Get up-to-date information about what's happening in the Los Cabos real estate market.
03/01/08
"Saving" Trust Fees - The Real Cost
There is a persistent rumor around town that if you become a Mexican citizen you can put your property into Escritura and save yourself the annual trust fee of about $450 per year. This is probably being put out there by someone who makes a living processing citizenship papers. While like most good rumors it is partly true, it's the part they leave out that is important.
Yes, if you are a Mexican citizen you can own property in Los Cabos in an Escritura, the equivalent of fee-simple title. But if a property is already in a trust, and you elect to move it to an escritura there are costs involved. Because in point of fact, it is a change of ownership. The bank is the official owner of the property and when you dissolve the trust to move it into your own name that looks to the Mexican government as a sale. And they will be looking for their tax payment. International Land Title, a highly respected closing company here in Los Cabos just ran the numbers for me.
If the owners of a $600,000 house or condo become Mexican citizens it would cost them $28,000 US to move that property from their current trust into an escritura!!!!!! OUCH!
Bottom line: there are many wonderful reasons for becoming a Mexican citizen. But saying goodbye to your trust fees isn't one of them.
02/08/08
New Condos on the Beach
New Concept In Full Ownership
Condo Hotel ownership has thrived in some parts of the U.S. and Canada, and is now here in Cabo San Lucas. The Bay View Suites, adjacent to the Cabo Villas Resort, offers full ownership of two and four bedroom suites. However the property is designed to rent as a hotel suite when not being occupied by the owner. Bay View Suites are fully integrated into the Cabo Villas Beach Resort, and owners will have the use of all services of the existing hotel. Management will be provided by the developer and hotel management, which will allow owners to tap into their rental pool when the unit is available. Currently under construction the units feature spectacular views of MedanoBeach and the Arch. Owners will enjoy concierge service, full beach services, daily maid service and even room service from any of the hotel’s restaurants. When owners are not using the unit the hotel will integrate it into their inventory of suites and project 80% or higher occupancy. The seven story tower also offers underground parking and a beach club. Financing is available. Prices range from $600,000 to $3,200,000 during construction. Title insurance is available.
01/14/08
Inheriting Property In Mexico
I was recently contacted by a woman who had just inherited property in Cabo from her father. While we are all very good about telling buyers that the trust bypasses probate we aren't always very good at telling them what they should tell their heirs about what to do in case of their passing. So here is my reply, hopefully never to be needed.....
"Your inquiry was passed on to my because I am the Realty Executives broker in Cabo. You and your sisters own the property now, bypassing probate is one of the advantages of the trust. That said, it is HIGHLY recommended that you move yourselves into first position and establish new beneficiaries. If not it could significantly delay things should you decide to sell the property. The process is actually quite simple.
From your email adress I'm thinking you're Canadian? If that's correct you'll need to have the death certificate certified and then take it to the nearest Mexican consulate to be ratified. At the same time you'll all sign a letter of instruction to the bank holding the trust, have it notarized and take that to the consulate as well. The letter will instruct the bank to recognise you as the new primary beneficiaries. Once that is done the Notario will draw up a public instrument establishing you as the primary beneficiaries and that will be registered with the city authorities. There are no inheritance taxes, but the various legal fees will cost about $3,000 US.
We have several good closing companies here who could help you with this paperwork, if you would like I can give you their contact information. I would recommend using one of them as they are familiar with what needs to be done and can handle the paperwork on this end as well as guide you through the steps at the Mexican consulate. They are all fluent in English so you should have no problem working with them."
The only difference if the heir was in the US is that they could use an Apostille for the paperwork instead of having to go to the Mexican Consulate.
