Many people dream of owning property in Cabo San Lucas, one of the most beautiful beach towns in the world. Vacationers from all over the world come to this Mexican city and instantly fall in love with it. Hence, many ask, “Can foreigners buy beachfront property in Mexico?” or “Can an American buy a house in Cabo San Lucas?” The answer is yes, foreigners may buy beachfront real estate in Cabo and in Mexico!
This is possible through Mexico’s fideicomiso or bank trust system. Here’s how it works and how foreigners may own property in this paradise.
How can a foreigner buy property in Cabo San Lucas?
Mexico welcomes investments from foreigners, and purchasing real estate is among those investments. For most parts of the country, a foreign national can buy property and directly hold its deed.
But some of the most desired areas in Mexico – such as the beachfronts of Cabo San Lucas – are labeled “Restricted Zones.” These are areas within 100 kilometers of an international border or within 50 kilometers from the coast. Foreigners who want to buy a house in a Restricted Zone will have to do so under the fideicomiso system.
A fideicomiso is a long-term irrevocable trust held by a Mexican bank. This trust is similar to any ordinary bank trust in the US or Canada. Through fideicomiso, the bank holds the title of the property but cedes property rights to you. You’re given the rights to own, occupy, or remodel the property, and you can even sell it or give it to your heir if you wish. The house is yours, though you simply need to uphold the trust with the bank.
Aside from fideicomiso, another option to own property in Mexico is to create a Mexican corporation and make it the title-holder of the property. However, this is much less frequently used because it’s for non-residential property and has stringent tax requirements.
If you are from the USA, Canada, or any other country in the world and want to buy your own house in Cabo, the fideicomiso is the way to go.
Is it safe to buy real estate in Cabo San Lucas?
It’s definitely safe to own property in Cabo San Lucas. In fact, this city is popular among expats who have decided to relocate here for the long-term. You’ll find expat-friendly developments that are beachfront or overlooking the ocean, and many of them are gated communities. There are also plenty of condos along the beach with ample security.
Is now a good time to buy real estate in Cabo?
Yes, it’s a favorable time to buy property in Cabo! Real estate development has surged in this region in recent years, which means it is now prime for new residents, vacation home owners, and rental owners. Now might actually be the best time to buy because property prices are only expected to go up in the next few years.
Property taxes are much lower in Mexico than in the US. In Los Cabos, annual property tax is only 0.1%, while in California, it is 0.79% and in Texas, 1.86%! The cost of living is also lower in Mexico than that of its northern neighbors.
Owning property in Cabo San Lucas is a worthy investment, whether you’re planning to live there or rent out the property for significant long-term returns.
Get the pros to manage your Cabo property
If you’re buying a Los Cabos property as a vacation home – for you or for guests – it’s best to entrust it to a professional property management team. We at Come to Cabo Villa Rentals are accredited and highly experienced in Los Cabos vacation properties. In the last 20 years, we’ve helped numerous Cabo property owners make the best of their villas, condos, and houses.
Let’s talk about your property in Cabo San Lucas. Call 1.800.975.5569 to learn more!