Owning Puerto Vallarta real estate is a dream for many. According to Mexican government data, ‘living place’ is the number one reason local foreigners immigrate. However, buying a home is not easy for anyone, especially as a foreigner in another country.
Navigating the ins and outs of Puerto Vallarta real estate can be tough, and as trusted property managers in Puerto Vallarta, we are here to help. Keep reading for our list of the top 5 things every Puerto Vallarta real estate investor or homeowner should know.
1. Opening a bank account in Puerto Vallarta
Can foreigners open a bank account in Mexico? The answer is yes. Every Puerto Vallarta real estate owner should consider opening a bank account in Puerto Vallarta. All you will need to open a bank account in Mexico is your passport, proof of address, your tourist card (FM3) that is given to you upon arrival at the airport and a minimum of three thousand pesos to open the account. We recommend banks such as Bancomer and Banorte for bilingual support.
2. The ins and outs of property taxes in Mexico
What are the property taxes in Mexico?
There are two main types of property taxes in Mexico:
Transfer Tax: A 2% acquisition tax, payable by the buyer when the property changes ownership. This is part of the closing cost.
Property Tax: This is called a predial, and the average cost is approximately 0.1% of the assessed value of the property at the time of sale
How do you send property taxes in Mexico?
Wire transfers are the most common and secure way to send property taxes in Mexico. If you are an international Puerto Vallarta real estate owner making payments with a non-Mexican bank account, we suggest regularly keeping an eye on exchange rates, bank fees and other associated costs.
3. How to navigate Restricted Zones in Mexico
The Mexican Constitution has outlined specific zones in which foreigners are discouraged to buy property in Mexico. These areas are called ‘Restricted Zones’ and they aim to prevent international real estate investors and homeowners from buying property there.
These restrictions are within a certain number of kilometers from coastlines and borders. If you are looking to invest in Puerto Vallarta real estate, the Constitution states you will need to be within 50 kilometers from the coastline.
However, don’t be discouraged. A Restricted Zone does not necessarily mean you cannot own property there. It just means that you will need permission to do so through a trust agreement called a ‘Fideicomiso.’ A Fideicomiso allows you to prove that you are investing in an asset for lawful purposes and The Foreign Investment Act allows foreigners to act as beneficiaries to a Mexican trust.
4. How to get a Fideicomiso in Mexico?
If you are looking to buy Puerto Vallarta real estate by the coastline, you will need to get a Fideicomiso from the Department of Foreign Affairs. This will allow you to set up a trust with a bank. Similar to home ownership in the United States and Canada, the bank will hold the legal title to your property while you can enjoy the benefits of home ownership.
5. Finding a property management company in Puerto Vallarta
If this is your second home, or you are a Puerto Vallarta real estate investor who plans to invest in multiple rental properties, it is important that you find a trusted property management company that can manage your short-term rental administration.
Puerto Vallarta property management companies like Naya Homes will not only maximize your returns through sophisticated data-driven revenue tools but they will also handle all of your vacation rental administrative tasks:
5. Getting involved in the local community: Puerto Vallarta events and activities
Puerto Vallarta has a thriving community of expats and there are many ways to get involved in Puerto Vallarta events. Whether you’re looking for a night out, joining a club or participating in one of the many water sports the area has to offer, Puerto Vallarta is full of exciting opportunities to connect with likeminded people and immerse yourself in the local culture. Puerto Vallarta's official events website is a great resource that will tell you exactly what is going on every day of the week.
Puerto Vallarta is generally a safe place to live. However, as with any city, it's important to be aware of your surroundings and take precautions to keep yourself and your property safe. It's also a good idea to familiarize yourself with the local laws and customs.
The cost of living in Puerto Vallarta can vary depending on your lifestyle and the neighborhood you choose to live in. However, in general, the cost of living is lower than in many cities in the United States and Canada. Housing and groceries are generally affordable, while dining out and entertainment can be more expensive.
Thinking about renting your property on Airbnb or other online booking sites? Contact Naya Homes to see how our data-fueled revenue management and property management can help maximize your returns.
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