North of Puerto, in Chila, several new developments are being planned., including Vivo Resorts, a condo project that is the dream child of former Canadian championship skier, Carey Mullen. Nearby, Cabo de las Olas, another Canadian development, is well underway. Infrastructure is in place: waterlines, underground power cables, state-of-the-art, ecologically-sound septic systems, as well as hundreds of palm trees. to adorn this pristine stretch of coastline.
![[casa grande]](images/casa_grande.jpeg "casa grande")
To the south at Rancho Neptuno, lots and custom built homes are attracting
great interest from overseas and national visitors. And in the heart of
Puerto, the 60 luxury condos at Villas Marinero will soon take shape
The fact is there are few places in the world more agreeable to live than
this little corner of Paradise; they're just not making real estate like
this anymore.
As Mexican city dwellers look to escape the chaos and violence of many parts of the country, Puerto and its environs offers an attractive alternative. And baby boomers from North America and Europe are learning of the charms of Puerto Escondido.
Buying or building your dream home is not without its pitfalls. So this is the first in a series of articles on what you should know before you begin. Our contributor Barbara Schaffer did it right. You can see more on her experience at barbaraschaffer.com
Foreigners are not permitted, under the Mexican Constitution, to own land within 50 km of the coast. They are, however, allowed to set up a 50-year, renewable, bank trust (fideicomiso) which gives them all the rights and responsibilities of ownership. But bank trusts can only be made on private land; i.e. land that has a deed (escritura). In Mexico, what isn't designated as private land is communal. Large parts of Puerto Escondido, specifically parts that belong to Santa María Colotepec, are communal. Communal land can only be bought and sold by Mexicans; title on this land is through an Act of Possession. Thus it behooves the foreign buyer to make sure that the property has a deed. If not, it may be possible to buy it by forming a Mexican corporation.
![[casa]](images/casa.jpeg "casa")
If you are considering buying or selling real estate here, be advised that
Oaxaca law changed in June. Now the property being sold must be assessed for
tax purposes by a licensed assessor. In the past, it was common practice to
understate the price of a property on the deed, so that the seller could
avoid paying the full amount of the capital gains tax. (It's 28% for
foreigners and 15% for Mexican nationals - unless the house was the primary
residence of a Mexican citizen for at least five years, in which case there
is no tax.) Under the new system, the assessed amount is closer to real
market value.
If you are selling a property, you can deduct the cost of improvements - such as building a house or adding a pool - from your capital gains tax. Speaking of taxes, if you rent out some or all of your property, you must pay a 25% tax on your rental income with no deductions permitted. (You need an accountant to get you through all this.)
However, for reasons much too murky and complicated to go into here, there was a land dispute between the counties of San Pedro Mixtepec and Santa María Colotopec over ownership and jurisdiction. The conflict has still not been resolved. This explains why one property in Lázaro Cárdenas, for example, may having a deed from Mixtepec and its neighbor an act of possession from Colotepec. On the other hand, the conflict has helped keep real estate prices relatively low, and it is probably the main reason that Puerto did not become a mega resort.
Barbara Schaffer is a poet and Spanish teacher: barbaraschaffer.com
Vicki Cole of Zicatela Properties and Lic. Alina Félix of Notaría Pública
No. 14 provided information for this report.
We urge you to consult with the professionals who can be found within these pages.