Countries › Mexico › Guide › 11. Real estate and land › Real estate and land in Mexico: the restricted zone, bank trusts, the foreigners agreement, Foreign Ministry fees, ejido land, registration and taxes on buying, renting and selling

Real estate and land in Mexico: the restricted zone, bank trusts, the foreigners agreement, Foreign Ministry fees, ejido land, registration and taxes on buying, renting and selling

Last verified: 2026-10-26 · Status: Stable

Foreigners may own land in most of Mexico after signing an agreement with the Foreign Ministry (SRE) to be treated as Mexicans for that property; within 100 km of the borders and 50 km of the coasts they can never hold direct title, and use a bank trust of up to 50 renewable years or, for non residential use, a Mexican company. Title passes by a notarial deed that must be registered in the state Public Property Registry to be good against third parties, and ejido farmland must leave the agrarian regime before it can be sold to outsiders. A non resident seller pays 25 percent of the gross price, or 35 percent of the gain if the sale is by public deed; rent paid to a non resident bears 25 percent withholding on the gross; land and housing are VAT exempt while commercial buildings and rents bear 16 percent.

USD conversions use MXN 18.5026 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 16 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Legal conversions in Mexico use the Banxico FIX, which differs slightly. Conversions are for orientation only.

Key facts

Foreigners may hold direct title to land	Yes outside the restricted zone, after the SRE foreigners agreement; never inside it Constitution art. 27, section I; LIE art. 10 A, as of 2026-10-26 · in force
Restricted zone width along land borders	100 kmConstitution art. 27, section I, as of 2026-10-26 · in force
Restricted zone width along coasts	50 kmConstitution art. 27, section I, as of 2026-10-26 · in force
Maximum term of a restricted zone bank trust, renewable on request	50 yearsLIE art. 13, as of 2026-10-26 · in force
SRE fee for the permit to set up a restricted zone trust (2026)	21650 MXNLFD art. 25, section V a); RMF 2026 Annex 4, as of 2026-10-26 · in force
SRE deadline to decide a trust permit at its central office, deemed approved after	5 business daysLIE art. 14, as of 2026-10-26 · in force
Deadline for a Mexican company with foreign partners to notify the SRE of a non residential restricted zone purchase	60 business daysLIE art. 10, section I, as of 2026-10-26 · in force
Maximum foreign holding of series T (land) shares in farm land companies	49 %Ley Agraria art. 130, as of 2026-10-26 · in force
Maximum farm, ranch or forest land a company may own	25 times the individual small property limit Ley Agraria art. 126, as of 2026-10-26 · in force
Effect of registration in the Public Property Registry	Declaratory; unregistered deeds have no effect against third parties Código Civil Federal arts. 3007 and 3008, as of 2026-10-26 · in force
Tax on a non resident's sale of Mexican real estate, gross basis	25 %LISR art. 160, as of 2026-10-26 · in force
Optional tax on a non resident's gain when sold by public deed (top rate of LISR art. 152)	35 %LISR arts. 152 and 160, as of 2026-10-26 · in force
Withholding on rent from Mexican real estate paid to a non resident, gross basis	25 %LISR art. 158, as of 2026-10-26 · in force
VAT standard rate	16 %LIVA art. 1o., as of 2026-10-26 · in force
VAT on sales of land and housing	Exempt LIVA art. 9o., sections I and II, as of 2026-10-26 · in force
VAT on unfurnished residential rent	Exempt LIVA art. 20, section II, as of 2026-10-26 · in force

The rule

1. No direct title for foreigners in the restricted zone; elsewhere, title after the foreigners agreement. Only Mexicans and Mexican companies have the right to acquire ownership of land and waters. The State may grant the same right to foreigners who agree before the Foreign Ministry to consider themselves Mexican nationals regarding that property and not to invoke the protection of their governments over it, on pain of losing the property to the Nation (the Calvo clause). In a strip of 100 kilometers along the borders and 50 kilometers along the coasts (the restricted zone), foreigners may not acquire direct ownership of land and waters under any circumstances. Outside the restricted zone a foreigner files the written agreement with the SRE beforehand and obtains its permit; if the municipality lies wholly outside the zone, the permit is deemed granted unless the SRE publishes a denial in the DOF within 5 business days, and if the municipality is partly inside the zone the SRE decides within 30 business days.
Cost to do it: SRE fee for receiving, studying and approving the agreement for a foreigner's acquisition outside the restricted zone: MXN 5,250 in 2026 (LFD art. 25, section XV, updated amount in RMF 2026 Annex 4). Notary, appraisal and registry costs come on top and are set by each state.
Example: A foreign individual buying a house in a municipality wholly outside the restricted zone files the SRE agreement and pays MXN 5,250; if no denial is published in the DOF within 5 business days, the permit is deemed granted and the notary can sign the deed in the buyer's own name. / The MXN 5,250 fee is about USD 284.Constitución Política de los Estados Unidos Mexicanos, art. 27, section I (reformed DOF 2 December 1948 and 20 January 1960); Ley de Inversión Extranjera (LIE), DOF 27 December 1993, art. 10 A added DOF 24 December 1996, last reform of the law DOF 27 May 2024, Constitution art. 27, section I; LIE art. 10 A, 1996-12-24 official text · verified 2026-10-26

