What Are My Closing Costs When Buying a Vacation Home in Baja California Sur: Los Cabos, Todos Santos, or La Paz, Mexico?

When purchasing a property in La Paz, Baja California Sur, Mexico, several closing costs should be considered. Below are some of the common expenses associated with buying real estate in the region:

1. Transfer Tax (Impuesto sobre Adquisición de Bienes Inmuebles or “ISABI”)
   
   This tax is calculated as a percentage of the property’s assessed value and varies by state. In Baja California Sur, the transfer tax rate currently ranges from 2% to 4%.
   
   
2. Notary Fees
   
   Notary fees in Mexico are typically higher than in other countries. These fees cover the notary’s services, document drafting, and property registration. Notary fees generally range from 1% to 3% of the property’s sale price.
   
   
3. Title Search and Registration Fees
   
   These fees cover the costs of conducting a title search to ensure there are no liens or encumbrances on the property and registering it under your name. (Certificado Libre de Gravamen CLG). Additionally, certain certificates are also required, including those for water feasibility and current property tax status (Predial).
   
   
4. Appraisal Fee
   
   An appraisal is commonly required to determine the property’s value. The appraisal fee ranges from 0.1% to 0.5% of the property’s value. Starting in 2025, a commercial appraisal will be required for tax purposes.
   
   
5. Bank Fees
   
   If financing your purchase through a Mexican bank, additional fees may apply, such as loan origination fees, bank commissions, and administrative charges. These fees vary depending on the bank and loan terms.
   
   
6. Legal and Closing Costs
   
   Hiring a reputable attorney specializing in real estate transactions is highly recommended. Attorney fees typically range from 1% to 2% of the property’s value.
   
   
7. Title Trust (Fideicomiso)
   
   Foreign buyers purchasing property in restricted zones (within 50 km of the coastline or 100 km from an international border) must hold the title through a Fideicomiso (bank trust).
   
   
   • The setup cost varies depending on the purchase price.
     
     
   • There is an annual maintenance fee for the trust.
     
     
   • The Fideicomiso grants you ownership rights for 50 years, with an option to renew for another 50 years.

These costs are approximate and may vary depending on the specific property, location, and transaction details. Consulting with a local real estate professional or notary (Notario) is advisable to get an accurate estimate of your closing costs.

Real Estate Market Overview in Baja California Sur

The real estate market in Baja California Sur is booming, and prices remain attractive:

• New ocean-view condos start at $350,000 USD.
  
  
• New homes start at $400,000+ USD.
  
  
• Resale properties can be found under $350,000 USD, depending on age, size, condition, and location.

If you would like more information, please don’t hesitate to reach out. I would be happy to assist you and provide any details you need.

Stay tuned for the next article, where I’ll share more insights on buying a vacation home in Los Cabos, Todos Santos, and La Paz, Mexico.