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Living outside of one's home country can be the most rewarding and enjoyable time of life. Gathering information in advance and planning ahead will help you to avoid frustration. The ability to adopt is a quality that will help greatly, but preparation is the key.

Most people who consider living in Mexico do not want to duplicate their past environments. A part of the excitement of the adventure is having something completely different and enjoying the constant stimulation of a new culture. The Mexican people are open and friendly and you will find interaction with them quite enjoyable. As for the tens of thousands in the foreign community that have made central Mexico their home, we think we are a special lot. Join us in the adventure of Mexico and enjoy a new design for living.

Mexico has designed several different immigration status' for visitors in Mexico up to six months, without working. The FM -T may be easily and continually renewed by simply leaving Mexico within the allotted six month period, and then reentering.

The FM-3 is designed for someone who wants to live at least part time in Mexico, but does not necessarily intend to make this their permanent home. To be granted and FM-3 status, you must prove you have sufficient resources to be financially independent, or meet certain requirements to be able to work or own a business in Mexico. FM-3 "Rentista" status is available to anyone with a monthly income (from investments, social security or other retirement) of less than $1,000 USD plus under $500 USD for each dependent. If one owns property in Mexico, the amount of income required id reduced by nearly one-half. An individual with FM-3 status, because of the non-permanency of their residency, is allowed to own foreign-plated vehicles, and operate them in Mexico (see below for additional information).

The FM-2 status is designed for those who intend to permanently reside in Mexico, with qualifications only slightly more stringent than FM-3 status. After five years of successfully meeting the requirements of FM-2 (including restricted time out of Mexico), one may apply for "Inmigrado" status, which allows you to enjoy most of the rights and privileges of Mexican citizen, the primary exception being the right to vote. Inmigrado status does not require you give up your native citizenship, but holders may freely work and remain in Mexico without annual renewals of immigration paper.

There are restrictions on bringing and keeping foreign cars in Mexico, but it is helpful to understand from the offset that these are merely designed to protect the Mexican automobile industry against competition from illegally imported cars. Holders of the FM-T and FM-3 immigration status are allowed to drive foreign-plated vehicles in Mexico. Customs' laws basically state that foreigners may keep their cars in Mexico for the length of time corresponding to their visas. A permit is easily obtained through the aduana or customs agents at the border entrance point an is renewable through the local aduana. To be able to verify this, a copy of the FM visa should be carried in the car at all times. To drive legally in Mexico, a valid US or Canadian driver's license is all that is required. Excellent US, German and Japanese cars are now available for purchase in Mexico and the skills of Mexican mechanics, for maintenance and repair at fair prices, is widely known. Your Ajijic Real State Sales associate can answer any additional questions you may have or refer you to someone who can.

Purchasing a Home When buying property in Mexico there are factors to consider. With the cost of housing on the rise, purchasing real state can be a sound investment for the future. Considering the recent devaluation there are many undervalued properties on the market. It is a buyer's market and an opportune time to purchase the home of your dreams.

An important criteria to look for in a real state firm is professional affiliation. At lakeside there is a local group, Group Inmobiliario del Lago (GIL) as well as the National Organization of Mexican Realtors (AMPI). Also represented is the International Realtors Association (FARBCI). Brokers and their agencies should be affiliated with two or more of these organizations.

If you consider buying property in Mexico, you should seek professional real estate advice. Ajijic Real State is the professional full-service real estate office. Agents are on call to counsel, when appropriate, and to offer their professional service in locating the property that is right for you. Part of their job is helping you discover what you real estate needs might be and then helping you meet them.

How do you purchase property in Mexico?
Since 197, non-Mexican citizens have been able to purchase property in Mexico, with only coastal and border properties owned through a trust deed, established with a Mexican bank, with certain limitations on specific agricultural tracts

Financing
Real estate transaction in Mexico are generally cash transactions, with limited cases of owner financing available. The high cost of money (interest rates) within the Republic has historically made financing properties unattractive, however, the recent appearance of mortgage company services from the United States makes financing an option.

How does the trust deed work?
The bank (known as the trustee) holds the trust deed for the person who is purchasing the property (known as the beneficiary). This property is not part of the bank's assets and cannot be subject to a lien or attached for bank obligations. The beneficiary has all ownership rights to the property and may sell, lease mortgage, pass to heirs or do any other legal thing with the property.

