As a foreigner in Mexico, you cannot buy a land or property that has only rights of possession or has no deed. If the property is ejido, which is a tribal land owned jointly by a group that is not able to sell it to you, you cannot buy that. So if you’re a foreigner wanting to buy real estate in Mexico, you have to make sure that it has a title and that it can be transmitted to you. Also as a foreigner, you cannot buy land within a certain distance of a border or the ocean.
There are federal zones. If you buy a property close to the lake, there is a property between the lake and your house that is called a federal zone. You cannot buy that but you can get a concession, which means nobody can get that part because you have the permit for it. As an example, in Lake Chapala, there are properties close to the lake that are owned by Mexicans and there are properties owned by foreigners. All of them have to get permits for the land in the federal zone. The rules are the same for foreigners and locals. The only difference is that if you are a foreigner buying real estate in Mexico and you want to avoid paying capital gains you have to have a temporary or a permanent residency, a tax number, you have to prove that you’ve been in Mexico for a certain period, and you have to show receipts of bills paid under your name, and you can’t have sold a property in the last 5 years. If you have sold a property in the last 5 years, you cannot avoid paying capital gains. If you do not have a residency and you are a foreigner, you cannot avoid paying capital gains.
(House on the Pacific at Cuyutlán, a favorite destination for residents of Lake Chapala, Mexico, three hours away, pictured.)