mexico · PROPERTY
Key Facts
- The restricted zoneNo foreign direct title within 100km of a border or 50km of a beach.
- The workaroundA bank trust, the fideicomiso, runs 50 years and is renewable.
- The permitThe foreign ministry charges 21,648.83 pesos, about US$1,270.
- The catchNo Mexican bank publishes its own trust fees, so demand them in writing.
- The warningThe US Treasury says timeshare fraud in Mexico targets older Americans.
- The numberRoughly 6,000 victims lost close to US$300 million from 2019 to 2023.
Buying property in Mexico as a foreigner is legal, common and well trodden. It is also governed by rules that have no American equivalent, and that is where people lose money.
The rule that surprises every American
Article 27 of Mexico’s constitution bars foreigners from direct dominion over land near the frontier and the sea. The bands are 100 kilometres and 50 kilometres.
That band is called the zona restringida, the restricted zone. It covers almost every place a retiree actually wants to live.
Read the wording carefully. The ban is on dominio directo, direct dominion, and that single word is what makes the legal workaround possible.
Outside the restricted zone, a foreigner may hold title in their own name like anyone else. Inland cities such as San Miguel de Allende and Mérida sit outside it.
The fideicomiso, and what it is not
Inside the zone, buying property in Mexico means holding it through a fideicomiso. A licensed Mexican bank holds the title as trustee, and you are the beneficiary.
The bank needs a permit from the foreign ministry to do it. The bank applies for that permit, not you.
The trust runs for a maximum of 50 years and can be extended on application. That is set out in the foreign investment law itself.
Here is the part the sales brochures skip. The law says the trust grants use and enjoyment without creating real property rights over the asset.
In practice you can sell, will and improve the property. But you are a beneficiary of a trust, not a titleholder, and the paperwork behaves accordingly.
What it costs, and the figure nobody will give you
The government permit is published. The federal fees law sets it at 21,648.83 pesos, about US$1,270 at the official rate of 17.0638 pesos on 18 August.
An extension costs 10,613.78 pesos and a modification 9,740.31 pesos. Those numbers are in the statute and cannot be marked up.
The bank’s own fees are a different matter. We checked BBVA, Banorte, Monex and INVEX, and not one publishes a set-up fee or an annual fee.
BBVA’s page says only to consult an adviser for the amount by region. So the figures circulating online come from brokers, not from banks.
Ask the trustee bank for a written tarifario before you sign anything. A firm that will not put its own fee schedule in writing is telling you something.
The company structure that does not work for a home
You will be told a Mexican corporation is the answer to buying property in Mexico on the coast. That is true, and it is true only for non-residential use.
The foreign investment law is explicit. A company may take title for non-residential activities, and may take only rights, through the trust chapter, for residential ones.
So a corporation cannot lawfully hold your own house on the beach in direct title. Anyone structuring it that way is putting your money in a defective title.
And no, the law has not changed. A 2013 initiative to let foreigners buy outright passed the lower house and died in the Senate.
The notario is not your estate agent
A notario público in Mexico is a lawyer appointed by the state after a competitive examination and invested with public faith. There is no American equivalent.
The notario verifies that the seller can actually sell, and drafts the deed. They also obtain the no-debt certificates and register the new owner.
Estate agents are a different animal. There is no federal licence, and only some states register them at all.
Quintana Roo has required a matrícula since a 2024 law, with fines for operating without one. Jalisco has its own register, and most states have nothing.
The law guarantees free choice of notary. Use it, and do not accept the developer’s in-house notario without asking why.
Ejido land, the trap that voids the sale
Ejido land is communal land held by a farming community. It is not private property and it cannot simply be sold to you.
Converting it requires the community assembly to authorise dominio pleno. The national agrarian registry then cancels the parcel certificate and issues a title.
Only after that does the land leave the ejido system and become ordinary private property. Even then, a first-refusal right runs to family and community members.
A private contract for parcel land that has not completed that process is void. You do not get title, and you litigate in agrarian court rather than civil court.