Why trust deed ownership?
The trust agreement was established by the Mexican government for foreigners interested in owning property in Mexico. It has the benefit of the bank "overseeing" the deed. A further benefit has been that CO-owners can be listed on a trust deed using "and/or", solidaridad active. If two or more persons are listed, and are listed as "and/or", upon the demise of one the property automatically goes to the other(s) and probate is avoided. The importance of the designation "and/or" cannot be understated as this allows either to sell the property and does not required the agreement and signature of all.

How long does the trust deed last?
As of 1994, trust may be granted and extended in 50-year periods. If you purchase property currently held in a trust deed, a new 50-year period can be established or the existing trust deed may be assigned. Trusts are renewable at any time by simple application. Multiple properties may be held in one single trust

It was never the intent that the properties pass back to the government at the end of the trust period, which has been a common fear of purchasers this does not happen.

Trustee Fees
There is a nominal, annual fee charged by the trustee bank for management or the trust.

How are these trust deeds established?
The "fideicomiso" or trust is established by a Notary. In Mexico, the designation of an attorney as a Notary represents a high level of legal standing, and their services are required for the transfer of real estate. Because of the large number of foreign-owned properties in Mexico, and specially in areas such Ajijic, establishing a trust has become a routine procedure. It is not a complicated process, and standard forms are utilized. As part of the escrow process, Ajijic Real Estate will obtain this on your behalf.

Direct Deed Ownership
The deed is the history of the property and will indicate who is the legal owner. The direct Property Deed (Escritura Publica en Dominio Directo) is outright ownership of the property. The buyer is listed on the deed as the direct owner. There is no yearly or administration fee, as there is with a bank trust. However, with a Direct Property Deed there is a one time fee of approximately #350 USD for each foreigner who is registered on the deed. The process of receiving permission for a direct deed from Relaciones Exteriores takes a minimum of two weeks and is taken care of by your notary of choice. As of September, 1995, a beneficiary can be designated in a Direct Property Deed. Probate is not longer automatic with a Direct Property Deed an no will is necessary to pass on the property when the owner of record dies if a beneficiary is named. There is no "and/or" designation in a direct deed. For all property owners a Mexican will is strongly recommended. A notary can help you structure your will.

The Agreement
Congratulations. The offer you have made on the property you have selected has been accepted! Once an "Offer to Purchase Agreement" has been accepted, the closing process begins.

Escrow
The offer to purchase is validated by a ten percent (10%) deposit, held in a US dollar escrow account by Ajijic Real Estate when the offer is in dollars and in a peso account when the offer is in Pesos. The balance is payable upon the signing of all papers at the office of the "Notario" or Notary. Founds are held in escrow during the time needed to complete the closing process.

Obtaining Your Deed
In order to obtain the deed for your property, your sales associate will work with the public Notary to complete the following steps:

• Ensure the property is free and clear by checking the Land Registry Office. This is guaranteed by obtaining a no-lien certificate and tax statement from treasury Department (Hacienda). Additional checks are made to ensure there are no outstanding water bills or municipal taxes.
• Obtain a permit from the Ministry of Foreign Affairs to establish direct deed ownership.
• Establishment of Bank Trust or Fideicomiso.
• Obtain the appraisal for the assessed valued of the property.
• Prepare all documents for both buyer and seller.

When all of this items have been completed, the remaining funds due are transferred by the buyer into the escrow account and the Notary presents the legal transfer papers to be signed. The Notary is the attorney of record and the unbiased, official representative of the government. The Notary has a fiduciary responsibility to both parties and sanctions the contract from a tax and legal point of view. The buyer and seller need not be present at the closing, but may be represented by their Ajijic Real Estate Associate via a power of attorney. The buyer chooses the notary, as he pays the notary fees and attendant closing cost.

Closing Costs
Closing costs are paid by the buyer, and to some extent depend on the value of your property. They include a transfer tax, legal Notary fees, a property registration fee, fees for the tax certificate, title search fees and property appraisal, as well as miscellaneous clerical expenses. Your Ajijic Real Estate Sales Associate can supply you with a detailed pre-closing cost estimate once an offer is made.

The seller pays all capital gains taxes and real estate fees. Simply stated, this is a thirty-five percent 35%0 tax on the difference between assessed values at the time of purchase and sale, with adjustments made for inflation. Your sales associate can provide you with detailed information on future capital gains taxes, and assist you in your tax planning.

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