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Stunning Medano beach view from Cabo Villas, in Cabo San Lucas

You’ve fallen in love with Los Cabos.

The stunning coastline. The perfect weather. The vibrant culture.

You’re ready to make it your home, but the journey from dream to reality requires a solid plan, as outlined in our Los Cabos Buyer’s Guide.

And here’s what nobody tells you…

The Closing Cost Reality Check That Shocks Most Buyers

Picture this scenario:

You find your perfect property. You negotiate a great price. You’re ready to close.

Then your lawyer hands you the closing cost breakdown.

Your heart sinks.

The number is WAY higher than you expected.

Sound familiar?

Why Your Home Country Experience Is Actually Working Against You

Here’s the thing most affluent buyers don’t realize…

Everything you know about real estate closing costs is about to be turned upside down when dealing with Mexico real estate closing costs.

In the US, you might pay 2-3% in closing costs.

In Canada, maybe 1.5-2.5%.

But in Los Cabos, you’re looking at something completely different.

The Real Numbers: Los Cabos Closing Cost Percentages

Let me be brutally honest about what you’re actually going to pay:

Under $500K Properties: 6-9% of purchase price
$500K-$1M Properties: 5.5-6% of purchase price
$1M-$3M Properties: 5-5.5% of purchase price
Over $3M Properties: As low as 4% of purchase price

Yes, you read that right.

Your closing costs could be TRIPLE what you’re used to paying back home.

Why the Percentage Gets Better as Price Goes Up

Here’s something interesting most people don’t realize…

The higher your property value, the lower your closing cost percentage.

Why?

Because many costs are fixed amounts.

That $650 escrow fee is the same whether you buy a $400K condo or a $3M villa.

Those government certificates, permits or bank trust set up are fixed peso amounts regardless of property value.

So while a $400K buyer might pay 8% in closing costs, a $2M buyer might only pay 5%.

Calculate your specific percentage here based on your target price range.

Why These Costs Are So Much Higher (It’s Not What You Think)

The difference isn’t because Mexico is trying to rip you off.

It’s because you’re dealing with a completely different system.

Back home, you don’t pay for:

  • Notary fees (1-1.5% of property value)
  • Fideicomiso setup and annual fees
  • SRE permits for foreign investment
  • Complex government registrations

These aren’t “extras.”

They’re mandatory parts of the Mexican real estate system.

A Complete Breakdown of Los Cabos Mexico Real Estate Closing Costs

Here’s exactly what goes into those closing costs:

Costs Every Buyer Pays (Mexican or Foreign):

Escrow Fee: $650 (fixed)
Acquisition Tax: 3% of property value
Notary: 1-1.5% of property value
Closing Lawyer: $1,500-$4,000
Public Registry: 0.2-0.5% of property value
Plus various certificates and appraisals

Additional Costs for Foreign Buyers:

Fideicomiso Setup: ~$600 (MXN $12,000)
Fideicomiso Annual Fee: ~$600 (first year)
SRE Permit: ~$1,500 (MXN $30,000)
RNIE Registration: ~$300 (MXN $6,000)

Note: Peso amounts fluctuate with exchange rates

Want to see exactly what YOUR Los Cabos closing costs will be? Try our free Los Cabos closing cost calculator to get your personalized estimate in seconds.

The Tax Advantage That Changes Everything

Now, before you start thinking “These closing costs are ridiculous”…

Let me share something most buyers don’t know.

Something that completely changes the math.

Every Dollar in Closing Costs Becomes Tax Deductible

Here’s the beautiful part:

ALL your closing costs become tax deductible when you sell.

That $40K you paid in closing costs on your $750K property will reduce your capital gains tax dollar for dollar.

So if your property appreciates to $1M and you sell, your taxable gain isn’t $250K…

It’s $210K.

That closing cost “expense” just saved you thousands in taxes.

The Property Tax Advantage That Keeps Giving

But wait, it gets better.

While you’re enjoying your Los Cabos lifestyle, you’re paying property taxes of roughly 0.1% annually.

Compare that to back home:

United States: 1.1% average (some areas 2%+) Canada: 0.5-2.5% depending on province

On a $1M property, that’s the difference between:

  • Los Cabos: ~$1,000 per year
  • US/Canada: $5,000-$25,000 per year

The Real Math: Closing Costs vs. Ongoing Savings

Let’s say you pay $50K in closing costs on a $1M Los Cabos property.

Back home, you’d save maybe $30K in closing costs…

But you’d pay $10K-$20K MORE per year in property taxes.

After just 3-5 years, Los Cabos becomes the better financial choice.

Plus you get to deduct that $50K when you sell.

Even the Fideicomiso Annual Fee Makes Sense

Yes, you’ll pay ~$650 annually for fideicomiso (bank trust) maintenance.

But you’re saving $4K-$19K per year in property taxes compared to home.

The fideicomiso fee is less than what you’d pay in property taxes for just one month back home.

Calculate how much you’ll actually save when you factor in the tax advantages.

