Los Cabos set a new record for the annual growth in housing prices as the third quarter of the year came to a close. In Los Cabos, property prices climbed overall by just over 14%. demonstrating that the COVID blues have been overcome by the local real estate market in the area.

The majority of buyers in the Los Cabos real estate market are unquestionably Americans and Canadians. In fact, prices for Cabo real estate are frequently shown in dollars rather than Mexican pesos. According to popular belief, Americans are swarming to Cabo to buy second houses because the prices there are better than those in other areas.

• Living Costs Are Cheaper In Los Cabos Than in other Canadian and American cities
• More Affordable Amenities Also Drive People To Los Cabos   
• Access To High-end Luxury Housing 
• Home Prices In Los Cabos Are More Affordable Than in other areas in Canada and the U.S

Source: The Cabo Sun

The Berkshire Hathaway HomeServices 2022 Global Luxury Landscape Report explores some of the most significant trends influencing the luxury real estate market around the world and examines what’s on the horizon for luxury lifestyle pursuits. 

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The star of the Baja State, located right at the midpoint between the Pacific and the grand Sea of Cortez. Cabo San Lucas is as magnificent as it is filled with lovely communities, opportunities, and growth.

Experiences abound at San Lucas, so much so that it may seem a tad overwhelming to digest or even write down at your trusty bucket list, but don't worry, I'll be sure to give you a quick run-through of Cabo's most promising bullet points. From its eateries to its top-of-the-line residential communities, once you're done skimming through you'll be as ready for Cabo as you can get.

Good Food and Good Drinks 24/7

Cabo's renowned for its wide variety of top-quality restaurants, of all price ranges. Whether you're looking for affordable, seafood get-togethers at Omega Grill or Maro's Shrimp House, or perhaps looking to impress at the high-end Ardea Steakhouse, you can rest assured that there's something fit for you at San Lucas.

Crystal Clear and Sunny Year-Round

With crystal-clear waters and pristine, white sands, the sweeping vistas of Cabo's swimming beaches are nigh unmatched in the matters of spending an afternoon of full relaxation and unwind. All the options on offer are great, but if it's the best you're looking for, then you can't get any better than Chileno Bay, the swimmable beach of the San Lucas area.

Tours Here, Activities There, Non-stop Fun Everywhere

Thrills or laid-back chills, whatever you enjoy the most, you can bet that Cabo's got you covered. Want to take a splash and bask in the epic-scale aquarium that is the Pacific? Then a diving or snorkeling guided tour is the right fit for you. Fancy testing your skills at hauling big prize-winners? Sign-up for Cabo's world-renown fishing tournaments! Maybe you're more a fan of taking pictures of the coastline, the wildlife and especially of the one-and-only arch. In that case, you really can't go wrong with one of Cabo's many boat tours. Lastly, if extreme is more your speed, there's plenty of ATV and parasailing activities for you to enjoy.

Wide renowned for its timeless colonial-style buildings, fine cuisine, and calm beaches, San Jose del Cabo is a time capsule of the finest caliber, keeping the best of the old times and mixing it in with the best of the new. Keep on reading and see what San Jose's got to offer!

Natural Sights, Beaches, and Adventures Aplenty at San Jose Del Cabo

The old reliable-s of the Baja beach locations are, of course, ever-present: water sports, fishing, cruise tours, golf, wildlife sightseeing, pristine beaches, and so on and so forth. Eco-tourism is one of San Jose's main gigs for a reason.

You'll find just as much to see and do on-water as you'll do on land, basking in the sights of the Palmilla Beach (ranked high up along with Medano), deep diving in the crystal clear waters of the coast, and living out unforgettable moments at the wildlife sanctuaries of the nearby areas. There's an adventure to be found around every corner of San Jose del Cabo.

Opportunities at Palmilla

Having one of the best beaches around is one thing, having the Sea of Cortez nearby is another, but having a pair of booming residential communities is something else entirely. Established by the Del Mar development right next to the original Palmilla Hotel, the Villas Del Mar and the Espiritu del Mar communities are well on their way to becoming the most exclusive beach club residential in Baja.

With a 27-hole Nicklaus designed golf course, 5-star restaurants and direct, blue flag access to the beach (one of the only 3 available blue flag beaches in Cabo, period), you can rest assured, any investment at the Del Mar developments is well worth your time, effort, and money.

Golf and Luxury Lovers, Rejoice at Querencia

One of the top multi-million-dollar investment spots in Cabo, and for good reason. Querencia's a 900-acre spanning private golf community sitting at the tip of the San Jose side of the corridor, and it's as brimming with natural vistas as it is with luxurious home projects left and right. If it's bragging rights you're looking for you can't do much better than this.