2. Bank trust (fideicomiso) for foreigners in the restricted zone. A Mexican bank needs an SRE permit to acquire, as trustee, rights over real estate in the restricted zone when the purpose of the trust is to allow its use and enjoyment without creating real rights, and the beneficiaries are foreign individuals or companies, or Mexican companies with foreign participation acquiring property for residential use. Use and enjoyment includes the right to use the property and to collect its fruits, products and any income from its operation and lucrative exploitation through third parties or through the trustee bank. The trust lasts at most 50 years and may be extended at the request of the beneficiary. The SRE must decide within 5 business days if the request is filed at its central office or 30 business days if filed at a state office; if it does not decide in time, the request is deemed approved. The SRE may check compliance with permit conditions at any time.
Cost to do it: SRE fees in 2026 (LFD art. 25, updated amounts in RMF 2026 Annex 4): MXN 595 to examine each permit request, MXN 21,650 for the permit to set up the trust, MXN 9,740 to modify it and MXN 10,615 for a late request to extend the term. The bank's acceptance fee and annual trustee fee are set by contract, not by law.
Example: A foreign buyer of a beachfront condominium in Quintana Roo, inside the 50 km coastal strip, has the developer's bank take title as trustee. SRE fees: MXN 595 plus MXN 21,650, total MXN 22,245. The buyer, as beneficiary, may live in the unit or rent it out for 50 years and then request an extension. / MXN 22,245 is about USD 1,202.Ley de Inversión Extranjera, DOF 27 December 1993, last reform DOF 27 May 2024 (Chamber of Deputies consolidated text); Ley Federal de Derechos art. 25, section V, reformed DOF 27 November 2009, LIE arts. 11, 12, 13 and 14; LFD art. 25, sections III and V, 1993-12-27 official text · verified 2026-10-26

3. Mexican companies with foreign partners may own restricted zone property for non residential use. Mexican companies whose bylaws contain the foreigners agreement of Constitution art. 27, section I, may acquire ownership of real estate in the restricted zone used for non residential activities, such as industrial plants, offices, hotels or commercial premises, and must notify the SRE within 60 business days after the acquisition. For residential property in the restricted zone they must use the bank trust described above. Mexican companies with a foreigners exclusion clause may acquire real estate anywhere in the country.
Cost to do it: SRE fee for each acquisition notice: MXN 1,475 in 2026; a late notice costs MXN 11,330 (LFD art. 25, sections X and XI d), updated amounts in RMF 2026 Annex 4).
Example: A Mexican S.A. de C.V. owned by a foreign manufacturer buys an industrial lot in Tijuana, within 100 km of the US border. It takes title directly and files the SRE notice within 60 business days, paying MXN 1,475; missing the deadline raises the fee to MXN 11,330. / MXN 1,475 is about USD 80; MXN 11,330 is about USD 612.Ley de Inversión Extranjera, DOF 27 December 1993, art. 10, section I reformed DOF 24 December 1996; Ley Federal de Derechos art. 25, sections X and XI added DOF 1 January 2002, LIE art. 10; LFD art. 25, sections X and XI, item d), 1996-12-24 official text · verified 2026-10-26

