If you're an American considering buying a home in Cabo San Lucas or elsewhere in Los Cabos, one of your first questions may be surprisingly simple: Can Americans actually own real estate in Mexico?
The answer is yes.
Americans regularly purchase homes, condominiums, villas and luxury properties throughout Cabo San Lucas, San José del Cabo and all the other towns of Baja California Sur. The process is different from buying property in the United States, however, and understanding those differences before you begin can make the experience much easier.
Can Americans Own Property in Cabo?
Yes. Foreigners can legally acquire real estate in Mexico.
The important distinction for Cabo is its location. Under Article 27 of the Mexican Constitution, foreigners cannot hold direct title to residential real estate located within 50 kilometers (about 31 miles) of Mexico's coastline or 100 kilometers (about 62 miles) of an international border.
This area is known as Mexico's Restricted Zone.
Because Cabo San Lucas and the surrounding Los Cabos region are within the coastal Restricted Zone, an American purchasing residential property here will generally acquire the property through a fideicomiso, commonly referred to as a Mexican bank trust.
What Is a Fideicomiso?
A fideicomiso allows a Mexican bank to hold legal title to the property as trustee for the foreign purchaser, who is named as the beneficiary of the trust.
While this may sound unusual to an American buyer, the fideicomiso is a well-established legal structure specifically provided for foreign ownership within Mexico's Restricted Zone.
To see more detailed information about this and how the Fideicomiso protects foreign buyers, check out our BLOG about the Fideicomiso!
A fideicomiso can be authorized for a term of up to 50 years, and Mexican law provides a process for extending its duration.
What Types of Cabo Real Estate Can Americans Buy?
American buyers can acquire a wide variety of residential real estate in Los Cabos, including:
- Luxury homes and villas
- Condominiums
- Beachfront and ocean-view properties
- Golf course residences
- Vacation properties and second homes
- Homesites and land for future construction
- Properties within private and gated communities
From Cabo San Lucas and the Cabo Corridor to San José del Cabo, Todos Santos and the East Cape, each area offers a different combination of lifestyle, amenities and real estate.
What Does the Buying Process Look Like?
Although every transaction is different, purchasing real estate in Cabo as an American will generally involve finding the property, negotiating and executing the appropriate purchase utilizing an Offer to Purchase document, conducting due diligence with the help of a solicitor, establishing or transferring a fideicomiso when required, and completing the transaction before a Mexican Notario Público.
For further protection to the buyer, all deposit funds and final funds are protected by an escrow service; these American companies hold all funds in a US bank prior to the final closing.
Buyers should work with experienced local professionals and obtain appropriate independent legal and tax advice for their individual circumstances.
What Should Americans Budget for Closing Costs?
Closing costs in Mexico can be higher than many American buyers initially expect.
In addition to the purchase price, buyers should budget for expenses that may include property acquisition tax, notary fees, Public Registry fees, appraisal and certificates, escrow expenses, fideicomiso setup and government fees, as well as optional legal representation and title insurance.
The exact amount varies significantly by transaction, so buyers should request a detailed closing cost estimate. Please see our BLOG about closing costs for more detailed information on what to expect.
Is Buying Property in Cabo Safe for Americans?
Thousands of international buyers have purchased property throughout Los Cabos, but—as with any significant real estate investment—the quality of your due diligence matters.
Buyers should verify title and ownership, understand any liens or encumbrances, review condominium or HOA documentation when applicable, confirm the property's legal status and use experienced professionals familiar with Los Cabos real estate transactions involving foreign buyers.
Why Are Americans Buying Real Estate in Los Cabos?
For many Americans, Cabo offers a lifestyle that's difficult to replicate at home: warm weather, beaches, golf, boating, fishing, outdoor living, luxury communities and convenient air connections to many major U.S. cities.
Some buyers want a vacation home. Others are looking for a seasonal residence, investment property or eventually a full-time home in Mexico.
And because Cabo San Lucas and San José del Cabo offer distinctly different lifestyles—as do communities such as Palmilla, Cabo del Sol, Quivira, Pedregal and Puerto Los Cabos—buyers can choose a location that closely matches the way they want to spend their time here.
Buying Real Estate in Cabo as an American
So, can Americans buy real estate in Cabo San Lucas? Absolutely.
The key is understanding how property ownership works in Mexico and surrounding yourself with knowledgeable professionals who can help you navigate the process.
At Luxury Cabo Properties, we work with American, Canadian, Mexican and international buyers throughout Los Cabos and Baja California Sur. From helping you understand the different communities to finding the right property and coordinating the steps involved in your purchase, our goal is to make buying real estate in Cabo as comfortable and straightforward as possible.
And if you're just beginning your search, ask us for our “Everything You Need to Know About Buying Real Estate in Cabo” guide. We'd be happy to send you a copy.
Written by Carol Boniuk-Los Cabos Real Estate Specialist.
This article is provided for general informational purposes and does not constitute legal, tax or financial advice. Buyers should obtain advice from qualified Mexican legal, notarial and tax professionals regarding their individual transaction.
