4–6%
Typical total closing cost as % of purchase price
~2%
ISAI acquisition tax rate in Oaxaca state
$500–$700
Annual fideicomiso fee (ongoing)
45–90 days
Typical time from offer to closing
What You Need to Budget
What You'll Pay Beyond the Purchase Price
Buying property in Mexico as a foreigner involves a distinct set of fees, taxes, and legal steps that differ significantly from the US or Canada. Unlike North American real estate, where title insurance and escrow companies handle much of the transaction, Mexico uses a Notario Público — a government-appointed attorney who is the central figure in every property transfer. Understanding this system upfront saves surprises at the closing table.
In Mexico, the buyer pays the majority of closing costs. The seller typically covers their capital gains tax (ISR) and the real estate agent's commission. As a buyer, you are responsible for the acquisition tax (ISAI), notary fees, the fideicomiso (bank trust) if the property is in the coastal restricted zone, your independent attorney's fees, the appraisal, and public registry fees.
The good news: while closing costs in Mexico are higher than many buyers expect (4–6% vs. 2–3% in many US markets), ongoing ownership costs are very low. Mexican property taxes (predial) are extremely affordable — often under $500/year even for high-value properties.
See our complete guide to buying property in Mexico as a foreigner →Budget 4–6% on top of purchase price
Closing costs in Mexico are higher than many North American buyers expect, but ongoing ownership costs are remarkably low.
Buyer pays most closing fees in Mexico
ISAI, notary, fideicomiso, and legal fees are all paid by the buyer. The seller pays agent commissions and capital gains tax.
Notario Público is required by law
Every Mexican real estate transaction must be authenticated by a Notario Público — a government-appointed attorney with special legal authority.
Line by Line
Closing Cost Line Items Explained
Here is every fee you will encounter when buying property in Mexico, what it covers, and what to expect to pay on a typical $300,000 USD coastal property.
ISAI / ISABI Acquisition Tax
State acquisition tax (Impuesto Sobre Adquisición de Inmuebles). Oaxaca rate approx. 2% of fiscal value. Paid by buyer.
Notario Público Fees
Notary verifies deed, calculates taxes, and registers the property. Required for all transactions in Mexico.
Fideicomiso Setup Fee
One-time bank trust setup for coastal property. Required for foreigners in the restricted zone.
Real Estate Attorney Fees
Independent attorney for title review, contract review, and due diligence. Highly recommended.
Public Registry Fee
Fee to register the new deed in the Public Registry of Property.
Appraisal (Avalúo)
Required by the notary and the bank for fideicomiso valuation.
Total Estimated Closing Costs
4–6% of purchase priceAgent commissions are paid by the seller — not you as the buyer.
After Closing
Annual & Ongoing Costs to Budget For
Beyond closing, these are the recurring and eventual costs of owning property in Mexico. The good news: most of them are remarkably low compared to the US or Canada.
Annual Fideicomiso Fee
$500–$700/yr
Bank trustee fee. Paid every year for the duration of the trust.
Predial (Property Tax)
$100–$600/yr
Mexican property tax is very low — typically 0.1–0.3% of assessed value. Exact amount depends on municipality.
HOA / Maintenance
$50–$400/mo
If buying in a development with shared amenities, gardens, security.
Property Management
10–15% of rental income
If renting short-term, property management typically charges 10–20% of gross rental revenue.
Capital Gains Tax (ISR)
1–35% of gain (or 25% of sale price)
When selling, Mexico's ISR capital gains tax applies. Foreigners with Residente Permanente status may qualify for the $150,000 USD exemption with sufficient ownership period.
Mexico's Predial: One of the World's Lowest Property Taxes
One of Mexico's most compelling ownership advantages is its extraordinarily low annual property tax (predial). On a $300,000 USD beachfront property, your annual predial bill may be under $300 USD. Compare this to comparable US coastal markets where property taxes routinely run $5,000–$15,000+ per year. For long-term property holders, this is a significant ongoing saving that substantially offsets the higher upfront closing costs.
Tax Deep Dive
Understanding ISAI: Mexico's Property Acquisition Tax
ISAI stands for Impuesto Sobre Adquisición de Inmuebles — the state-level property acquisition tax that applies every time real estate changes hands in Mexico. Unlike the US where you might pay a small deed transfer tax, ISAI in Mexico is a meaningful expense: approximately 2% of the property value in Oaxaca state (which includes Puerto Escondido), collected by the Notario Público at closing and remitted to the state government. The buyer pays this tax; it is not split with the seller.
ISAI is a state-level tax, not federal, which means every Mexican state sets its own rate. Rates range from approximately 1.5% (some states) to 4.5% (others). Oaxaca's rate of approximately 2% is mid-range and applies to the higher of two values: the fiscal (cadastral) value assigned by the municipality, or the actual transaction price declared in the escritura. Your notario is legally required to use the higher value — so if you buy a property where the fiscal value is $200,000 MXN but you pay $300,000 USD, the ISAI is calculated on the USD transaction price converted to pesos.
Tip: The ISAI is calculated on the fiscal (cadastral) value assigned by the municipality, which may be lower than the actual sale price. Your notary will use whichever is higher. Ask your notary to show you the fiscal value of any property you are considering before finalizing your offer — this will let you estimate your ISAI bill with accuracy.
