We are looking to buy a house here. Actually have one picked out that we like. It is between Cancun and Playa. We plan on using it as our and our familys vacation home and renting it out when we are not their.My question is this, if you own property there does this in anyway help or speed up the citizenship process? As we also intend to retire here when that time comes. Any and all help,thoughts, ideas or responses welcome
Owning property outright is not a possibility here in Mexico, (within 50 km. of a navigable waterway or other "restricted" zone) unless you become a citizen, OR one of you was born here. In that case, just put the property in that person's name, and you're good to go. Other than that, you will have to pay what is known as a "fideicomiso," or trust to the Federal Government, which will be managed by a local bank, either in Cancun or Playa. You will then have to pay this "trust" once a year. Mine is 8125 pesos a year, or roughly $645 USD. Very reasonable when you consider property taxes NOB. Of course you will also have to pay a "predial," which are your actual Mexican property taxes, and these are a joke. Mine last year was 753 pesos, or $60 USD. My house is worth between 3 and 3.5 million pesos, if that is any help for reference purposes. However, I live in Veracruz, so.....your predial may be considerably higher. As far as "citizenship" goes, I would forget that, for at least as long as your house is only a vacation/Winter home. You can enter for 180 days on an FMT, if you just come down for a few months and then leave for the rest of the year. If in the future you decide you want to live here more permanently, I am assuming you will be applying as a "rentista," or retired person, and that you do not wish to work in Mexico. If that is the case, the best you can do for your first year, is an FM-3 visa, which is good for one year. After that, you can apply for an FM-2 inmigrado visa, also good for one year and more costly by about 800 pesos a year for renewals, than the FM-3. But it will say you are a resident of Mexico, and I have found that I am "treated better" with my FM-2, than I was with the FM-3. (Although I was never treated badly with the FM-3, either...So far, I'm talking about border checks, aduana, and the like. If you're a resident, you're more likely to get a free pass and/or less scruitiny) The drawbacks to the FM-2 is that it costs more, but only for 4 years after you have your first one. After 4 years and 6 months, you begin the process for permanent residency, and when that is granted, you are done with annual trips to INS, which in Cancun, is evidentally, a pain in the a**. In Veracruz, we have our renewals in 3 days. The other drawback is that the FM-2 places definite limits on how long you can be out of country in those 5 years total, and that limit is 18 months. I find this to be plenty liberal for my purposes, but your situation may be different. However, this is something to consider. Beyond that, there is "citizenship," and I do not profess to know anything about this. You have to be fairly fluent in Spanish, and there is an exam to take which at least up to last year, was a real bear. Some Mexican scholars could not pass it.I think you have to be a resident, before you can be a citizen, but I could be totally wrong here. There are several naturalized citizens on this forum, so they can advise.
Thanks for the response. We knew about the fideicomiso. And we were told that the yearly taxes on the house we are looking at runs around $45 USD. Very cheap considering that what we pay in the US now is around $5000. As for the 180 day FMT. Is there a limit on how long you have to be out of Mexico before you can receive a new one? Can we just cross the border for a night, or would we need to come back to the States for a few days and visit the kiddos? Also we live in Texas close to the Mexico border now, could we start the rentista process here or does this have to be done where you will actually be staying? We are looking to try and get most of this accomplished within the next couple of years. So that when it is time to make the move hopefully most everything will already be in place.
Just for your info on the Fideicomiso-Try to stay away from Banamex(part of Citibank) sicne they keep raising their rates each year to higher and higher amounts. Scotiabank is better in the long run and their rates do not increase as fast as Banamex.
We've been happy with Bancomer as well. Living in a condo, having our trust with Bancomer has been a lot easier when it comes to our annual meeting paperwork - no receipt of trust payment needed to vote.
Many condos do not demand the receipt of the trust fee to allow you to vote. That varies by the condo. If a condo has problems then they will want to see the receipt of the paid fees since that way they can control who can and cannot vote.
Not sure who is the cheapest, but Scotiabank seems reasonable compared to Banamex as far as I know and is cheaper then Banamex for the past 3 years in a row. Plus if you need the paperwork for voting at an assembly Scotiabank is easier to deal with compared to Banamex where they have no clue what they are doing and tend to lose papers constantly the last minute before the assemblies. I do not know how Bancomer or other banks rate comprably to Banamex or Scotiabank.
as the owner of a house in cancun and the vast over supply of housing in Cancun I am not sure that now is the best time to get in. Of course you could be buying at the bottom but, I would assume that you would be able to find great rentals for yourself and would not rely on any rental income as part of your payment structure.
We bought our Cancun Casa three years ago. Here are some links that we found helpful: http://www.paseroabogados.com/realestate3.html http://www.playarealtyexecutives.com/Mexico_Closing_Costs/page_1806599.html http://www.settlement-co.com/closingcosts.htm http://www.mexicolaw.com/LawInfo05.htm http://www.mexicolaw.com/Nafta.htm http://www.mexicorealestateinfo.com/legalinfo.asp http://www.cancun-webs.com/cancun_legal_services/inicio.htm http://www.mexicorealestateinvestment.org/ US and Mexican Taxation: US Tax Return Filing Requirements for Fideicomisos There's also great info here at this site that can be found via the Search function. Another thing too to be aware of is that if you rent your property out, while as a US citizen the income/expense will be claimed on your US income taxes, you also are suppose to file a Mexican income tax form even though no tax would be due.
