Mexico

Registering Property in

Mexico

Listed below is a detailed summary of the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute.

The information appearing on this page was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 183 economies. The most recent round of data collection for the project was completed in June 2011.

  • Standard Property Transfer

  • Property Value: MXN 5,968,514.24
  • City: Mexico City

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No. Procedure Time to Complete Associated Costs
* 1 The notary obtains a certificate of good standing with the water service

Article 27 of the Financial Code of the Federal District establishes that the notary's obligations in property transfers include verifying that the seller has no outstanding bills for the water service. The Property Registry will also require proof of payment of all water bills before registering a property transfer. This proof can be provided with the receipts, but notaries will require a Certificate from the water company. In theory, this information should be available online (like in the case of the predial), but the information provided online is not always correct.

The Water Service will require the following information to process the certificate of good standing ("constancia de no adeudo de aguas"):
1. Last water bill
2. Last property tax bill
3. Official ID of the seller
4. Completed application
5. Payment of fees (fees are established in article 248, VIII of the Financial Code of the Federal District)
5. Powers of attorney and 2 witnesses if the seller does not request the certificate himself/herself.

Information on this procedure is available at: http://tramitesyservicios.df.gob.mx/index.php?option=com_content&view=article&id=298:constancia-de-adeudos&catid=106:agua-potable-&Itemid=486



Agency: Sistema de Aguas de la Ciudad de México (SACM) 		15 days (simultaneous with procedures 2, 3, 4 & 5) MXN 129
* 2 The notary obtains the Zoning Certificate of the property

The Property Registry will require that the Zoning Certificate be included in the supporting documentation of any application to register a property transfer. The Notary will take care of requesting the Zoning Certificate ("Certificado de Zonficacion del Uso de Suelo Especifico") at SEDUVI (Secretaria de Desarrollo Urbano y Vivienda, ie. Department of Urban Development and Housing). The cost is established in the Financial Code of the Federal District (article 257 fraction I). The office will take 10 working days to process the certificate.

The application for the Zoning Certificate shall include:
1.- Application (Form DU-03).
2.- Last receipt of payment of the property tax ("boleta predial")
3. Receipt showing payment of fees for the Zoning Certificate
4. Official ID
5.- Constancia de Alineamiento y Número Oficial vigente (if needed -- not needed for property transfers)
6.- Deeds (if needed)


Agency: SEDUVI (Secretaria de Desarrollo Urbano y Vivienda del Distrito Federal) 		15 days (simultaneous with procedures 1, 3, 4 & 5) MXN 820
* 3 The notary obtains a non-encumbrance certificate

Prior to the transaction and pursuant to Article 3016 of the Civil Code of the Federal District, a no-liens certificate must be obtained by the notary with respect to the real estate that will be purchased. Likewise, the said request will be considered by the Public Registry of Property as a preventive notice of the purchase operation. Out of the four certificates obtained by the notary, this is the only one that is absolutely necessary for the notary to proceed with the signing of the public deed.


Agency: Public Registry of Property of the Federal District ("Registro Público de la Propiedad y del Comercio del Distrito Federal") 		7 days (simultaneous with procedures 1, 2, 4 & 5) MXN 450
* 4 The notary checks the good standing of the seller on the property tax (predial)

The Property Registry will require proof of good standing certificate on property taxes. This can be provided with the receipts of payment of the predial tax (boletas). The notary will double check this information online: http://www.finanzas.df.gob.mx/fut/predial/predial/

However, notaries will still request a good standing certificate ("constancia de no adeudos de predial") to be absolutely sure that the Treasury has recorded all the predial payments of the seller. The notary will take care of requesting the good standing certificate at the municipality ("Delegacion"). The cost is established in the Financial Code of the Federal District (article 257 fraction I). The applicable Treasury office will take 10 working days to process the certificate.

Agency: Secretaria de Finanzas 		1 day if checked online or 2 weeks if certificate of good standing ("constancia de no adeudo") is requested. (simultaneous with procedures 1, 2, 3 & 5) MXN 120 if certificate of good standing ("constancia de no adeudo") is requested No cost if information is checked online
* 5 The notary requests a commercial valuation of the property

A commercial valuation is required by the Fiscal Code of the Federal Districit, since the commercial value will be one of the values taken into account to determine the taxable value of the property for the property transfer tax (Impuesto sobre Adquisicion de Inmuebles, ISAI). Article 116 of the Financial Code requires that the property transfer tax be calculated on the highest of the following three values: the purchase price; the cadastral value (which the seller can see on the last receipt of the property tax), and the value resulting of the commercial valuation undertaken by the fiscal authorities or authorized valuers.