The Costly Mistakes I See Buyers Make

Here’s what happens when you don’t plan for these Los Cabos closing costs:

Scenario 1: You fall in love with a $750K property. You budget $20K for closing costs (like you would back home). Reality hits: you actually need $40K. Now you’re scrambling for extra funds or walking away from your dream property.

Scenario 2: You wire your down payment but forget about closing costs entirely. Your lawyer calls three days before closing asking for another $50K. Panic sets in.

Scenario 3: You try to negotiate these costs down, not realizing most are government-mandated. You waste weeks going in circles while your dream property slips away.

Sound stressful?

It doesn’t have to be.

The Education-First Approach That Changes Everything

Here’s how I help buyers avoid these costly surprises:

I walk you through every single cost BEFORE we start looking at properties.

No surprises. No last-minute scrambling. No stress.

You know exactly what to budget from day one.

Why You Can Trust This Information

As someone who’s lived in Los Cabos for over 4 years and navigated the Mexican real estate system myself, I’ve seen firsthand how these closing costs surprise even locals.

I’ve educated myself on Mexican property law, built relationships with the best notaries and lawyers, and helped buyers avoid costly mistakes.

Because at Selling Cabo Homes we believe in transparency - no hidden surprises, no last-minute shocks.

I hate going to a restaurant, ordering a $10 meal, and getting a $30 check because of hidden fees and taxes.

Your real estate transaction shouldn’t work that way either.

The Simple Truth About Working With an Expert

You have two choices:

Option 1: Figure this out yourself. Spend months researching Mexican property law. Make expensive mistakes. Deal with surprise costs and delays.

Option 2: Work with someone who’s already done the hard work. Someone who knows every cost, every process, every potential pitfall.

Someone who can show you exactly what you’ll pay before you fall in love with a property.

The choice is yours.

What Happens Next?

If you’re serious about Los Cabos ownership, you need to understand these costs.

Use our closing cost calculator to see your real numbers based on your budget.

It takes 30 seconds and could save you thousands in surprises.

For those ready to move forward with expert guidance from the Selling Cabo Homes team…

Schedule Your Complimentary 30-Minute Consultation

This consultation is designed for serious, committed buyers who value expertise and want to make informed decisions about Los Cabos property ownership.

During our call, I’ll:

  • Explain how the international buying process works
  • Share current market insights for your decision
  • Help you understand what steps make sense for your situation
  • Answer your questions about the process and market

This consultation is ideal if you are:

  • Exploring Los Cabos ownership and want to understand your options
  • Seriously considering a purchase but need clarity on the process
  • Ready to move forward with expert guidance to avoid costly mistakes
  • Financially qualified and looking for a trusted advisor, not a pushy salesperson

Whether you’re just beginning to explore, actively researching, or ready to start looking at properties, I’ll provide useful information based on where you are in the process.

Please note: I work with a select number of clients to ensure personalized attention and exceptional results. This consultation helps us both determine if we’re the right fit for your Los Cabos goals.

Schedule Your Consultation Here

P.S. Remember, Los Cabos closing costs aren’t like back home. They’re higher, more complex, and full of surprises if you’re not prepared. Get your personalized estimate here so you can budget properly and focus on finding your perfect piece of paradise instead of scrambling for extra funds at closing.


Frequently Asked Questions About Los Cabos Closing Costs

Q: What are the typical closing costs when buying property in Los Cabos?

A: Los Cabos closing costs range from 4-9% of the property value, depending on the price range. Properties under $500K typically see 6-9%, while luxury properties over $3M can be as low as 4%. This is significantly higher than US (2-3%) or Canadian (1.5-2.5%) closing costs due to Mexico’s unique legal requirements.

Q: What is a fideicomiso and how much does it cost?

A: A fideicomiso is a bank trust required for foreign buyers… is a bank trust required for foreign buyers purchasing property within 50km of the coast or 100km of international borders. Setup costs approximately $600 (MXN $12,000), with an annual maintenance fee of $600. This allows foreigners to legally own beachfront property in Mexico.

Q: Are Los Cabos closing costs tax deductible?

A: Yes! All closing costs become tax deductible when you sell the property, reducing your capital gains tax dollar-for-dollar. This can save thousands in taxes and significantly improves the investment math.

Q: What’s the largest closing cost component for foreign buyers?

A: The acquisition tax (ISABI) at 3% of property value is typically the largest single cost, followed by notary fees at 1-1.5% of property value. These are government-mandated and non-negotiable.

Q: How do Mexico real estate closing costs compare to property taxes?

A: While Mexico has higher upfront closing costs, ongoing property taxes are only ~0.1% annually versus 1.1-2.5% in the US/Canada. Most buyers save more in annual property taxes than they paid extra in closing costs within 3-5 years.

Q: Can I negotiate Los Cabos closing costs?

A: Most costs are government-mandated (acquisition tax, notary, registry fees) and cannot be negotiated. However, some service fees like legal representation may have flexibility. It’s important to budget for the full amount rather than expect significant reductions.

Q: What happens if I don’t budget enough for closing costs?

A: Insufficient closing cost budgeting can derail your purchase entirely. Many buyers budget based on their home country experience and find themselves $20K-$40K short at closing, forcing them to scramble for funds or lose their dream property.

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