Sun, sea and low prices… these are the three main reasons why searching for a House for Sale in Mexico attracts more and more Canadians and Americans in search of a piece of paradise for their retirement. Many of the expats who are now living in Mexico started out by vacationing there and settling for good after they discovered the perks of the Mexican life. If you are looking for a house for sale in Mexico and are not yet sure if this may be the right step for you, here are some of the most important things you should know about owning a house in Mexico.
Mexico is not only the winter refuge of monarch butterflies. It is also one popular refuge for thousands of Canadian retirees! In 2007, Mexico was called “the ideal country in which to spend your old days” by International Living, a magazine that provides an annual list of destinations for retirement. The ideal climate of the country is what makes this destination a special one and those who are already retired here can vouch for the absence of rainy days. The Chapala region for example is known for its “eternal” spring. This area is surrounded by mountains and with an average temperature of 23 degrees Celsius and very low precipitations, the climate is not only appeasing joint pain, but it is also sweet for the portfolio. Another area that should be on your list when considering a property in Mexico is the Oaxaca Riviera, which boasts no less than 340 days of sun and average annual temperatures of 30 degrees mean. This means that there even in winter there are no rains here, so if you love sun and a crystal-clear sky, this could be the right location for you.
Cost of Living Perks when looking for a House For Sale in Mexico
After the weather, the low cost of living is another thing that attracts retirees from Canada and U.S. to Mexico. Since 2002, the value of the Canadian dollar against the Mexican peso has almost doubled. As a result, you will now pay just over $12.5 for a dinner at a restaurant, while an evening for two at the cinema with popcorn and soft drinks is less than $10. As for some delicious tacos on the street, you will not have to pay more than $2 or 3. If you are a Canadian citizen, you may soon find out that it is more convenient to become a non-resident of Canada. From a financial point of view, you will end up with a lower living cost as a retiree who lives abroad year-round. Canada has signed an agreement with Mexico, just like 85 other countries. Under this treaty, the Canadian government imposes its non-residents a tax rate of 15% on income from Canadian sources. In theory, residents are taxed up to 28% – the Canada already taking 15% share, with Mexico raising it with an additional 13%.
In order to prove the Canada Revenue Agency that you are no longer a Canadian resident, you must sell your principal residence or long-term lease it, move your husband, wife or children in the host country; sell personal property (automobiles, recreational vehicles, furniture, clothing, etc..) and renounce your insurance. Basically, it means cutting out the ties with your homeland as much as possible, mainly from an economic point of view, by cancelling your bank accounts, credit cards and quitting your job if you still have one. In the 1917 constitution, Mexico prohibits foreigners from owning a residence located within 50 km of its coastline or 100 kilometres of its borders. Buying a house for sale in mexico comes with due diligence. Research as much as you can.
Be Aware When Bidding on a House for Sale in Mexico
The Mexican government has not modified this law, but it provides an alternative: the fideicomiso, according to which the bank is the legal owner of the property and the foreign buyer the beneficiary. You have the same right as an owner, meaning that you can renovate the house as you like, rent it out and even sell it. The costs of such a venture are about $1700, with additional annual fees of about $500. When the residence is located inland, as in the Chapala region, foreigners may be owners in name.
Make sure you are well aware of the legal situation of the land you are buying, because in some cases people end up paying tens of thousands dollars only to discover that they are owners of nothing. In order to avoid procedural nightmares, the best thing you can do is dealing with a trusted agent or broker. Mexico agents and brokers do not have to hold a license, unlike those in Canada and the U.S. Before buying the home, they can help you take title insurance, which gives some sort of protection, especially in case of fraud (eg when the seller was not the owner of the residence). Such costs of insurance can come up to a total of 0.5 to 1% of the purchase price. To complete the transaction, you will have to deal with a notario public, who in many cases will be recommended to you by your real estate broker or agent.
What are your thoughts when considering a House for Sale in Mexico?
There are many perks to retiring in Mexico, but there are also concerns with the process of choosing the best House for Sale in Mexico. What have you learned? What advice could you give? Please leave a comment on this page to help the rest of learn from your experience.