The notaries have valuers they usually work with, but parties can hire the valuer of their choice. When banks are involved in the transaction, they will usually bring in the valuers they usually work with. Sometimes parties have a previous valuation, and the notary can have it reviewed to see if it suffices. However, these previous valuations are usually not fiscal ones and therefore another one has to be done to determine the value of the property for the ISAI tax, but also for the VAT tax to which commercial constructions are subject to when transferred (please note that the land is not taxable under VAT, just the commercial constructions).

Agency: Licensed valuer 		7 days (simultaneous with procedures 1, 2, 3 & 4) MXN 3000 - MXN 5500
6 The notary formalizes the sale purchase agreement

The notary public will request from the seller:

• Property title (escritura), which the seller already has
• Receipts evidencing the payment for real estate taxes for a period of five years (boletas del impuesto predial)
• Receipts evidencing the payment of water fees for a period of five years (boletas del servicio de agua)
• Public deed(s) containing the incorporation and by-laws of the seller company (escritura constitutiva), together with copy of any public deed(s) containing amendments to the by-laws of the seller company
• Public deed(s) containing the powers of attorney granted in favor of the seller’s representatives (for acts of domain and acts of administration in terms of the second and third paragraph of article 2554 of the Civil Code of the Federal District)
• Copy of the official identification of the seller's and buyer's representatives

The notary will procure on behalf of the parties:
• The zoning certificate (obtained in Procedure 2)
• The valuation (obtained in Procedure 3)
• Certificate of good standing with the water company (obtained in Procedure 1)
• Certificate of good standing in the property tax (obtained in procedure 4)

The buyer is subject to pay the acquisition tax ("Impuesto sobre Adquisiciones o Transmisión de Dominio"). In this respect, on the date of execution of the real estate purchase agreement before the notary public, said notary public will retain the above mentioned taxes and pay them before Treasury Department.

The scale of notary tariffs is with respect to the Notary Publics of the Federal District only. Other Mexican states have varying scales.

The seller will also have to pay the income tax and the value added tax as follows:

• The applicable Income Tax for transferors resident in Mexico is 29% on the gain (the excess of the sale price over the adjusted tax basis). The tax basis of real estates is in general terms the original cost of acquisition as updated for inflation.
• The value added tax (16%) is applicable only with respect to the constructions that conform to the property and therefore an allocation of the price to the land and constructions should be made in the sales agreement based on an appraisal. The value added tax will be shifted to the buyer.

In particular:

(a) Acquisition tax according to the following scale, from Art 130, Tax code of the Federal District:

Lower Value (in MXN) Higher Value (in MXN)  Fixed Fee  (in MXN) Rate over excess
0.12 80,794.19 152.31 0.00000
80,794.20 129,270.65 152.32 0.03163
129,270.66 193,905.79 1,685.63 0.03261
193,905.80 387,811.69 3,793.38 0.03261
387,811.70 969,529.22 10,116.65 0.03696
969,529.23 1,939,058.44 31,616.94 0.04565
1,939,058.45 Higher 75,875.94 0.04565

(b) Notary Public Fees:

I. In transactions up to MXN $ 127,917.00, a fixed quota of MXN $ 4,652.00
II. In transactions from MXN 127,917.01, the fixed quote shall be added with the amount which results applying the previous table to identify the amount under following table:

More than MXN up to the excess of the lower value  Rate
$ 127,917.01 $ 255,837.00 1.125%
$ 255,837.01 $ 511,673.00 0.975%
$ 511,673.01 $1,023,344.00 0.825%
$ 1,023,344.01  $ 2,046,691.00 0.675%
$ 2,046,691.01 $ 4,093,382.00 0.525%
$ 4,093,382.01  $ 8,186,764.00 0.375%
$ 8,186,764.01 $16,373,527.00 0.225%
$16,373,527.01 hereinafter 0.075%



3 days MXN 297311.85
7 Registration of the transfer of title at the Public Registry of Property of the Federal District

The notary public will proceed with the registration of the first testimony of the public deed containing the formalization of the purchase agreement of a real estate and the transfer of title, before the Public Registry of Property of the Federal District. After registration, the buyer will have to give notice to the corresponding water department, and any other company that provides any service to the property (i.e. electric company, water, etc.)

Agency: Public Registry of Property of the Federal District ("Registro Público de la Propiedad y del Comercio del Distrito Federal") 		30 - 90 days MXN 13,293
* Takes place simultaneously with another procedure.
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