Types of Real Estate Contracts in Mexico: Which One Is Right for You as a Foreigner

Mexico’s real estate legal system has its own particularities, and foreign buyers who understand them are at an advantage. From the fideicomiso (bank trust) to the different types of purchase agreements, each legal instrument has specific implications in terms of rights, costs and flexibility. This guide explains the main types of contracts you will encounter in the Riviera Maya real estate market.

The fideicomiso: the key structure for foreigners in coastal areas

The Mexican Constitution states that foreigners cannot directly own land located in the restricted zone (within 50 km of the coastline and 100 km of the borders). This restriction is overcome through the restricted-zone fideicomiso, also known as a bank trust.

How does the fideicomiso work?

In a fideicomiso, a Mexican bank acts as trustee (legal titleholder of the property) for the benefit of the foreign buyer (the beneficiary). The foreigner holds all rights to use, rent and sell the property, while legal title is held in the bank’s name. Fideicomisos are set up for 50-year terms and are renewable indefinitely. The annual trust fee ranges from $500 to $700 USD depending on the bank and the value of the property.

Rights of the beneficiary

The beneficiary has the right to: use the property freely, rent it out (including on platforms such as Airbnb), sell it (by transferring the trust rights), pass it on to designated beneficiaries, and modify it with the corresponding municipal permits. In practical terms, these rights are equivalent to those of a direct owner.

Direct purchase agreement (for Mexican nationals or Mexican companies)

Foreigners who incorporate a Mexican company (Sociedad Anónima or SRL) can acquire property in the company’s name without the need for a fideicomiso. This option is popular with investors planning to buy multiple properties or for commercial-type developments. However, it involves the costs and obligations of maintaining an active Mexican company.

Pre-construction promise-to-purchase agreement

The promise-to-purchase agreement (contrato de promesa de compraventa) is the instrument used for sales of properties under construction (pre-construction). It sets out both parties’ obligations toward the future final purchase agreement. It does not transfer ownership, but it obliges the seller to sell and the buyer to buy under the agreed terms. It is essential that this contract include penalties for breach by either party.

Essential elements of a pre-construction contract

A solid pre-construction contract should include: a detailed technical description of the promised property, the total price and payment schedule, the delivery date with penalties for delays, specifications for materials and finishes, termination and capital refund conditions, and a mechanism to protect payments (escrow or a guarantee trust).

Lease with option to purchase

This arrangement, less common but available in the market, allows a prospective buyer to lease a property with the option to acquire it within a set period. Part of the rent paid is applied to the final purchase price. It is useful for buyers who want to get to know a property well before committing, or for those who need time to arrange financing.

The role of the notary in Mexico

In Mexico, the notary public plays a fundamentally different role than in other countries. They are a state-appointed legal professional who gives public faith to legal acts. All real estate transactions must go through a notary to be fully legally valid. Closing costs (notary fees + property acquisition tax + other expenses) typically amount to between 5% and 8% of the property’s value.

Total costs of a real estate transaction in Mexico

To plan properly, you should factor in all transaction costs: notary fees (1–2% of the value), property acquisition tax (2–4.5% depending on the municipality), deed registration costs, the cost of setting up the fideicomiso ($1,500–$3,000 USD), recording fees at the Public Property Registry, and fees for the attorney who reviews the contracts.

Conclusion: the right legal structure protects your investment

The Mexican real estate system is completely safe and functional for foreign buyers when navigated with knowledge and the right professionals. The fideicomiso is a proven instrument that thousands of foreigners have used successfully for decades. At L’Agence by Los Socios, we connect our clients with the best notaries and real estate attorneys in the Riviera Maya.

You may also be interested in: Safety in the Riviera Maya: What You Really Need to Know as a Foreign Buyer and How to Manage Your Airbnb Property from Abroad.