Sustainable Comfort at Montage Los Cabos

If being green is more your thing, then be sure to schedule a tour for Montage Los Cabos. Located along the Cabo Corridor, this premier community--a subset of the ever-growing Twin Dolphin project, is not only a perfect showing of catering to the every need of home owners, but also to the conservation and sustainability efforts of the Baja area. The best of both worlds!

Enjoy the Lavish Goodness of Punta Ballena

Near 200 acres of high-end luxury, world-renowned spa and boutiques, and a 57-room hotel filled to the brim with lavish amenities, all that and more defines Punta Ballena, a jaw-dropping development located north of San Lucas, along the corridor. Don't wait around, and make one of its fully-furnished residencies your own.

The Family-Pick Santa Carmela

Thanks to it's proximity to Baja's finest schools, and with it being a beachfront enclave, Santa Carmela is the top pick for families looking to settle at the Baja. With over 80 single-family homes and lots on offer, a beachfront clubhouse, common area pool and tennis courts, Santa Carmela is the right fit for you and your family!

Enjoy the View at Cresta del Mar

Luxury homes, a rocking view of the Sea of Cortex, and a comfortable location at the foothills north of Cabo San Lucas. You really can't go wrong with Cresta Del Mar, more so because it's still relatively recent, so there's still plenty of purchasing options available.

Find Paradise at Rancho Paraiso

Like your privacy? Then try Rancho Paraiso! Located north of San Lucas, this custom-built, private home development is the go-to for those looking to get themselves a piece of paradise, or in layman's terms, a huge house atop the hills with a panoramic view of the Sea of Cortez.

Walking Distance and Privacy at Las Ventanas del Cabo

Located at the San Jose part of the corridor, nestled in a natural, contouring slope, positioned ever-so-cleverly between San Jose and Cabo, Las Ventanas del Cabo is a luxurious resort that seems to be in the middle of it all. You won't have to worry about late appointments at Las Ventanas, whether it's a business meeting at the Cabo Real Golf Course or a Sunday get-together at Chileno Bay.

An Incomparable View at Vista Vela

Vista Vela has the many selling points of your general, beachfront Cabo residential community: luxurious amenities, a pristine beach. Now, that's great and all, but how's an overlook view of the Cabo Arch sound to beef up the resume? Nothing quite like waking up to a landmark I tell you.

The deal for your dream vacation home in an exotic country is done…well, almost done anyway. You still have to take account of closing costs. Of course, closing costs aren’t the same here as they are over there, so I’ll be a real nice blog writer and give you all a quick run-through of what goes down, down here, that way you don’t have to worry about rough translations or misunderstandings during payoffs. So let’s get to it.

General Outlook of Costs

First off, before getting into specifics, let’s talk amounts, and more importantly, money. Closing costs usually vary anywhere from 5 to 7 percent of the property’s purchase price, this includes:  the covering of title insurance, bank trusts, real estate commissions, government permits, notary fees, title search, and transfer taxes. A bit winded a list, but you must remember that unless you pay up all these expenses, you won’t obtain a registered title. So do take that into account. Now onto the list:

Appraisal and Acquisition

Acquisition (otherwise known as Transfer Tax) makes up the major bulk of the expenses, about 2% of the property’s value. Appraisal on the other hand is made by a government appointee, with a cost range from 250 to 1000 USD  per parcel (depending on property value), which includes the fees charged by the property tax department for authorizing said appraisal, and the fees for the appraiser’s services.

Bank Trust and Fees

There’s two ways you can go about a bank trust, either the property already has one (put on by the seller), or there is none. For the latter, you’d be in luck, because you only need to pay the bank transfer fees, beneficial rights and the registration on the Foreign Investment Registry. This clocks in at about 440 USD. 

If we’re talking the former then you need to acquire a permit from the Secretary of Foreign Relations to make one. Said permit must mention the intent of use for the property (development project, vacant lots, the amount of money involved, and so on), and usually goes for about 1200 USD.

If the title of the property happens to be in a bank trust you will be looking at annual fees to pay off the administration of said trust. These go as little as 350 USD to upwards of 550 USD. However, do try to keep sharp because banks don’t send annual statements most of the time, so it’s up to you to keep up and avoid any form of past-due-date penalties.

Title Search and Insurance

A title search shows the history of the property, so any liens, easements, important, nitty-gritty details will be fully detailed in the document. This not only helps you know exactly what it is you’re buying (and what might need to be re-tooled or fixed up) but it’s also necessary for any kind of institutional financing and title insurance. So when you find a property that you like, do make an effort to get the title search. The cost clocks in at about 400 USD but it’s worth it.

With a proper title search, now you’re looking at the possibility of getting yourself a title insurance. These cost about 5 to 7 USD per 1000 USD of the property’s purchase price and come in the varieties of:  American, Stewart and Fidelity Title Insurance policies. 

Capital Gains, Property Tax and Settlement Costs

Capital Gains Tax falls on the seller’s side of things, and to explain it succinctly: it’s either 34% of the net profit (based on the registered amount during purchase), or 25% of the gross sales without deductions. 

