If you are considering buying a home or condo in Cabo, you might be wondering what are the closing costs in Mexico? Closing costs in the United States and Canada typically run from 3% to 3.5% of the cost of the property.
However, in Mexico, closing costs are typically between 2% and 3%, and there is an additional 3% acquisition tax, which brings the total closing costs for homes, condos, and land in Cabo San Lucas, San José del Cabo, and other parts of Los Cabos to 5% to 6% of the purchase price. The acquisition tax in Mexico went from 2% to 3% starting in 2025. Here, real estate agent Jeff Schmidt discusses closing costs and what they cover.
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(408) 607-8349 (U.S.) [/one_third] [one_third] (624) 165-9553 (Mexico) [/one_third] [one_third] jeff@cabobeachrealty.com
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What Are Closing Costs?
Closing costs are fees and expenses that buyers pay at some point during the real estate transaction process. They are intended to cover various services related to the sale and transfer of property ownership.
What Do Closing Costs in Mexico Cover?
In Mexico, closing costs are similar to those in the United States and Canada, but they include some unique fees and may be structured differently. Here’s a breakdown of what typical closing costs in Mexico will cover.
- Notary fees: In Mexico, all property transactions must go through a notary, who certifies the legality of the transaction. Notary fees typically range from 1% to 2% of the purchase price.
- Acquisition tax: This state tax, also known as the Impuesto Sobre Adquisición de Inmuebles (ISAI), is 3% of the purchase price in Los Cabos.
- Appraisal and survey fees: These assess the property’s value for tax purposes, and typically cost a few hundred U.S. dollars, depending on the property’s location and size.
- Trust setup fees (for foreigners): If you’re a foreigner buying property in a restricted zone (within 100 km of the border or 50 km of the coast), you’ll need to set up a bank trust called a fideicomiso. This can cost $500 to $1,000 for setup; in addition, you will need to pay an annual fee (usually a few hundred U.S. dollars) to maintain the fideicomiso.
- Registration fees: Fees for registering the property in the public registry usually cost about 1% of the purchase price.
- IVA (value added tax): This tax only applies to certain professional fees like notary services and legal services (typically 16% of the service fee).
- Title insurance: This is optional in Mexico, but it can provide protection in case of title disputes. Fees for title insurance are usually around 0.5% to 1% of the property price.
Jeff works with trusted notary and real estate attorneys to oversee your real estate purchase and ensure that your real estate transaction and property is protected.
Are Closing Costs an Ongoing Fee?
No, closing costs are paid once. Our real estate attorney will provide you with an accurate closing cost quote, with a breakdown of individual fees. The closing costs may be paid in two installments, usually when you go into escrow and again when you make the final payment; in some cases, closing costs are paid in one fee at the closing of the real estate transaction. However, there are some ongoing fees to be aware of:
- Yearly property taxes (these are much lower than in the United States)
- Annual fideicomiso fees (this is a reasonable yearly fee)
- HOA fees, if applicable
Contact Jeff Schmidt
If you are interested in buying a home in Cabo, contact Jeff Schmidt to get listings or go on a tour. Jeff can answer any questions you may have about closing costs in Mexico, specifically here in Cabo.
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(408) 607-8349 (U.S.) [/one_third] [one_third] (624) 165-9553 (Mexico) [/one_third] [one_third] jeff@cabobeachrealty.com
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Cabo Real Estate Buyer’s Guide
Can Foreigners Buy in Mexico? What Is a Fido?
Why You Should Hire an Experienced Agent in Cabo
Property Financing in Cabo for Foreigners
How a Notary Protects Your Real Estate Transaction in Mexico
Soft Closing vs. Hard Closing
Transferring Power of Attorney
Do I Need Home Insurance in Cabo?