If a friend told me over dinner that they were thinking about a home in Mexico, this is what I would say.
First, go in the month you would actually use it. A town that is perfect in February can be very different in August. Walk it at night. Find the grocery store. Sit in the café where people who live there go.
Second, choose the place before the property. San Miguel de Allende, the Riviera Nayarit, Todos Santos and the Riviera Maya are four completely different lives. The right town matters far more than the right kitchen.
Third, understand how you will own it. Near the coast or the border, foreigners usually hold title through a bank trust called a fideicomiso. It gives you the right to use, rent, sell and pass on the property, and it is a well established process. It just needs the right people.
Which is the fourth point: build your team before you fall in love. A licensed local agent, an independent notario and lawyer, and a lender if you need one. I introduce my clients to people I trust and stay with them through the purchase.
Fifth, plan the Canadian side. If your foreign property cost more than $100,000, you will generally need to report it to the CRA each year on form T1135, and any rental income is taxable here too. Talk to your accountant before you buy, not after.
And last, be honest about how you will use it. A winter escape, a family gathering place, a rental, or all three. Each one changes what you should buy.
Done well, it is one of the most joyful decisions a family can make.
Questions
Can Canadians buy property in Mexico?
Yes. Near the coast or border, foreigners usually hold title through a fideicomiso, a bank trust that gives full rights to use, rent, sell or pass on the property.
Do Canadians report property in Mexico to the CRA?
Generally yes, if the cost is more than $100,000, using form T1135. Rental income is also reported. An accountant will confirm what applies.
Read the guide: How to buy a second home abroad as a Canadian
A home in the place you fell in love with: Homes Abroad
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