Can Foreigners Own Property in Mexico?

A 2026 Guide to Buying Real Estate in Cabo

Yes. Foreigners can legally buy and control real estate in Mexico — including homes and condos in Cabo San Lucas, San José del Cabo, and throughout Los Cabos.

One of the most common misconceptions about buying property in Mexico is that foreigners can only lease land. That is not the case.

Because Los Cabos is located within Mexico's federally defined restricted zone, foreign buyers purchasing residential real estate generally acquire their property rights through a fideicomiso, or Mexican bank trust.

While the structure is different from taking direct title in the United States or Canada, a fideicomiso gives the foreign buyer extensive rights to use, enjoy, improve, rent, sell, and transfer their interest in the property.

If you're considering buying a home, condo, vacation property, or investment property in Cabo, here's what you should know in 2026.

Can Americans and Canadians Buy Property in Cabo?
Yes.

Mexican law defines the restricted zone as land located within:

100 kilometers (approximately 62 miles) of an international border
50 kilometers (approximately 31 miles) of Mexico's coastline

Because Cabo San Lucas, San José del Cabo, the Tourist Corridor, and other Los Cabos communities are located within 50 kilometers of the coast, foreign individuals purchasing residential property here generally use a fideicomiso.

This does not mean you are leasing the property from the Mexican government or from the bank.

What Is a Fideicomiso in Mexico?

A fideicomiso is a Mexican bank trust used to allow foreign buyers to acquire residential property interests within Mexico's restricted zone.

A Mexican banking institution serves as the trustee, while the foreign buyer is named as the beneficiary of the trust.

Although the bank holds legal title as trustee, the beneficiary controls the beneficial interest in the property according to the trust agreement and applicable Mexican law.

As beneficiary, you can:

Live in and enjoy the property
Use it as a vacation or second home
Rent the property
Remodel or improve it, subject to applicable permits and regulations
Sell or transfer your beneficial interest
Name substitute beneficiaries for estate-planning purposes

Instruct the trustee in connection with permitted transactions involving the property

The bank does not simply get to use or sell the property as though it were the owner. Its role is to act as trustee under the fideicomiso.

Is a Fideicomiso a Lease?
No.

This is one of the biggest misconceptions about buying real estate in Mexico.

A fideicomiso is a trust arrangement, not a lease.

For foreign buyers purchasing residential property in coastal areas such as Los Cabos, the trust is the legal structure that allows them to hold and exercise the beneficial rights associated with the property.

How Long Does a Fideicomiso Last?
A fideicomiso established for property in Mexico's restricted zone may have a term of up to 50 years.

That does not mean you lose the property after 50 years.

Mexican law permits the trust term to be extended upon request, allowing the property to remain under the fideicomiso structure beyond the original term.

Financing a Property in Mexico in 2026

The financing market for foreign buyers in Mexico has evolved considerably.

Historically, Cabo real estate transactions were heavily cash-based, and traditional Mexican mortgages could be difficult or expensive for foreign buyers to obtain. Cash purchases remain common, particularly in the luxury market, but buyers today may have more options.

Depending on the property, development, buyer qualifications, and transaction structure, financing may include:

Developer financing for pre-construction and new developments
Seller financing on certain resale properties
Cross-border financing or mortgage products designed for international buyers
Other private or specialty lending solutions

Developer financing is especially common in the Los Cabos pre-construction market, where payment schedules may be offered during construction.

Seller financing can also be negotiated in some resale transactions, although down payments, interest rates, amortization schedules, balloon payments, and loan terms vary significantly.

There is no single interest rate that accurately represents financing in Mexico in 2026. Buyers should compare the total cost of financing, including interest, origination charges, closing costs, loan-to-value requirements, and prepayment conditions.

Looking for current financing options in Cabo? Contact Own In Cabo and we can help you explore solutions that may be available for your specific purchase.

Property Taxes in Los Cabos
Property taxes in Mexico are known as predial.

Los Cabos is often attractive to international property owners because annual property taxes can be comparatively low relative to many similarly valued properties in the United States and Canada.

However, it is no longer accurate to say that every Cabo home pays a fixed amount such as $300–$500 USD per year.

Property tax is calculated based on factors that include the property's cadastral value and classification, and applicable rates can vary depending on how the property is used.

Before purchasing, buyers should request the current predial statement for the specific property rather than relying on a general estimate.

Property Acquisition Tax in Los Cabos
This is one area where older Cabo real estate information is frequently outdated.

As of 2026, the Impuesto Sobre Adquisición de Inmuebles (ISABI) rate applicable to a standard real estate acquisition in Los Cabos is 3%, subject to the calculation rules established under local law.

This represents an increase from the 2% rate commonly referenced in older articles.