One more thing. Completing the conversion does not waive the restricted zone, so a beach plot still needs a fideicomiso afterwards.
The four documents to demand
Buying property in Mexico starts with the certificado de libertad de gravamen from the public registry. It shows liens, limits on ownership and preventive annotations.
It costs 485 pesos in Mexico City, about US$28, and it is a snapshot. Pull it again immediately before signing.
Second and third, the no-debt certificates for predial, the property tax, and for water. Unpaid arrears travel with the property.
Fourth, proof of construction permits and land-use authorisation if you are buying off plan. Developers selling without permits is a documented pattern.
Names and fees vary by state. What does not vary is that a seller who resists producing them is the problem.
What the US government actually warns about
The risk in buying property in Mexico is not a rumour. The US Treasury said in August 2025 that a criminal organisation took control of timeshare fraud schemes in and around Puerto Vallarta.
Its wording is blunt: these complex scams often target older Americans who can lose their life savings.
Treasury put the toll at roughly 6,000 victims and close to US$300 million between 2019 and 2023. In 2024 alone it counted nearly 900 complaints and over US$50 million.
The pattern is advance fees. Victims are asked to pay fees and taxes before receiving money they are supposedly owed, and the money never comes.
Treasury also warns that victims get hit twice, by fraudsters posing as government officials offering to recover the loss.
The line in the State Department advisory people miss
The State Department’s Mexico page tells Americans to consult a Mexican attorney before buying. It also warns about aggressive sales tactics.
Then it says something sharper. Disputes over timeshare arrangements have led to legal action and detentions.
Read that again. A civil dispute over property in Mexico can end with the American in custody, not merely out of pocket.
It also points buyers to PROFECO, the federal consumer agency, for complaints.
If you are renting rather than buying
Mexico City reformed its rental law in August 2024. Rent increases are capped at reported inflation and landlords must register leases in a digital registry.
The supreme court upheld that cap in February 2026. It also limited the registry to the rent, the agreed increase and the neighbourhood.
None of that applies anywhere else. A retiree renting in Mérida, Puerto Vallarta or San Miguel gets no rent cap and no registry.
A guarantor, the fiador, is common but is not required by law. There is no statutory cap on deposits either, whatever you are told.
One month’s deposit is the market custom. Insist on a written contract in Spanish, and never sign a document you cannot read.
The five-minute version
When buying property in Mexico, never wire a deposit before a notario confirms the seller can sell. That single rule stops most of the fraud aimed at foreigners.
Choose your own notario, and ask the bank for its written trust fees. Pull the lien certificate twice.
Check whether the land was ever ejido, and ask for the permits. Refuse anything that is not in Spanish.
And treat urgency as a warning sign rather than an opportunity. Nothing about Mexican conveyancing is fast.
Frequently Asked Questions
Can Americans own property in Mexico?
Yes. Outside the restricted zone a foreigner may hold title directly. Within 100km of a border or 50km of a beach, ownership is held through a bank trust called a fideicomiso.
How long does a fideicomiso last?
A maximum of 50 years, extendable on application. The trust is granted by a licensed Mexican bank under a permit from the foreign ministry.
What does a fideicomiso cost?
The government permit is 21,648.83 pesos, about US$1,270. Bank set-up and annual fees are not published by any Mexican bank, so demand a written fee schedule.
What is ejido land and why does it matter?
It is communal farmland that cannot be sold to a foreigner until the community authorises conversion to full ownership. A private contract before that process completes is void.
What do US authorities warn about?
The Treasury says timeshare fraud in Mexico targets older Americans. It counted roughly 6,000 victims and close to US$300 million lost from 2019 to 2023. The State Department warns that property disputes have led to detentions.
Sources
- www.diputados.gob.mx
- sre.gob.mx
- home.treasury.gov
- mx.usembassy.gov
- travel.state.gov
- www.pa.gob.mx
- colegiodenotarios.org.mx