As for property taxes, it’s simple enough. It’s more so a way of handling taxes than an actual tax in of itself, and it means that all taxes must be paid before closing, unlike the US.

Now we’ve got settlement costs. These are pretty straightforward as well, and take services provided into account, such as: tax payments, supervision, coordination of permits, and other details necessary to obtain a full legal title. The exact cost varies depending on the purchase price.

Notario Fees

As you probably know by now, you must finalize all your real estate transactions in the presence of a Mexican notario (public notary), whose services usually fall in the 1000 to 1200 USD range, depending, of course, on the value of the property.

IVA and Other Closing Costs

IVA might sound too foreign an acronym, but it’s just another tax, an added value tax. This specific tax adds on to the service fees (anywhere from 10-16% extra) of any professional involved in the transaction, such as the notario and the appraiser. This specific tax only applies in commercial real estate.

Beyond that, there are several other minor fees and taxes (for buyers) you might need to go through, but if we’re talking important, then that’s definitely the Federal Maritime Assessment.

To make a long story short, the FMA (Federal Maritime Assessment), is your only way to purchase beachfront property in Mexico. It won’t be a full property but it’s the next best thing, a concession for use. The costs for this are handled as yearly expenses, and clock in at about 7 USD per square meter (if unimproved) and 23 USD per square meter (if improved). 

That’s it! Confirmation of documents aside (Apostille), that’s all there really is to know about closing costs. These may turn out bigger tasks in practice than in theory, of course, but viewing things in perspective always helps to make it feel like less of a chore and more of a straightforward process you’re going to get over with eventually. 

It also doubles up as a very functional “security” checklist. If any of these costs aren’t mentioned by a seller or during the transaction, you might be looking at a fraudulent scheme, so it’s best for you to double-check and see where their priorities lie. 

It’s better to know the rules, that way you can tell who’s breaking them. As always, keep sharp and keep at it!

Taxes are a part of everyday life, for as much as we’d prefer otherwise, so we might as well know them and know how to deal with them. After all, they’re only taxes, right? Sure…but what about foreign tax laws? Foreign, real estate related tax laws? Now, now, there’s no reason to panic, it’s nothing a quick run-through and point by point explanation can’t fix. So sit back, relax and see how the numbers crunch this side of the border, the four different ways:

Income Tax

The big difference between residents of Mexico and foreign investors, like yourself, is that Mexican residents must register in Hacienda (the IRS equivalent) and report their income. You, however, do not have to meddle with Hacienda or anything of the sort you only have to worry about your own tax service company.

With that said, you must declare any income generated in Mexico, but these tax payments can very well become deductions if you know how to work things out. Make sure to check with your accountant to get the most out of them.

Facturas

A factura is the way any authorized expense can become a deductible. How? The taxpayer (let’s say, yourself in this case) must first obtain said factura. This special receipt must be printed by a government-authorized establishment, which must contain the ID of the taxpayer and/or the company issuing the receipt. 

Some of these companies might ask for some extra if you ask for a factura, but remember, that’s money well-spent, and it’s also the way they can calculate the tax amount due on the sale of the property.

Capital Gains Tax (Sellers)

If you happen to be a seller on Mexican soil, Capital Gains Tax is something you really need to consider. This type of tax is owed on the profits you make off a sold property, by contrast, when you’re a buyer your actions when purchasing a home will lead to future tax consequences (i.e. more money spent).

Reverse Capital Gains (Buyers)

This one you’ve probably never heard of, but it’s best you know about it. This specific kind of tax, otherwise known as “paid by the buyer”, applies when someone sells his or her property at a loss of 10% or more. This percentage should be open-information when it comes to the pricing of the property, but you should still double-check with your realtor, for safety’s sake.

There you go. All the different kinds of taxes you may find in the neighboring country; demystified and packed up in a manageable, bite-sized reading package. So go ahead and start planning your next real estate business venture, because there ain’t nothing to be afraid of, except for shady, too-good-to-be-true type deals, do watch out for those.

As always, stay sharp and keep your head on the game!

With the influx of North American investments, Mexico is always looking forward to making things a little bit easier for you! A little bit easier to finance, a little bit easier to loan, and a little bit easier to buy. But how, exactly? Well, keep on scrolling and find out the five ways your neighboring country looks after you:

 Through a Fideicomiso de Garantia 

When it comes to home financing, no one will deny that it can be very difficult to qualify for a loan, and that it can get very expensive, more so if we’re talking vacation homes. Not it Mexico though, at least not as of recent years (9-10 years as of time of writing). The Fideicomiso de Garantia or “Guarantee of Trust” is the Mexican equivalent of a deed trust, meaning that it allows you to have a non-judicial foreclosure and a private sale, instead of having to rely on traditional mortgage.

