Buying Property in Cancun: Fideicomiso, Taxes and Investor Math
Foreigners cannot own coastal property outright — but the bank-trust (fideicomiso) workaround is standard. Plus closing costs, taxes, and what the numbers actually look like.
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# Buying Property in Cancun: Fideicomiso, Taxes and Investor Math
Cancun is inside Mexico's **Restricted Zone** (within 50 km of any coast or 100 km of any border). Foreigners cannot hold direct title — but you can hold property through a **fideicomiso**, a bank trust that has been the standard tool since the 1970s. Hundreds of thousands of foreigners own this way. It is not a workaround; it is THE way.
## How a fideicomiso actually works
A Mexican bank (the trustee) holds title. **You are the beneficiary** and have every right of an owner — sell, lease, will, renovate. The trust runs for 50 years, fully renewable. Annual fee: **$500–700 USD**, plus a one-time setup of $1,500–2,500.
For purely commercial properties (no residential use), you can alternatively form a Mexican corporation (S.A. de C.V.) and have the corp own the property directly. Cheaper long term, more paperwork.
## Closing costs — real numbers
Plan for **6–8% of purchase price** on top of the sale price:
| Cost | % |
|---|---|
| Acquisition tax (ISAI) | 2.0–4.5% |
| Notary fees | 1.0–1.5% |
| Registration | 0.5% |
| Appraisal + permits | 0.5% |
| Fideicomiso setup | ~0.3% |
| Legal counsel (do not skip) | 0.5–1.0% |
## Ongoing taxes
- **Predial (property tax)**: extremely low — typically $200–800 USD/year on a $200–400K condo
- **ISR on rental income**: 25% withholding on gross rent for non-residents, OR a progressive rate (up to 35%) if you become a tax resident and deduct expenses. Most absentee owners use a property manager who handles the withholding.
- **Capital gains on sale**: 25% of gross OR 35% of net gain (you choose). Significant deductions available if you have receipts in your CFDI fiscal name.
## What returns actually look like (Cancun condo, 2024)
A representative 2BR condo in Puerto Cancun, $280K USD:
- Long-term rental (12-month lease): $1,400/month × 11 months occupancy = **$15,400/yr gross**, ~5.5% cap rate before tax
- Vacation rental (Airbnb): $190/night × 60% occupancy = **$41,600/yr gross**, ~14.8% gross. After 25% management, 25% withholding, HOA, utilities, vacancy — net is closer to **6–8%**
- Hotel Zone studio at the same price: lower yield but stronger appreciation
## Where the legal traps are
1. **Ejido land** — communal land that cannot legally be sold to anyone. Often listed by unscrupulous agents at "amazing" prices. Walk away.
2. **Pre-construction** — verify the developer's permits (uso de suelo, licencia de construcción) before deposit. Several Cancun developers have left projects half-built.
3. **HOA delinquency** — when you buy, the unit inherits unpaid HOA fees. Get a "constancia de no adeudo" before closing.
4. **CFE meter in seller's name** — common, fixable, but block closing until done.
## Recommended team
- Bilingual real estate lawyer (NOT the seller's lawyer) — $1,500–3,000 flat
- Notario público — required by law, you pick which one
- Independent property inspector — $200–400
- Tax advisor familiar with both your home country and Mexico — critical if renting
## Two strategic notes
- The **Mayan Train and Tulum airport** opened in late 2023. South-of-Cancun areas (Puerto Morelos, Playa del Carmen, Tulum) are seeing 8–15%/year appreciation as a result. Cancun proper has been more stable, 4–6%.
- Pre-sale (preventa) discounts of 15–25% are real, but only buy from developers with finished prior projects you can visit.