4. Ejido land must leave the agrarian regime before an outsider can buy it. Ejidatarios may sell their parcel rights only to other ejidatarios or residents (avecindados) of the same community, in writing before two witnesses ratified by a notary, after notifying the spouse or partner and children, who have a 30 calendar day preemptive right, and with notice to the ejido board. Land assigned to human settlement is inalienable and any act to sell it is void, except for plots in the ejido's urban zone. Once most parcels are delimited, the ejido assembly may allow ejidatarios to adopt full ownership (dominio pleno); the land then leaves the National Agrarian Registry, a property title is issued and registered in the local Public Property Registry, and from then on ordinary civil law applies. On the first sale after full ownership, family members, people who worked the parcel for over a year, ejidatarios, residents and the community, in that order, have a 30 calendar day preemptive right, and a sale without notice may be annulled. Commercial or civil companies may own farm, ranch or forest land up to 25 times the individual small property limit (100 hectares of irrigated land for most crops), must issue a special series T of shares for the land, and foreigners may hold no more than 49 percent of series T shares.
Cost to do it: No federal fee is set in the Ley Agraria for the sale itself; the National Agrarian Registry procedures, notary and surveying costs apply and vary by case.
Example: A developer that wants a parcel of ejido land near a coastal town cannot simply sign a purchase contract with the ejidatario: the assembly must first approve full ownership, the parcel must be removed from the National Agrarian Registry and titled, and the 30 day preemptive rights of art. 84 must be offered before a deed in favor of the developer, or its bank trust, can be signed.Ley Agraria, DOF 26 February 1992, art. 80 reformed DOF 17 April 2008 and 19 December 2016, last reform of the law DOF 14 November 2025 (Chamber of Deputies consolidated text), Arts. 64, 80, 81, 82, 84, 117, 126 and 130, 1992-02-26 official text · verified 2026-10-26

5. Title passes by contract, but only a registered deed protects the buyer against third parties. A sale is binding between the parties once they agree on the property and the price, even before delivery or payment. Sales of real estate whose appraised value exceeds 365 times the general daily minimum wage must be made in a public deed (escritura pública) before a notary. Registrable documents that are not registered in the Public Property Registry have no effect against third parties, and registration is declaratory. These rules come from the Federal Civil Code; each state has its own civil code and registry, which follow the same model, so the local code and the registry of the state where the property sits govern.
Cost to do it: Notary fees, the local real estate acquisition tax and registry fees are set by each state and municipality and are not covered by federal law.
Example: A buyer who pays the price and receives the keys but never registers the deed can lose the property to a later buyer or a creditor of the seller who registers first, because the unregistered deed has no effect against third parties.Código Civil Federal, DOF 26 May, 14 July, 3 and 31 August 1928, last reform DOF 14 November 2025 (Chamber of Deputies consolidated text), Arts. 2248, 2249, 2317, 2320, 3007, 3008 and 3042, 1928-05-26 official text · verified 2026-10-26

6. Selling property as a non resident: 25 percent of the gross price, or 35 percent of the gain by public deed. Income from selling real estate located in Mexico has its source in Mexico. A non resident seller pays 25 percent of the total price with no deductions, withheld by the buyer if the buyer is a Mexican resident or has a permanent establishment in Mexico; otherwise the seller files a return within 15 days. If the sale is made in a public deed (no Mexican representative needed in that case), the seller may instead pay the top rate of the individual tariff of LISR art. 152, which is 35 percent, on the gain computed under the individual rules for sales of property; the notary calculates the tax, records it in the deed and pays it within 15 days of signing. If the tax authority appraises the property at more than 10 percent above the agreed price, the whole difference is income of the non resident buyer taxed at 25 percent. Free acquisitions pay 25 percent of the appraised value. In installment sales of over 18 months by public deed, the tax may be paid as installments fall due if the tax is guaranteed.
Cost to do it: Tax only; the gain option requires a public deed, whose notary fees are set locally.
Example: A non resident sells a condominium held directly for MXN 9,251,300. Option 1: 25 percent of the price, MXN 2,312,825. Option 2, by public deed: if the deductible cost under the individual rules (inflation adjusted cost, improvements and sale expenses) is MXN 6,475,910, the gain is MXN 2,775,390 and the tax at 35 percent is MXN 971,386.50. / Price USD 500,000; option 1 tax USD 125,000; option 2 tax USD 52,500 on a USD 150,000 gain.Ley del Impuesto sobre la Renta (LISR), DOF 11 December 2013, art. 160, fifth paragraph reformed DOF 12 November 2021, last reform of the law DOF 1 April 2024 (Chamber of Deputies consolidated text), LISR arts. 152 and 160, 2013-12-11 official text · verified 2026-10-26