Time periods to retake possession from a loan through this method can go as low as thirty days, believe it or not, and if you do obtain a loan for a property in Mexico, you will get a deduction on your Federal Income Tax, namely a Form 1099 Mortgage Interest Statement. A sweet deal if I do say so myself.

Through Home Equity Loans

One of the easiest ways to get the funds for a vacation home. Closely related to this are Fractional Ownerships, which means shared use of the property, thereby lessening the costs, though it is highly recommended that you get a very, very carefully worded contract for this one (as well as trustworthy people willing to invest in the project).

Through Seller Financing

Being a seller gets you the benefits of a long-term payout with a higher interest rate. Why? Sellers own properties, free and clear, unlike more traditional ownerships. This method also lightens the load, so to speak, since a third party holds the title documents and collects, records  and distributes the funds, so not only is it beneficial, it’s also quite practical. 

Through Title Insurance

Title insurance is just as viable in the US as it is in Mexico. It may cost more and take longer (seven to ten weeks compared to the US’s one to five day window) but it is the next best thing, and let’s face it, having some peace of mind after what is likely to be a lengthy purchasing, contract signing process is never a bad thing to have. With all the important files (records, easements, liens, etc.) of your property, processed, archived and protected by the Mexican law firm, worrying about title insurance will be the least of your concern.

Through Optimized and Computerized Property Valuation

Bit by bit Mexico is catching to the US real estate scene when it comes to the online, comparative market. This means that fairer and more consistent pricings (by virtue of online databases being shared by all sorts of real estate companies) are steadily becoming the norm. So any project that falls outside said norm will be easier to spot, now whether that’s a good or a bad thing is entirely up to the project itself and your ability to tell proper practices from shady ones, but at least you’ll be able to recognize outliers more often.

There you have it, a quick run-through for the different ways you can make your property purchasing process easier in Mexico, if not more manageable. It’s all about knowing the rules of the playing field and using them to your advantage, so find the one that best works for you and go for it, there’s deals waiting right around the corner!

Picture this: you’ve found it, the deal of your dreams, a promising, if not downright fantastic, property in Mexico, awe-inspiring sights, price, you name it. You go ahead and start the process: you find your people, you make transactions, you sign the paperwork, it’s all fine and dandy! Until you realize that, perhaps, you ignored some of the fine prints. Maybe you didn’t bother to check what kind of contract you were signing, or worse, it was in Spanish and the agent didn’t bother to give you a translation. 

I haven’t even gotten to the consequences bit, and it already sounds like something straight out of a horror movie, doesn’t it? Well it’s real alright, and it’s happened to a lot of people. So what to do? How do you not become yourself material for a shady real estate contract campfire story? 

Keep on reading, because I’m about to tell you the five necessary parts you need to check off any legal real estate contract:

A Real Estate Contract requires Competent Parties Always

This boils down to both the buyers and the sellers being mentally able (sane), and free of any mind-altering vices (alcohol, drugs). This also includes people that don’t know Spanish, so if you don’t know Spanish it’s best to get yourself a translator for these kinds of deals. You might be able to arm-twist your way into an English variant of the contract, but the nation’s language will take precedence over it should any legal issues arise, so take that into consideration.

A Real Estate Contract requires a Lawful Objective

Straightforward and self-explanatory. If the intent is to set up any form of illegal business, the contract can and will be voided.  Also as a little tip from me to you, if the person trying to sell you the property doesn’t have anything to prove the ownership of said property, then you should steer clear from what is most likely a swindle.

A Real Estate Contract requires Offer and Acceptance

The contract must be agreed upon by both parties. This means that both must sign the contract, and specify the date and place where it was signed. If either party doesn’t, but one does, it can be taken as if the party who did was trying to perform transactions without consent, which can lead to legal problems or having the contract null and void.

A Real Estate Contract requires a Legal Description

This refers to making the property identifiable, from it’s street address, lot, block, to anything else the contract may require. If a contract doesn’t specify these bits, well, that’s as red a flag can get.

A Real Estate Contract requires Consideration

Consideration translates to an “extra” added onto the contract, as evidence of good faith. This can range anywhere from something of worth, “hugs and kisses” and, in most cases, money. Think of it as an assurance, if you will.

That’s about it. Should any of these be missing from your checklist, then you’re probably better off looking for another deal. Alternatively, however, you can enforce your need of a proper contract.

Sure, some people might take offense to this, but remember, you are in your complete right (and obligation) to see these requirements fulfilled, since it’s necessary for the deal to go off without a hitch, and to prevent any form of legal repercussions down the line. Best-case scenario, the seller realizes this and goes on with the deal, following the rules. Worst-case scenario, you’ve avoided a risky proposition, and you’ll be well on your way to invest your money somewhere else, somewhere safer.

Remember, keep calm and keep sharp!