What are the costs associated with buying real estate in Mexico?

Closing Costs in Mexico typically include:

• Bank Trust: Foreigners must use a bank trust, or Fideicomiso, to own property near the coastline or border. Costs range from US$500 to US$1,500 annually.
• Notary Fees: Notaries prepare and certify legal documents, costing around 0.5% to 1% of the property value.
• Title Search and Insurance: Ensures clear title and protection from claims. Costs about 0.5% to 1% of property value.
• Appraisal: Determines fair market value, costing around US$300 to US$500.
• Transfer Tax: Paid to the government, varies by state, around 2% to 2.5% of property value.

             Regarding taxes:

• Value Added Tax (VAT): Applies if the seller is a developer or company, at a rate of 16%.
• Property Tax (Predial): Paid annually to local government, typically 0.1% to 1% of property value.

All these costs represent 5-10% of the purchase price.