7. Renting to tenants as a non resident: 25 percent withholding on gross rent, collected by the trustee bank if held in trust. Income from granting the temporary use of real estate located in Mexico has its source in Mexico, including amounts a non resident receives for granting use and enjoyment rights over Mexican property, even if they arise from transferring those rights. The tax is 25 percent of the income with no deductions, withheld by the payer; if the payer is a non resident, the recipient files a return within 15 days. The landlord must issue an electronic invoice (CFDI); when the income flows through a trust, the trustee bank issues the invoice and withholds the tax.
Cost to do it: Tax only: 25 percent of gross rent.
Example: A foreign beneficiary of a bank trust rents the unit to a local company for MXN 37,005.20 a month. The trustee bank withholds MXN 9,251.30 each month, MXN 111,015.60 a year, and issues the invoice. / Rent of about USD 2,000 a month; withholding of about USD 500 a month, USD 6,000 a year.Ley del Impuesto sobre la Renta, DOF 11 December 2013, last reform DOF 1 April 2024 (Chamber of Deputies consolidated text), LISR art. 158, first to fourth paragraphs, 2013-12-11 official text · verified 2026-10-26

8. VAT: land and housing exempt, commercial property and rent at 16 percent. The sale of land and of buildings used as housing is exempt from VAT; if only part of a building is housing, only that part is exempt, and hotels are not covered. Rent of property used exclusively as housing, and of farms used only for agriculture or livestock, is exempt, but the exemption does not apply to furnished property or to property used as hotels or guest houses. Other sales and rents of real estate, such as offices, warehouses, retail premises and the building portion of commercial property, bear the general 16 percent rate.
Cost to do it: Tax only.
Example: A company buys a warehouse for MXN 18,502,600, of which MXN 7,401,040 is land and MXN 11,101,560 is the building. VAT applies only to the building: 16 percent is MXN 1,776,249.60. An unfurnished apartment rented as housing bears no VAT; the same apartment rented furnished bears 16 percent. / Price USD 1,000,000 (land USD 400,000, building USD 600,000); VAT on the building USD 96,000.Ley del Impuesto al Valor Agregado (LIVA), DOF 29 December 1978, last reform DOF 12 November 2021 (Chamber of Deputies consolidated text), LIVA arts. 1o., 9o., sections I and II, and 20, sections II and III, 1978-12-29 official text · verified 2026-10-26

Location and use	Holder	SRE step	SRE fee 2026	Rule
Outside the restricted zone, any use	Foreign individual or company in its own name	Foreigners agreement and permit; deemed granted after 5 business days without a DOF denial if the municipality is wholly outside the zone	MXN 5,250 (about USD 284)	Constitution art. 27, section I; LIE art. 10 A
Restricted zone, residential	Bank as trustee, foreigner as beneficiary, up to 50 renewable years	Trust permit; 5 or 30 business days, deemed approved after	MXN 595 plus MXN 21,650 (about USD 1,202)	LIE arts. 11 to 14
Restricted zone, non residential	Mexican company with the foreigners agreement in its bylaws	Notice within 60 business days after purchase	MXN 1,475 (about USD 80); MXN 11,330 if late	LIE art. 10, section I
Anywhere, any use	Mexican company with a foreigners exclusion clause	None	None	LIE art. 10
Ejido parcel	Only ejidatarios or residents of the same ejido until full ownership is adopted	Not an SRE matter; assembly resolution and National Agrarian Registry	Not set in the Ley Agraria	Ley Agraria arts. 80 to 84
Farm, ranch or forest land	Companies up to 25 times the small property limit; foreigners up to 49 percent of series T shares	Ordinary LIE rules for the company	Not applicable	Ley Agraria arts. 126 and 130

How a foreign investor can hold Mexican real estate, by location and use, verified 26 October 2026 against the official texts cited on this page. Fees are 2026 SRE amounts (LFD art. 25, RMF 2026 Annex 4).

Event	Income tax	VAT
Buying land or housing	None for the buyer, unless the official appraisal exceeds the price by over 10 percent (25 percent of the difference)	Exempt
Buying commercial property	Same as above	16 percent on the building portion
Renting out housing, unfurnished	25 percent of gross rent, withheld	Exempt
Renting out furnished housing, hotels or commercial property	25 percent of gross rent, withheld	16 percent
Selling	25 percent of gross price, or 35 percent of the gain by public deed	Exempt for land and housing; 16 percent on commercial buildings
Receiving property free of charge	25 percent of appraised value	Not applicable

Mexican federal taxes on real estate for a non resident individual or company without a permanent establishment, before treaty relief (LISR arts. 158 and 160; LIVA arts. 9o. and 20). State acquisition taxes and municipal property tax are set locally and are not shown.

