From Toronto to Puerto Escondido: Canadian’s Guide to Buying Property

Why Canadian Buyers Are Choosing Puerto Escondido Over Other Markets

The Canadian snowbird migration to Mexico has traditionally centered on Puerto Vallarta, Playa del Carmen, and Los Cabos. Puerto Escondido offers something different: authentic Oaxacan culture, world-class surfing, lower price points, and—crucially—far less development saturation. While established markets face inventory shortages and premium pricing, Puerto Escondido combines accessibility with opportunity.

The Direct Flight Advantage

Starting winter 2025-26, Air Canada operates direct flights from Toronto (YYZ) to Puerto Escondido (PXM), while WestJet connects from Calgary (YYC). According to Air Canada’s announcement, this marks the first Canadian carrier offering nonstop service to this emerging Pacific coast destination. Flight times average 5-6 hours—comparable to traveling from Toronto to Vancouver—eliminating the exhausting overnight layovers in Mexico City that previously deterred many buyers.

Market Fundamentals Favoring Canadian Investors

The Puerto Escondido real estate market presents several advantages for Canadian buyers:

• Appreciation Potential: Properties in established neighborhoods like Zicatela and La Punta have seen consistent annual appreciation as infrastructure improvements and tourism growth drive demand
• Rental Income Opportunities: The vacation rental market thrives year-round, with peak occupancy during Canadian winter months (December-March) when Toronto experiences its coldest weather
• Currency Considerations: The Mexican peso typically offers favorable exchange rates for Canadian dollar holders, particularly compared to U.S. dollar-denominated markets
• Lower Entry Points: Beachfront properties start at price points significantly below comparable Canadian coastal markets, with quality condos available in the mid-range and luxury villas accessible at prices that would purchase only modest suburban properties in Toronto or Vancouver
• Infrastructure Development: The recently opened Barranca Larga-Ventanilla highway has reduced travel time from Oaxaca City, while airport expansion plans promise additional international connectivity

Comparing Puerto Escondido to Traditional Canadian Destinations

Understanding the Fideicomiso: Your Path to Legal Ownership

The single most important concept for Canadian buyers to understand is the fideicomiso (bank trust)—Mexico’s constitutional solution allowing foreign ownership of coastal properties. Puerto Escondido sits entirely within Mexico’s restricted zone (within 50 kilometers of the coastline), making the fideicomiso mandatory for all foreign buyers.

What Is a Fideicomiso?

A fideicomiso is not a lease. According to INEGI (Mexico’s national statistics institute), this bank trust structure has facilitated foreign property ownership since 1973, providing the same rights Canadians enjoy with fee simple ownership at home. Here’s how it works:

• The Bank as Trustee: A Mexican bank (such as HSBC, Scotiabank Mexico, or Banorte) holds legal title to the property
• You as Beneficiary: You receive all beneficial ownership rights—you can use, modify, rent, sell, or bequeath the property exactly as if you held direct title
• 50-Year Renewable Term: The trust lasts 50 years and can be renewed indefinitely for additional 50-year periods with no restrictions
• No Bank Control: The bank cannot sell, encumber, or make decisions about your property without your explicit written authorization
• Inheritance Rights: You can designate beneficiaries who will inherit the property upon your passing, just as with Canadian real estate

Fideicomiso Setup and Annual Maintenance

Understanding the financial commitment helps Canadians budget accurately:

• Initial Establishment: Setup fees typically range from USD $1,000-2,500, including the Ministry of Foreign Affairs (SRE) permit
• Annual Maintenance Fee: Banks charge approximately USD $500-1,000 annually to maintain the trust—a modest expense compared to Canadian property taxes
• Timeline: Fideicomiso establishment typically adds 4-8 weeks to the purchase timeline, requiring coordination between your notario público, the trustee bank, and the SRE

Common Canadian Questions About Fideicomisos

Q: Is the fideicomiso secure?
A: Yes. The fideicomiso system is regulated by Mexico’s National Banking Commission (CNBV) and has successfully facilitated foreign property ownership for over five decades. Your property rights are enshrined in Mexican trust law and cannot be revoked.

Q: Can I get a mortgage on a fideicomiso property?
A: Yes. Many Mexican and international lenders offer financing for fideicomiso properties, though Canadian buyers should expect different terms than domestic mortgages. Cross-border lenders like MoXi (Global Mortgage) specialize in financing for North American buyers purchasing Mexican real estate through various property types.

