The process in Mexico is different – in a great way

Your offer was accepted! Owning a home in Baja was not only a dream of yours but a well-researched retirement strategy too. But even with all the information you have gathered about ownership in Mexico, you might have been unprepared for how different –and convenient, the process is here. From property taxes to the way the Bank Trust is set, everything works favorably for the homeowner and makes for an easy inheritance process too.

Heirs and beneficiaries

While filling out paperwork for a Bank Trust, one question probably struck you as odd: Beneficiary? Why do I need a beneficiary? It comes as a pleasant surprise to many Americans to know that in Mexico there is no Inheritance Tax (or “Death Tax”, as it´s known in the U.S.). Here, your beneficiaries are written into the Trust. In the event of your passing away, the Trust is transferred straight to these beneficiaries. Your U.S. Last Will and Testament does not have jurisdiction over properties located in Mexico.

In the case of a married couple with both on the title, there is a right of survivorship, where the property will go to the surviving spouse. If both of you pass away, the property goes to your second beneficiary. The process is very simple for the heirs. A Mexican Notary can help through the paperwork (Remember, these Mexican “Notarios” are government-appointed attorneys, and all legal transactions must be signed in front of them.) Be aware that the Notary is also responsible for transferring title from one person to another.

The idea of a custom-built house in Rosarito can be very attractive. It means that you can dictate the layout and create a space that meets your specific needs.

Some of our clients have the erroneous idea that building a house in Baja may be more inexpensive than buying it. However, that is not necessarily true. One thing is certain: building in Mexico is far more affordable than building in the U.S. It may also be easier on your wallet since you can add rooms and upgrades as you go.

However, there is a lot to know before taking on a construction project in Mexico, so here are some tips that have helped our clients:

FINDING THE LOT
The importance of hiring a knowledgeable agent to find your piece of land can´t be stressed enough. The worst scenario for an aspiring homeowner in Baja is to find himself with a piece of ejido (land ceded to farmer groups by the government), pending liens, and/or the wrong land use.

As the Baja real estate market is on an upswing, so are prices, especially in the under $200,000 price range. While medium-priced homes in Rosarito are not seeing a big increase in price, they are selling. In the under $200k price range, inventory has slowly been increasing in price, and many buyers looking for properties are having to increase their housing budget to $250,000 and up.

An example of what´s happening in this price range is Calafia Resort and Condo where prices have gone up a little. The condos are still fair priced, and are not feeling the crunch of the market crash in the last few years.

The marked improvement in the market has brought on a sense of urgency. People who at one time would have taken a more relaxed attitude towards buying a home in Rosarito are now getting serious -some even looking at multiple purchases. In other words, the smart buyer is recognizing Mexican real estate as an investment and is nesting in the area. As a result, many homeowners are taking their homes off the market, looking for a long-term investment as well.