How to Build a House in Mexico

Lisa Parris

Who hasn't spent a dreary December day dreaming of a tropical garden or hammock on the beach in an exotic location, sunning yourself, oblivious to the winter weather of the northern climate? Maybe it's time to take the leap. Hop the border to Mexico and build a home of your own. You'll find property and construction costs to be 30 percent to 40 percent lower than in the United States. If that grabbed your attention, the guide below outlines the steps you need to follow to build a house of your own in Mexico.

Step 1

Apply for an FM3 visa at the nearest Mexican Embassy or Consulate. The visa is a type of resident permit that is good for one year and is easily renewed every year thereafter. You will need it to buy property legally in Mexico. It will allow you to live there indefinitely.

Step 2

Explore the country to find a location that suits you. Areas that are popular tourist destinations are more expensive than small, out-of-the way settings, but they also offer more in the way of conveniences and contain higher percentage of foreigners in residence.

Step 3

Rent in the area you're thinking of building for a minimum of three months. Reasonably priced long-term rentals are not generally advertised, but if you start asking around town, someone is likely to contact you with a rental opportunity. If you still like the place after a few months, move forward with your plans, but if you don't, move on to somewhere bigger/smaller/closer to the ocean/up in the mountains and try a change of scenery.

Step 4

Buy your land. When you finally find a place where you want to drop anchor, check in with the local real estate agent to see what's available. If the property you want is in a restricted zone, you will need to apply for "fideicomiso." This is a trust agreement made with a major Mexican bank that allows the foreigner to buy the restricted property. The bank then holds the deed in trust.

Step 5

Meet with the notary public who will oversee the purchase. In Mexico, the notary public is appointed by the governor, is in possession of a university law degree and has passed a rigorous examination administered by the government. Their main function is to ensure major legal transactions, such as the transfer of property, is done in accordance with the laws of Mexico.

Step 6

Establish good relations in the community to help you assemble a building crew. Even if you have extensive construction experience, consider hiring, or at least consulting, a local architect. They can ensure you have all the proper permits and are meeting the standard requirements of the district building codes. If you have been renting in the area, you should already know a number of people in your vicinity who are trustworthy and reliable.

Step 7

Make sure you are accessible to your crew. Your presence and assistance on the building site should not be a surprise to the people working with you on your project. Be aware that many workers will be reluctant to tell you "no" even if they know for a fact that what you want done is impractical or even impossible. Be around to deal with problems as they arise and make sure you get advice from someone who's not afraid to tell you the truth.

Step 8

Prepare yourself mentally and financially for things to take longer than you anticipated and to cost more than you originally estimated. Plan on it and it won't be as difficult to cope with. Understand that the phrase, "surely there must be something that can be done,' is considered an offer and is generally followed by an "unofficial" fee for expedited services. This is standard and to be expected.

Step 9

Be aware of capital gains tax. This is to discourage "flipping" property and can be as high as 28 percent on the net profit made from the sale of Mexican real estate. However, if you decide to sell your Mexican home and have lived in it for at least five years, you are exempt from this tax.