Q: What happens if I don’t renew the fideicomiso?
A: If a fideicomiso expires without renewal, the property theoretically reverts to the Mexican government. However, banks provide ample notice years in advance, and renewal is a straightforward administrative process. In practice, this scenario almost never occurs.

The Purchase Process: Step-by-Step Guide for Canadians

Buying property in Puerto Escondido follows a structured process governed by Mexican law. Understanding each phase helps Canadian buyers navigate the transaction confidently.

Phase 1: Property Search and Due Diligence (2-8 weeks)

1. Engage a Local Real Estate Professional: Work with an agent who understands both Canadian expectations and Mexican real estate law. Look for AMPI (Asociación Mexicana de Profesionales Inmobiliarios) certification—Mexico’s equivalent to CREA (Canadian Real Estate Association)
2. Explore Neighborhoods: Puerto Escondido offers distinct zones catering to different preferences:
   • Zicatela: The surf capital with international restaurants, coworking spaces, and digital nomad culture
   • La Punta: Upscale residential area with stunning ocean views and established expat community
   • Carrizalillo: Protected bay perfect for swimming, family-friendly atmosphere
   • Bacocho: Golf course community with luxury developments and hotel zone
   • Colotepec: Traditional Mexican neighborhood offering authenticity and value
3. Conduct Thorough Due Diligence: Verify the property has clear title (escritura), confirm it’s not ejido land (communal property that cannot be sold to foreigners), and ensure all property taxes are current

Phase 2: Offer and Legal Representation (1-2 weeks)

4. Submit a Written Offer: Present your offer price and terms through your real estate agent
5. Negotiate Purchase Agreement: Once accepted, you’ll sign a promissory purchase agreement (contrato de promesa de compraventa) and typically deposit 10% earnest money into an escrow account
6. Retain a Mexican Attorney: While not legally required, hiring an independent attorney (abogado) provides additional protection. They review all documents and represent your interests separately from the notario
7. Select Your Notario Público: The notario (equivalent to a Canadian notary public but with much broader authority) is a government-appointed attorney who verifies the transaction’s legality, conducts title searches, calculates taxes, and registers the transfer. Typically the buyer selects the notario

Phase 3: Fideicomiso and Closing (6-10 weeks)

8. Choose Trustee Bank: Select a Mexican bank to hold your fideicomiso. Many Canadian buyers choose Scotiabank Mexico due to brand familiarity, though HSBC, Banorte, and others offer competitive services
9. Apply for SRE Permit: Your bank submits an application to the Secretaría de Relaciones Exteriores (Ministry of Foreign Affairs) for permission to establish the trust. Processing typically takes 3-4 weeks
10. Transfer Funds: Wire your purchase funds from Canada. Many buyers use currency exchange specialists (like Wise or OFX) rather than traditional banks to save on exchange rates and transfer fees
11. Sign Final Documents: Meet with the notario to sign the escritura (deed) and fideicomiso agreement. The notario reviews all terms, confirms funds transferred, and validates the transaction
12. Register Property: The notario registers your fideicomiso with the Public Registry of Property, making you the official beneficiary
13. Receive Your Documentation: You’ll receive certified copies of your fideicomiso deed, property registration, and all transaction documents

Total Timeline and Transaction Costs

Canadian buyers should plan for a 3-4 month purchase timeline from offer acceptance to closing—longer than typical Canadian transactions but standard for Mexican coastal property purchases. Total closing costs typically range 7-10% of purchase price, including:

• Acquisition tax (impuesto de adquisición): Approximately 2-3% depending on municipality
• Notario fees: 1-2% of purchase price
• Fideicomiso establishment: USD $1,000-2,500
• Legal representation: USD $1,500-3,000 (optional but recommended)
• Title insurance: Available through some U.S. and international providers
• Property appraisal: USD $300-500 if financing

Financing Options for Canadian Buyers

Unlike purchasing property in Canada where mortgage financing is standard, most Puerto Escondido buyers pay cash. However, financing options exist for Canadians who prefer to leverage their purchase.

Cross-Border Mortgages

Specialized lenders like MoXi (Global Mortgage) offer mortgage products designed for North American citizens buying Mexican real estate. Key characteristics include:

• Down Payment: Typically 30-50% (higher than Canadian mortgages)
• Interest Rates: Generally 8-12% for foreign buyers—significantly higher than current Canadian rates but reflecting currency risk and cross-border lending complexity
• Loan Terms: Usually 15-20 years, though some lenders offer 30-year terms
• Income Verification: Lenders require Canadian income documentation, credit reports, and often proof of liquid assets

Canadian Home Equity Lines of Credit

Many buyers leverage equity in their Toronto, Vancouver, or Calgary homes through HELOCs, then purchase the Puerto Escondido property outright. This approach offers:

• Lower interest rates (Canadian HELOC rates versus Mexican mortgage rates)
• Simplified closing process (no Mexican lender coordination required)
• Canadian tax deductibility depending on use of funds
• No foreign exchange on monthly payments

Developer Financing

Some Puerto Escondido developers offer owner financing, particularly for land purchases or pre-construction condominiums. Terms vary but may include lower down payments and shorter amortization periods.