For tax purposes, the applicable property value is determined according to local law and can take into account the contractual value, cadastral or fiscal value, and appraisal value.

Your Notario Público and closing team should calculate the amount applicable to your specific transaction.

How Much Are Closing Costs When Buying Property in Cabo?
The acquisition tax is only one component of closing costs.

Foreign buyers should also budget for expenses that can include:

Acquisition tax
Notario Público fees
Fideicomiso establishment and bank fees
Government permits
Property appraisal
Public Registry fees
Certificates and administrative costs
Legal or closing services, when applicable
Financing costs, when applicable

Total closing costs vary according to the property's price, structure, appraisal, trust requirements, and individual transaction.

For this reason, buyers should obtain an itemized closing-cost estimate for the specific property before completing the purchase.

Why Recording the Correct Purchase Value Matters
Accurate documentation when purchasing property in Mexico is extremely important.

Your documented acquisition cost and other qualifying expenses can affect the calculation of taxable gain when the property is eventually sold.

Certain documented acquisition costs, improvements, commissions, and other allowable expenses may be considered when calculating taxable gain under Mexican tax law.

Owners should therefore retain their closing documents and valid tax invoices (facturas/CFDIs) for qualifying construction, improvements, and other deductible expenses.

Never rely on informal strategies intended to artificially reduce the recorded value of a real estate transaction. Discuss the tax consequences with the Notario Público and a qualified Mexican tax professional before closing.

Capital Gains Tax When Selling Property in Mexico
Capital gains taxation is another area where outdated information about Mexican real estate can cause confusion.

There is not a universal 30% capital gains tax that applies to every property sale.

The tax treatment depends on several factors, including:

The seller's tax residency
The property's documented acquisition value
The sale price
Qualifying deductions
Documented improvements
Applicable inflation adjustments
The property's use
Whether the seller qualifies for a principal-residence exemption

For nonresident sellers, Mexican tax law contains specific rules for income generated from the sale of Mexican real estate. The appropriate calculation should be determined before closing by the Notario Público and, when appropriate, a qualified Mexican tax advisor.

Mexico's Principal-Residence Capital Gains Exemption
Mexico does provide a potential income-tax exemption when a qualifying taxpayer sells their casa habitación, or principal residence.

However, the rule is more specific than simply owning a property for a certain number of years.

Under current Mexican tax law, a qualifying sale may receive an exemption for consideration of up to 700,000 UDIS, subject to applicable requirements.

The taxpayer must be able to demonstrate to the Notario Público that the property qualifies as their home using acceptable documentation.

The exemption is also subject to a frequency restriction: generally, the taxpayer must not have used the same principal-residence exemption on another home sale during the three years immediately preceding the sale.

Whether a particular foreign owner qualifies depends on their individual facts and documentation.

Do not assume that simply holding a Temporary or Permanent Resident visa automatically qualifies a property for the exemption.

Tax residency, immigration status, and eligibility for a real-estate tax exemption are related legal concepts but are not interchangeable.

Do You Need Mexican Residency to Buy Property in Cabo?
Foreign buyers generally do not need to become Mexican citizens simply to purchase residential real estate through a fideicomiso in Los Cabos.

Immigration status becomes a separate consideration if you intend to live in Mexico for extended periods, establish residency, work in Mexico, or address other immigration and tax-planning matters.

Anyone planning to spend significant time in Mexico should consult the appropriate Mexican consulate or immigration professional regarding Temporary Resident and Permanent Resident options.

Buying Property in Cabo: Work With the Right Professionals
Buying real estate in Mexico is different from buying property in the United States or Canada, but the process is well established.

A typical Los Cabos transaction may involve your real estate advisor, a Notario Público, a Mexican bank acting as fideicomiso trustee, closing professionals, and — depending on the transaction — attorneys, accountants, lenders, escrow providers, and other specialists.

The key is understanding the structure before you buy and making sure the property and transaction receive proper due diligence.

Ready to Own in Cabo?

Whether you're looking for an ocean-view condo in Cabo San Lucas, a luxury home in Palmilla, a golf property in Los Cabos, a vacation residence in San José del Cabo, or an investment property along the Baja coast, foreign ownership in Mexico is both possible and well established.

Own In Cabo can help you understand the buying process, explore available properties, evaluate financing options, and connect with the appropriate professionals for your transaction.

📧 info@ownincabo.com
📞 US: +1 (925) 963-9639
📞 Mexico: +52 624 160 1502

This article is provided for general informational purposes only and does not constitute legal, tax, accounting, immigration, or financial advice. Mexican laws, taxes, fees, and administrative requirements can change. Buyers and sellers should obtain advice from a qualified Notario Público, attorney, accountant, tax advisor, lender, or other appropriate professional regarding their individual circumstances.