“International Real Estate – For Sale in Mexico” 
House Hunting In Mexico

MARKET OVERVIEW

Oceanfront homes on Cozumel start at about $1 million, said Nancy Edwards, a broker with Cozumel Living Real Estate; condominiums sell for around $500,000. Smaller houses without ocean views sell for $250,000.

The area’s housing market has not experienced “many spikes and drops,” according to Ms. Edwards, since most vacation properties are paid for in cash. It’s a buyer’s market right now in Cozumel, she said. Many Americans are selling their second homes to raise cash, and there is inventory left over from developments built in recent years.

In an October 2008 report, Prudential Real Estate Investors said that scarcer credit was causing problems for construction companies across Latin America, and that income from tourists visiting Mexico declined in 2008.

Although Hurricane Wilma did a lot of damage to the island’s oceanfront homes in 2005, Ms. Edwards says almost everything has since been rebuilt.

WHO BUYS IN COZUMEL

Most foreign buyers in Mexico come from the United States and Canada, Ms. Edwards said. Foreigners are more likely to buy on the mainland than in Cozumel, but she has seen more Canadian buyers recently because of the strength of the Canadian dollar.

BUYING BASICS

The federal government limits foreign ownership throughout a coastal zone to which Cozumel belongs. Foreigners buying property there must do so through either a Mexican corporation or a bank trust (called a fideicomiso), according to Ms. Edwards. Most buyers use a bank trust, which costs about $1,500 to set up, and which lasts for a maximum period of 50 years — though it automatically renews for 50 years when it expires.

During that period, the bank administers the property. The foreign buyer who controls the trust has all the rights of a property owner, including the right to sell or lease the property.

Closing costs include a Federal Ministry Permit of $1,300 and a transfer tax of 2 percent of the purchase price, Ms. Edwards said. Buyers pay an additional tax of 1 percent to register the property. Notaries who draw up the legal paperwork generally charge buyers a flat rate of around $2,000, though some bill for up to 2 percent of the purchase price. There is a 10 percent government tax on notary fees. Ms. Edwards said additional closing costs, including an appraisal and a title search, are around $600.