Q & A Buying Property in Mexico [] Inmtec Legal Services

By Ángel Marín Díaz

We welcome Ángel Marín Díaz with 21 years’ experience as CEO of Inmtec Legal Services Mexico City and San Miguel de Allende

Jennifer from Minneapolis, MN.

Hi Angel, I recently sold my home in Mexico and even though I signed the deed over to the buyers on a Friday, I did not receive my payment (thank God I did) till the following Monday from the escrow company. Was I ever at any risk of losing my home if they (escrow company) didn’t pay me?

AMD 

Hello Jennifer

I have a few things to say about this and some recommendations for all buyers and sellers of real estate in Mexico to follow even when using brokers and Notario services.

First, always use an escrow service. This protects your deposit whether you are the buyer or the seller from deals that can and do sometimes fall apart prior to closing.

Never accept Friday closings as there is nothing that can be done till the following Monday to rectify any potential situation that requires a solution.

Always use a closing service to ensure the safety and legal certainty of the property you are buying or selling as well as to determine for the seller their ISR (capital gains tax) exposure and reduce when possible.

For the buyer, it is equally important to have representation for financial planning for future sales and proper protection of a legal transfer of the real property. This should cost between 6 and 6.2 percent of the purchase price in this area of Mexico due to Article 7 of the New Transfer of Property Tax to the Buyer (4 percent on properties over US$75,000).

Lastly to answer your specific question, NO you were never in danger of losing the property; the Notario always includes a clause in the closing documents of property whether commercial or residential investment stipulating the full payment must be received by the seller before registering the deed (escritura) before the public registry (Registro Publico de la Propiedad).

Rick from Santa Barbara, CA.

Angel, I purchased a property in the last quarter of 2020. A local real estate brokerage ran the closing of the home purchase here in San Miguel de Allende. I was astounded at the closing costs incurred as the buyer (6.5 percent). Is this normal?

AMD

Hi Rick

The city of San Miguel recently instituted a real property tax called Article 7 which is a sliding scale tax for the sale of a property charged to the buyer. The tax starts at 2 percent for a home of an appraised value of US$25,000 and slides up to 4 percent for any property sale exceeding US$75,000. I should mention that Cancun buyers are paying 8 percent and in Los Cabos up to 10 percent.

Thank you all for your questions this week. For more specific information on real estate purchases in Mexico, fiscal planning for closing costs and capital gains, rental taxation, permits, estate planning, and all notarial services please contact the author:

Angel Marin Diaz.

President, C.E.O.

Inmtec Legal Services.

San Miguel Allende, Gto.

Mexico City, CDMX.

angel@inmtec.net

Cell – (754) 107-0163

Office 415-121-9005

Inmtec Legal Services.

San Miguel Allende, Gto.

angel@inmtec.net

Cell – (754) 107-0163

INMTEC SERVICIOS LEGALES is a bilingual legal firm, offering legal advice, in Real Estate, Labor, Family and Corporate Matters, also counting with immigration procedures, as well as Litigation in Civil, Commercial, Criminal, Administrative and Tax Law. Our attorneys have four decades of experience in all the branches mentioned earlier. – – – – – – – – – – – – We focus on our clients with Enthusiasm showing great Interest, Professionalism, and Attention, reflecting these in your case, which likewise is done with efficiency and great performance. Making your experience with INMTEC SERVICIOS LEGALES pleasant and with the expected results. INMTEC SERVICIOS LEGALS offers offices in San Miguel de Allene and Mexico City, which are deserving of our clients and have the best technology and infrastructure to give our clients security and comfort during their process with INMTEC SERVICIOS LEGALES.

At your service Ing. Angel Marín Díaz, President and C.E.O. INMTEC SERVICIOS LEGALES S.A. by C.V Lic. Edgar Rayas Bautista Managing Director INMTEC SERVICIOS LEGALES S.A. by C.V

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