Tax Implications for Canadian Owners

Owning Puerto Escondido real estate creates tax obligations in both Mexico and Canada. Understanding these requirements helps avoid surprises.

Mexican Property Taxes

Annual property tax (impuesto predial) in Puerto Escondido is remarkably low compared to Canadian rates—often just a few hundred dollars annually for typical residential properties. Taxes are paid to the municipality (San Pedro Mixtepec-Distrito 22 for most of Puerto Escondido).

Rental Income Taxation

If you rent your property:

• Mexican Tax: You must register with SAT (Mexico’s tax authority) and pay income tax on rental earnings. Many owners hire local accountants to manage tax compliance
• Canadian Tax: As a Canadian resident, you must report worldwide income to the CRA, including Mexican rental income. The Canada-Mexico tax treaty prevents double taxation—foreign taxes paid can typically be credited against Canadian tax liability

Capital Gains on Sale

When selling, Mexico imposes capital gains tax on the appreciation. However, if the property has been your primary residence for at least 5 years, significant exemptions may apply. Canadian residents must also report the capital gain to the CRA. Consult with cross-border tax specialists familiar with both Canadian and Mexican tax law.

Managing Your Puerto Escondido Property from Canada

Distance management is a common concern for Canadian buyers. Fortunately, Puerto Escondido’s growing expat services industry has developed robust solutions.

Property Management Services

Professional property managers handle:

• Vacation rental marketing and guest management (Airbnb, VRBO coordination)
• Routine maintenance and emergency repairs
• Utility bill payment and tax compliance
• Hurricane season preparation and property security
• Guest services and concierge assistance

Management fees typically range 15-25% of gross rental income for full-service vacation rental management.

Remote Monitoring Technology

Many owners install smart home technology enabling remote monitoring from Toronto or Vancouver:

• Security cameras with cloud storage and mobile alerts
• Smart locks for keyless entry and guest access
• Water leak sensors and automatic shutoff valves
• Climate control systems manageable via smartphone

Building Trusted Local Relationships

The Puerto Escondido community values personal relationships. Many successful Canadian owners develop connections with:

• A reliable handyman (maestro) for repairs and maintenance
• A trusted housekeeper who checks on the property between visits
• Neighborhood contacts who can respond to emergencies
• A local attorney and accountant for ongoing legal and tax matters

Common Mistakes Canadian Buyers Should Avoid

Learning from others’ experiences helps Canadian buyers navigate the process successfully:

Mistake #1: Purchasing Ejido Land

Ejido land is communal property that cannot be legally sold to foreigners. Some unscrupulous sellers attempt to sell ejido properties at attractive prices. Always verify the property has a proper escritura and is not ejido land before proceeding. Your notario should confirm this during due diligence.

Mistake #2: Skipping Independent Legal Representation

While the notario protects the transaction’s legality, they don’t represent your interests specifically. Hiring your own attorney provides an advocate reviewing documents, negotiating terms, and protecting your investment.

Mistake #3: Underestimating Operating Costs

Beyond the fideicomiso fee and property taxes, budget for:

• Higher electricity costs (air conditioning in tropical climate)
• Water delivery in some areas
• Internet and utilities
• HOA fees if in a condominium complex
• Hurricane/tropical storm insurance (if available)
• Regular maintenance in the salt air environment

Mistake #4: Choosing Location Based Only on Price

The cheapest property isn’t always the best investment. Consider:

• Proximity to the beach and amenities
• Access to quality healthcare facilities
• Internet reliability (crucial for remote work)
• Neighborhood security and walkability
• Rental income potential if relevant to your goals

Mistake #5: Not Visiting During Different Seasons

Puerto Escondido has distinct seasons affecting experience:

• Dry Season (November-May): Perfect weather, peak tourism, highest rental rates
• Rainy Season (June-October): Afternoon thunderstorms, fewer tourists, lush landscapes, lower rates
• Surf Season: World-class waves attract surfers year-round, with peak conditions November-March

Visit during both high and low seasons to understand the full year-round experience before purchasing.

