Closing Costs in Mexico are very different than what the US or Canadian Citizen would be used to paying when purchasing a property in their home country. In Mexico, the closings costs associated with purchasing property are assessed to the buyer. They are not a shared cost between buyer and seller and the fees are not negotiable.
In the example below where the purchaser is obtaining a NEW Trust Deed on the $2,000,000 purchase, closing costs average 4.3% While the $100,000 purchase the closing costs average 9.2%. This is because some of the fees are a flat fee or a fee based on a percentage of the purchase price.
There are fees that apply when the buyer is obtaining a new 50 years Trust Deed / Fideicomiso such as the Application and Permit Fee and the Foreign Investment Registration. If the seller has a Trust Deed in place already and beneficial rights are being transferred from seller to buyer the Application, Permit Fee and Foreign Investment Registration would not apply. If the buyer is taking the title in an Escritura (the Mexican National’s Deed) then no trust fee applies as there is no trust bank involved for the buyer. However, if the seller, in that case, has a Trust Deed / Fideicomiso then there will be a cancellation fee of the Trust Deed assessed to the seller.
CLOSING COST EXAMPLE: A $2,000,000 property purchase with a new 50 YEAR TRUST DEED
Application & Permit Fee: $1,200.00
Foreign Investment Registration: $700.00
Appraisal Fee: $550.00
Title Insurance: $14,000.00 (this fee is optional)
Notary Fee: $20,000.00
Acquisition Tax: $40,000.00
Public Registration: $6,500.00
Certificate – No Liens: $35.00
Certificate – Property Tax: $10.00
Fiduciary Acceptance Fee: $440.00 (may depend on the trust bank)
Fiduciary First Annual Fee: $440.00 (may depend on the trust bank)
Closing Company Fees: $1,800.00 (to $2500 this fee varies depending on the closing company chosen by the buyer)
IVA Tax: $198.00
Telephones, Courier, Misc: $150.00
Total Cost: $2,086,023.00 (property purchase and buyer closing fees)
CLOSING COST EXAMPLE: A $100,000 property purchase with a new 50 YEAR TRUST DEED
Application & Permit Fee: $1200.00
Foreign Investment Registration: $700.00
Appraisal Fee: $265.00
Title Insurance: $700.00 (this fee is optional)
Notary Fee: $1,000.00
Acquisition Tax: $2,000.00
Public Registration: $325.00
Certificate – No Liens: $35.00
Certificate – Property Tax: $10.00
Fiduciary Acceptance Fee: $440.00 (may depend on the trust bank)
Fiduciary First Annual Fee: $440.00 (may depend on the trust bank)
Settlement Company Fees: $1,800.00 (to $2500 this fee varies depending on the closing company chosen by the buyer)
IVA Tax: $198.00
Telephones, Courier, Misc: $150.00
Total Cost: $109,263.00 (property purchase and buyer closing fees)
Other fees that apply are the Escrow fee which opens the account for where the buyer’s funds will be held until the closing date, this fee depends on the escrow company but averages about $750 us dollars. This fee would be referenced in the buyer’s Offer To Purchase Contract.
The Notary fee is based on the purchase price typically 1% but has a cap limit at $2,000,000 which means the notary cannot charge any more than the fee of $20,000 on property purchased at a higher price point.
There may also be a reverse capital gain assessed. This happens when the appraiser performs the requisite municipal tax appraisal to determine the accurate cost basis of the property from the assessment of both the acquisition tax and the future property tax payments. This is not a commercial appraisal and does not meet or provide comparative market information or analysis.
What you see in the examples above are the standard fees applied to a cash purchase with no financing involved.
**NOTE fees are subject to change and may depend on the closing agency, attorney, notary or applicable Mexican law regarding charges for Real Estate closings.