Notario Público
Government-appointed. Required by law. Cannot be skipped.
Your Attorney
Represents you. Reviews contracts. Protects your interests.
Know the Difference
The Notario Público: Not What You Think
A Mexican Notario Público is radically different from a notary public in the US or Canada. In North America, a notary is essentially a witness who stamps documents. In Mexico, a Notario Público is a highly specialized, government-appointed attorney who has passed a rigorous federal examination and serves a quasi-public function in the legal system. They have exclusive authority to authenticate real estate transactions, verify legal capacity, draft the escritura (official deed), calculate and collect all taxes on behalf of the government, and register the deed with the Public Registry of Property. No real estate transaction in Mexico is valid without one.
Here is the critical thing to understand: the notary is neutral. They represent the transaction, not you. They ensure everything is legally correct and taxes are paid — but they will not flag issues that are bad for you specifically, negotiate terms on your behalf, or warn you about contractual risks. This is why every experienced buyer's advisor recommends hiring an independent Mexican real estate attorney in addition to the notary. Your attorney reviews the promissory contract (contrato de promesa de compraventa) before you sign, conducts title due diligence, verifies there are no liens, advises on the fideicomiso structure, and represents your interests at every stage. On a purchase of several hundred thousand dollars, their fee of $1,500–$3,000 USD is among the best money you will spend.
As the buyer, you have the right to choose your own notary. Exercise it — ask your real estate attorney for a recommendation rather than using whoever the seller or developer suggests.
Common Questions
Frequently Asked Questions About Closing Costs in Mexico
How much are closing costs in Mexico for foreigners?
Foreigners buying property in Mexico should budget 4–6% of the purchase price for closing costs. This includes ISAI acquisition tax (~2%), notary fees (1–1.5%), fideicomiso setup ($500–$1,500 one-time), attorney fees (0.5–1%), public registry fees, and the property appraisal. On a $300,000 USD property, expect roughly $12,000–$18,000 in closing costs.
Who pays closing costs in Mexico — buyer or seller?
In Mexico, the buyer pays the majority of closing costs, including ISAI (acquisition tax), notary fees, fideicomiso setup, attorney fees, and registry fees. The seller is typically responsible for capital gains tax (ISR) on any profit, plus the real estate agent's commission (usually 5–6% of the sale price). This is a key difference from the US, where closing costs are often split or negotiated.
What is ISAI (acquisition tax) in Mexico?
ISAI stands for Impuesto Sobre Adquisición de Inmuebles — the state-level property acquisition tax paid by the buyer at closing. In Oaxaca state (which includes Puerto Escondido), the rate is approximately 2% of the higher of the fiscal (cadastral) value or the transaction price. It is collected and submitted by the Notario Público. Every state in Mexico has slightly different rates, ranging from 1.5% to 4.5%.
Do I have to pay capital gains tax when I sell property in Mexico?
Yes. When you sell property in Mexico, capital gains (called ISR — Impuesto Sobre la Renta) may apply. Mexico taxes the gain at progressive rates up to 35%, or alternatively 25% of the gross sale price (whichever is lower when calculated through the notary). Foreigners who hold Residente Permanente status and have lived in the property as their primary residence may qualify for a capital gains exemption up to approximately $150,000 USD, similar to the Mexican citizen exemption. Always consult a Mexican tax attorney before selling.
Can I negotiate the notary fees in Mexico?
Notary fees in Mexico are regulated by state fee schedules (arancel notarial), so they are not fully negotiable the way service fees might be in other countries. However, in practice, notaries often have some flexibility, particularly on larger transactions. What you can shop around for is the notary's service level and reputation — not necessarily price alone. Your real estate attorney can recommend trusted notaries.
What is a Notario Público in Mexico — is it the same as a notary in the US?
No — a Mexican Notario Público is very different from a US or Canadian notary. In Mexico, a Notario Público is a government-appointed attorney with a federal license who serves a quasi-public function. They verify the legal status of the property, calculate and collect all taxes, draft the official deed (escritura), and register the transaction with the Public Registry of Property. Their involvement is mandatory for any real estate transaction — you cannot legally transfer property in Mexico without one. This is why you also want your own independent attorney: the notary is neutral and represents the transaction, not you personally.
Are there any hidden fees I should know about?
Mexico's closing process is relatively transparent when you work with a good notary and attorney, but a few costs surprise buyers: (1) The fiscal (cadastral) value used for ISAI may differ from what you expect, occasionally resulting in a higher tax base. (2) If the property has unpaid predial (property taxes) or utility debts, the buyer inherits them — always verify. (3) Some developments charge a transfer fee or HOA initiation fee at closing. (4) Wire transfer fees and currency conversion costs when sending USD or CAD to Mexico can add 0.5–2% depending on the method you use.
How do I send money to Mexico to buy property?
Most buyers use an international wire transfer (SWIFT) from their home bank to a Mexican bank account. However, bank exchange rates are often poor. Many buyers use services like Wise, OFX, or currency brokers to convert CAD or USD to MXN at better rates — potentially saving thousands of dollars on a large transaction. Your attorney or notary will provide the receiving account details. Always verify these details directly with your attorney via phone or in person — never send funds based solely on emailed instructions.
