Frequently asked questions
Can foreigners legally buy property in Mérida and the Yucatán Peninsula?
Yes. Foreigners can legally own property anywhere in Mérida and throughout the Yucatán Peninsula.
All coastal areas (Progreso, Chelem, Chicxulub, Telchac) fall under the restricted zone, meaning foreigners buy through a fideicomiso (bank trust) or a Mexican corporation.
Both options provide full legal protection and ownership rights.
What is a fideicomiso, and how does it work?
A fideicomiso is a real estate trust that allows foreign buyers to legally own property near the coast.
Here’s how it works, in simple U.S.-friendly terms:
The bank holds the title, but YOU are the sole beneficiary.
You maintain full ownership rights:
✔ Live in it
✔ Rent it
✔ Remodel it
✔ Sell it
✔ Pass it to your heirs
The trust lasts 50 renewable years, and renewals are guaranteed.
The bank has no control over your property — it’s simply the trustee for foreign ownership.
In the Yucatán coastline, a fideicomiso is the most common structure.
Can I buy property through a Mexican corporation?
Yes. A Mexican corporation (S.A. de C.V. or S. de R.L.) is a highly effective structure when:
You’re purchasing multiple properties.
You plan to operate Airbnb or rental business activity.
You want to avoid the annual bank trust fee.
You are buying land for development.
Your corporation allows you to hold property in fee simple, similar to owning through an LLC in the U.S.
However, corporations require:
A local accountant
Monthly tax reporting
Proper bookkeeping
For a single property used for personal purposes in Mérida, a fideicomiso is typically simpler and more cost-effective.
What are the closing costs when buying property in Mérida or the Yucatán Peninsula?
Closing costs typically range from 4% to 7% of the purchase price.
These costs include:
Notary fees
Transfer tax (ISAI) — approx. 2%
Fideicomiso setup (if applicable)
Title search & due diligence
Certificates & appraisals
Legal review & contract preparation
Your Broker and legal team will provide an exact cost breakdown before signing.
What are the annual costs of owning property in Mérida and Yucatán?
Property ownership in Yucatán is known for its very low carrying costs.
Annual expenses include:
Property Tax (Predial)
Mérida is infamous for extremely low taxes:
$50–$300 USD/year, depending on size and location.
Fideicomiso Annual Fee
Approx. $500–$650 USD/year.
HOA Fees
Only for gated communities or coastal condos.
Utilities & Maintenance
Reasonable compared to major U.S. markets.
Optional: Property Management
For rentals (particularly on the coast).
What taxes apply to rental income and property sales?
Rental Income Taxes
Rental income is taxable in Mexico.
However, your legal and accounting team will structure your ownership to:
Maximize deductions (utilities, maintenance, management, furnishings).
Avoid double taxation through the U.S.–Mexico tax treaty.
Provide monthly tax reporting if operating through a corporation.
Capital Gains Tax on Sales
Capital gains tax applies when you sell, but with proper planning — invoices for improvements, residency status, legal structure — your notary can often reduce the taxable amount significantly
Is title insurance necessary?
While title insurance isn’t required in Mexico, it is recommended for U.S. and Canadian buyers, especially on coastal or older-title properties.
Companies like Stewart Title Mexico and FIRMA operate in Yucatán.
Your legal team will first conduct a full due diligence review to confirm a clean title and proper land use; title insurance becomes an additional layer of peace of mind.
Can I rent out my property on Airbnb or VRBO?
Yes. Mérida and the Yucatán coast are strong short-term and mid-term rental markets.
Important notes:
Confirm your HOA rules (most allow rentals).
Register for tax compliance — our accounting team handles everything.
Mérida performs well with long-term and mid-term stays.
Progreso and nearby beaches perform well with short-term vacation rentals.
How can foreigners finance a property in Yucatán?
You have several financing options:
1. Developer Financing
Common in pre-construction.
Flexible down payments.
Minimal requirements.
2. U.S.-based lenders that finance Mexico
Ideal for long-term mortgages.
Rates higher than U.S. domestic loans.
3. HELOC or Cash-Out Refi in the U.S.
One of the most popular strategies for foreign buyers.
Gives you cash to purchase in Mexico without dealing with local banking.
Your team can help evaluate the best option based on your investment goals.