Are you wondering what the average cost of a house in Mexico is? Statistics show that a property in the country’s capital city costs almost three million Mexican pesos, which is around $160,000 US dollars. This is approximately double the national average, but still significantly less than the house to buy property in most places in the States or Canada. However, there are so many factors that go into the cost of a home including home size, location, number of bedrooms and bathrooms, and lot size. In addition, if you own a property in a tourist destination or align the cost, that cost will be significantly more due to the high demand of homeowners who want to live by the beach. In the meantime, keep reading more to learn about the average costs of homes in Mexico.
What Determines the Cost of a Home?
To start with, the location is one of the biggest factors in determining the cost of a home. A desirable location will always bring a higher price tag versus a property in an unfavorable location. Therefore, homes that are located on or close to the beach are generally more valuable than homes located inland. Also, the larger the home is as well as the number of bedrooms and bathrooms, the higher the value as well. Also, the quality of finishes plays a role in determining the price of a home. Similarly, if the home has a pool, yard, garage, or other additional features, this will increase the value as well. Likewise, if a home has amenities and services such as a condominium complex or a home that is located in a gated community, those properties tend to be more costly.
Costs to Buy a Home
In addition to the purchase price of a home, there are other costs to consider if you are planning to purchase property in Mexico. For starters, it’s always a good idea to pay for a property inspection prior to purchasing property. That way, you can make sure there are no unforeseen or hidden damages or structural issues with the property. Likewise, a property valuation report is a wise idea. In Spanish, these are called an “Avaluo” and they cost between $200-$300 US dollars for an evaluation by an experienced professional. Once an agreement to purchase a property has been produced, there are also closing costs to pay. ‘Closing costs’ is a term for the fees and charges that homebuyers need to pay when they complete a legal property transfer. Usually between 5% and 10% of the property’s sale price, these fees include Notary Public fees, sales taxes, and any other charges that may be required to secure the property’s legal transfer.
Ongoing Property Costs in Mexico
Next, property taxes will need to be paid annually on properties owned in Mexico. Known as the Predial, it’s pay-able by property owners once a year at your local Municipality. Typically, your property tax bill in Mexico is only around a few hundred dollars per year. In addition, if you purchase a condominium, apartment, penthouse, or a property in a gated community, you will need to pay regular maintenance and service fees. These fees will be applied to upkeep of services and amenities at the property such as swimming pools, gyms, club houses, landscaping, etc. Sometimes, property associations will require owners to pay a lump sum for a major project like a new roof or major repairs to the swimming pool. Make sure you understand the maintenance and service fees, and understand that they usually increase over time as well. Also, electricity, gas, water, and other utility costs have to be paid as well.
Bank Trust Fees
Lastly, only Mexican citizens can legally buy property within 50 km (30 miles) of the Mexican coast or 100km (~60 miles) of one of Mexico’s land borders. If you are a foreigner buying land on the coast or close to the border, Mexican law requires that the land be held in a Bank Trust, which is known as a Fideicomiso in Spanish. The Trust will be established at the time of purchase. It ensures that the asset is yours in all but name, and bank trusts are usually set up through a local bank. To establish a Bank Trust, there is an initial set-up fee, plus an ongoing yearly fee as well. The exact fees vary depending on the value of the property transaction, but set-up costs average around $1,000 US dollars and ongoing Trust fees range from between $500 US dollars to $2,000 US dollars per year. If you purchase land or property inland of these distance limits, there is not a bank trust requirement so you may own the property in your own name.
We hope you enjoyed this article about the average costs of homes in Mexico, and the fees and processes required in order to purchase real estate in the country.
About Lemuria Real Estate
Ideally situated on Puerto Vallarta’s exclusive South Shore, Lemuria Residences is a new luxury condominium complex that belongs to a Master planned community designed by the prestigious Gensler Global Architecture firm. The ecologically planned themed property includes more than 1700 acres of preserved Sierra Madre jungle with stunning views of the mountains and Banderas Bay. The outstanding onsite amenities include multiple pools, BBQ areas, restaurants, a 2000 square meter spa, Sports Club, gym, tennis courts, pickleball courts, organic herb garden, and yoga spaces. There are also freshwater rivers and private hiking trails located nearby so it’s the ideal place to invest if you want to be close to nature. Contact Lemuria Residences today to learn more about our luxury beachfront condominiums for sale in Puerto Vallarta.