Worked example

A foreign couple buys a beachfront condominium in a resort town inside the 50 km coastal strip for MXN 9,251,300 (about USD 500,000). They cannot take title themselves, so a Mexican bank takes title as trustee and names them beneficiaries for 50 years (LIE arts. 11 and 13). SRE fees are MXN 22,245 (about USD 1,202); the unit is housing, so no VAT applies to the price (LIVA art. 9o.).
They rent it unfurnished to a local tenant for MXN 37,005.20 a month (about USD 2,000). The trustee bank withholds 25 percent, MXN 9,251.30 a month (about USD 500), and issues the invoice (LISR art. 158). Renting it furnished would add 16 percent VAT (LIVA art. 20).
Years later they sell for MXN 9,251,300 by public deed. Instead of 25 percent of the price, MXN 2,312,825 (USD 125,000), they choose 35 percent of the gain; with an adjusted cost of MXN 6,475,910 the tax is MXN 971,386.50 (USD 52,500), calculated and paid by the notary (LISR art. 160).

Step by step

1. Locate the property: check whether the municipality is wholly outside, partly inside or wholly inside the restricted zone (100 km from borders, 50 km from coasts) and whether the land is private, ejido or communal. This decides between direct title, a bank trust or a Mexican company.
2. Choose the holding vehicle: own name with the SRE foreigners agreement (outside the zone), bank trust (residential inside the zone) or a Mexican company with the foreigners agreement (non residential inside the zone). See entities/choosing-an-entity for company setup.
3. Get the Mexican tax ID (RFC) the notary will require for the deed and for invoices, and appoint a Mexican representative if you will file returns.
4. Run title due diligence at the state Public Property Registry: certificate of liens, chain of title, property tax and water bills paid, land use and, for former ejido land, the full ownership title and the cancellation in the National Agrarian Registry.
5. File the SRE request: foreigners agreement (MXN 5,250, deemed granted after 5 business days without a DOF denial for municipalities wholly outside the zone), trust permit (MXN 595 plus MXN 21,650, 5 business days at the central office or 30 at a state office) or the company's notice within 60 business days after purchase (MXN 1,475).
6. Sign the public deed before a notary, who calculates and collects the seller's income tax and the local acquisition tax, and then registers the deed. Track registration until the registry returns the recorded deed.
7. After closing: register leases and issue invoices, withhold or have the trustee withhold 25 percent on rent paid to non residents, pay municipal property tax, and track the trust term and extension request before year 50.

Common traps

Signing a private contract for restricted zone property in your own name. The Constitution bars foreigners from direct title there for any reason (art. 27, section I); only a bank trust or, for non residential use, a Mexican company works.
Breaking the foreigners agreement. A foreigner who invokes the protection of their own government over the property agreed to lose it to the Nation (Constitution art. 27, section I).
Buying ejido land from an ejidatario. Parcel rights can only be sold to ejidatarios or residents of the same ejido, settlement land is inalienable and any sale is void, and a first sale after full ownership without offering preemptive rights may be annulled (Ley Agraria arts. 64, 80 and 84).
Not registering the deed. An unregistered deed has no effect against third parties (Código Civil Federal art. 3007), so a later registered buyer or creditor can prevail.
Declaring a low price. If the tax authority appraises the property at more than 10 percent above the price, the whole difference is taxable income of a non resident buyer at 25 percent (LISR art. 160).
Selling without a public deed or without the cost file. Without a public deed (or a qualifying representative) the non resident pays 25 percent of the gross price; the 35 percent gain option needs the documents that support the deductible cost.
Missing the SRE notice. A Mexican company that buys non residential restricted zone property must notify the SRE within 60 business days; the late notice fee is MXN 11,330 instead of MXN 1,475 (LIE art. 10; LFD art. 25).
Furnished rentals. Furnished housing and short stays as a guest house lose the residential VAT exemption and bear 16 percent (LIVA art. 20, section II).
Assuming a tax treaty removes Mexican tax. Check whether a treaty between Mexico and your country of residence applies and how your home country credits Mexican tax on Mexican property; for investors based in Argentina, see The Argentine Thread guide for the home side.

Sources

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