Investment Property Analysis: Vacation Rental Potential

Many Canadian buyers purchase with the intention of generating rental income to offset ownership costs or provide investment returns. Puerto Escondido’s vacation rental market offers strong potential, particularly during Canadian winter months when demand peaks.

Peak Season Rental Dynamics

December through March represents high season, coinciding with:

• Canadian snowbirds escaping Toronto and Calgary winters
• U.S. and European tourists seeking warm weather
• Surf tourism (Zicatela hosts international surf competitions)
• Holiday travelers (Christmas, New Year, spring break)

Well-marketed properties in prime locations like Zicatela or La Punta can achieve 70-85% occupancy during this period, commanding premium nightly rates.

Positioning Your Property for Success

Successful vacation rentals typically feature:

• Modern Amenities: Air conditioning, reliable WiFi, fully equipped kitchen, comfortable furnishings
• Ocean Views: Properties with ocean views or beachfront access command significant premiums
• Pool Access: Private or shared pool facilities highly desired by guests
• Walkable Location: Proximity to restaurants, beaches, and nightlife (especially in Zicatela)
• Professional Photography: High-quality listing photos dramatically impact booking rates
• Responsive Management: Quick communication and problem resolution essential for positive reviews

Realistic Revenue Projections

While every property is unique, here’s a general framework for estimating potential rental income:

• High Season (December-March): 70-85% occupancy at premium rates
• Shoulder Season (April-May, November): 40-60% occupancy at moderate rates
• Low Season (June-October): 25-40% occupancy at discounted rates
• Gross Revenue: Varies widely by property type, location, and amenities
• Operating Expenses: Typically 35-50% of gross revenue (management fees, utilities, maintenance, cleaning, supplies)

Conservative buyers should model occupancy and rates at the lower end of ranges to ensure the investment meets financial goals even if performance falls short of optimistic projections.

Living the Puerto Escondido Lifestyle: What Canadian Snowbirds Love

Beyond the investment fundamentals, many Canadians discover that Puerto Escondido offers an exceptional quality of life that keeps them returning season after season.

The Authentic Oaxacan Experience

Unlike heavily developed resort towns, Puerto Escondido maintains its Mexican character:

• Traditional markets where locals shop for fresh produce and fish
• Family-owned restaurants serving authentic Oaxacan cuisine (moles, tlayudas, mezcal)
• Indigenous cultural events and celebrations throughout the year
• Spanish immersion opportunities (many expats become conversational)
• Genuine interactions with welcoming local community

The International Community

A growing expat community provides connection and support:

• Canadian, American, and European residents creating diverse social networks
• Regular community gatherings, potlucks, and cultural events
• Facebook groups and WhatsApp communities sharing information and resources
• Co-working spaces attracting digital nomads and remote workers
• Volunteer opportunities connecting expats with local community needs

Healthcare Considerations

Quality healthcare is available in Puerto Escondido:

• Private clinics with English-speaking doctors
• Modern hospital facilities in nearby Huatulco (45 minutes) for major procedures
• Oaxaca City (6 hours) offers world-class medical centers for specialized care
• Dental tourism popular—quality care at fraction of Canadian costs
• Many Canadian snowbirds maintain travel insurance or expat health coverage supplementing OHIP/provincial coverage limitations for out-of-country care

Next Steps: Your Path to Puerto Escondido Property Ownership

The journey from Toronto to Puerto Escondido property ownership becomes remarkably straightforward with proper planning and professional guidance. Here’s how to begin:

Immediate Action Steps

1. Book an Exploratory Visit: Experience Puerto Escondido firsthand before making purchase decisions. The new direct flights make reconnaissance trips convenient
2. Connect with Local Real Estate Professionals: Engage an experienced agent who understands Canadian buyer needs and Mexican real estate law. Look for AMPI certification and client testimonials
3. Review Your Finances: Determine your budget, explore financing options if needed, and understand the total cost of ownership including closing costs and annual expenses
4. Research Neighborhoods: Explore different areas through online resources, property listings, and expat community forums to identify zones matching your preferences
5. Consult with Cross-Border Advisors: Speak with accountants and attorneys familiar with Canadian-Mexican property ownership regarding tax implications and estate planning

Building Your Advisory Team

Successful Canadian buyers typically work with:

• A Puerto Escondido real estate agent familiar with houses and villas, condominiums, and investment opportunities
• A Mexican attorney (abogado) providing independent legal representation
• A cross-border tax accountant understanding both CRA and SAT requirements
• A currency exchange specialist minimizing transfer costs
• A property manager if planning vacation rental income