Every year thousands of Americans and Canadians buy homes and condos in Puerto Vallarta — legally, safely, and with full ownership rights. This guide, written by the real estate lawyers at Grupo Nar, walks you through the entire process: who can buy, how the fideicomiso works, what closing really costs, the taxes involved, and the mistakes that cost foreign buyers the most.

Can foreigners buy property in Puerto Vallarta?

Yes. The Mexican Constitution restricts direct foreign ownership within 50 km of the coast (the restricted zone), but the law provides two fully legal structures for foreigners: the fideicomiso (bank trust) for residential property, and the Mexican corporation for non-residential or business use. Both give you complete control: you can use, remodel, rent, sell, and leave the property to your heirs.

Fideicomiso vs. Mexican corporation: which one?

For a home, condo, or vacation rental you will almost always use a fideicomiso: a 50-year renewable trust where a Mexican bank holds title and you keep every ownership right, including naming heirs who inherit without probate. A Mexican corporation makes sense when the property is part of a genuine business — multiple units, commercial space, or development — because it carries accounting and tax obligations a private homeowner does not want.

The closing process, step by step

  1. Offer and promissory agreement. Terms are negotiated and a written agreement sets price, timeline, and conditions. Have a lawyer review it before you sign anything.
  2. Due diligence. Your lawyer verifies title, liens, property taxes, HOA standing, permits, and — critically — that the land is not unregularized ejido land.
  3. Escrow. Your deposit goes into a third-party escrow account, released only when all conditions are met.
  4. SRE permit and trust setup. For restricted-zone purchases, the Ministry of Foreign Affairs issues the permit and the bank prepares your fideicomiso.
  5. The Notary Public. A Notario Publico — a specialized public official, not your advocate — drafts the deed (escritura), calculates taxes, and formalizes the transfer.
  6. Closing and payment. All parties sign the deed before the Notary; escrow releases funds.
  7. Registration. The deed is recorded at the Public Registry of Property. From offer to registration, expect 30 to 90 days.

What does it cost to close?

Buyers typically pay total closing costs of roughly 5 to 8 percent of the purchase price: the property acquisition tax, Notary fees, SRE permit, trust setup and first-year bank fee, appraisal, and registration. Sellers pay the agent commission and their own capital gains tax. Ask us for an itemized quote for your specific transaction before you commit — we do this for free.

Taxes you should plan for

  • Acquisition tax — one-time, paid at closing through the Notary.
  • Predial — the small annual property tax, with discounts for early payment.
  • Capital gains (ISR) — due when you sell; how your purchase is deeded today determines your bill years from now.
  • Rental income tax — if you rent the property, the income is taxable in Mexico.

Our tax practice helps foreign owners structure purchases and sales so they never overpay. See also our guide to Mexican property taxes.

The five mistakes that cost foreign buyers the most

  1. Buying ejido land that was never legally converted to private property.
  2. Signing a Spanish contract you did not fully understand. Have every document reviewed by your own contract lawyer first.
  3. Paying deposits directly to a seller or developer instead of using escrow.
  4. Presale purchases without permit verification — always confirm the developer’s licenses, land title, and delivery guarantees.
  5. Under-declaring the purchase price in the deed to save on closing taxes — it multiplies your capital gains bill when you sell.

How Grupo Nar helps

Grupo Nar is a bilingual law firm in Marina Vallarta focused on real estate law for foreign buyers. We handle due diligence, contracts, fideicomiso setup, escrow coordination, and closing with the Notary — one team, one point of contact, flat fees quoted up front. If a deal ever goes wrong, our litigation team is in the local courts every week. Still have questions? Start with our buyer FAQ.

Talk to a lawyer before you sign

The first consultation is free. Call +52 322 135 7031 (MX) or +1 (213) 400-4820 (US/CA), or email santonelli@gruponar.com.