The first time I sat across from a Mexican notario and heard "fideicomiso," "escritura," "avalúo," and "predial" in the same sentence, I wished someone had handed me a cheat sheet. This is that cheat sheet — 60+ Mexican real estate terms defined in plain English, organized by when you will encounter them during your Cabo property purchase.
Key Takeaways
- ✓ The 10 most critical terms: fideicomiso, escritura, notario público, predial, avalúo, ISR, ISAI, RFC, zona restringida, promesa de compraventa
- ✓ Mexico's notario público is NOT a US notary — it is a government-appointed attorney with binding legal authority
- ✓ Understanding these terms prevents misunderstandings that can cost thousands — especially around taxes and closing costs
- ✓ Bookmark this page and reference it during your purchase process
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Contact Our TeamOwnership and Legal Structure
Fideicomiso (fi-dei-co-MI-so) — A bank trust that holds title to property on behalf of a foreign buyer. Required for foreigners buying in Mexico's restricted zone (within 50 km of the coast). The bank is the trustee, you are the beneficiary with full rights to use, rent, sell, and inherit the property. Established for 50 years, renewable indefinitely. Cost: $1,500–$2,000 setup, $500–$800/year maintenance. Full guide →
Zona restringida (SO-na res-trin-HI-da) — The "restricted zone" extending 50 km from any coastline and 100 km from any international border. Foreign individuals cannot hold direct title in this zone — they must use a fideicomiso or a Mexican corporation. All of Los Cabos falls within the restricted zone.
Dominio pleno (do-MI-nio PLE-no) — Fee simple direct ownership. Available to foreigners only outside the restricted zone (Mérida, San Miguel de Allende, Mexico City). Not available in Los Cabos.
S.A. de C.V. (Sociedad Anónima de Capital Variable) — A Mexican corporation with variable capital. An alternative to the fideicomiso for foreign property ownership — the corporation holds the property directly. More complex to set up and maintain than a fideicomiso, but preferred for commercial properties, multiple holdings, or when you want to avoid the bank as trustee. Full guide →
Poder notarial (po-DER no-ta-RIAL) — Notarized power of attorney. Allows someone to act on your behalf for property transactions — signing the escritura, making payments, handling government filings. Essential if you cannot be present at closing. Full guide →
Beneficiario (be-ne-fi-cia-RIO) — The beneficiary of the fideicomiso — you, the buyer. You hold all rights to use, possess, improve, rent, sell, and will the property. The bank holds legal title as trustee, but you have all practical ownership rights.
Fiduciario (fi-du-cia-RIO) — The trustee bank in a fideicomiso arrangement. Major banks operating fideicomisos in Los Cabos include BBVA, Scotiabank, Santander, Banorte, and Monex.
The Transaction: From Offer to Close
Promesa de compraventa (pro-ME-sa de com-pra-VEN-ta) — The purchase agreement or promise to buy/sell. This is the contract between buyer and seller that outlines price, terms, contingencies, deposit, and closing timeline. It becomes binding once signed by both parties. Full guide →
Arras / Enganche (A-rras / en-GAN-che) — Earnest money deposit. Typically 5–10% of the purchase price, held in escrow or by the notario. If you back out without a contractual right to do so, you can lose this deposit.
Escritura (es-cri-TU-ra) — The property deed. The official notarized document that formally transfers ownership. Executed before a notario público and registered with the Registro Público. Your escritura is your proof of ownership. Full guide →
Notario público (no-TA-rio PÚ-bli-co) — A government-appointed legal professional who validates and formalizes real estate transactions. This is NOT a US notary public. In Mexico, a notario is a fully trained attorney with a special government appointment who has legal authority to authenticate documents, verify property titles, calculate and collect taxes, and register transactions. Their fees are part of closing costs. Full guide →
Escrow — Same concept as in the US — a neutral third party holds funds during the transaction. Mexico does not have a government-regulated escrow system like the US, so international escrow companies (Stewart Title, First American, Fidelity) are commonly used for foreign buyer transactions. Full guide →
Avalúo (a-va-LÚ-o) — Official property appraisal conducted by a certified appraiser. Required for all property transactions. The notario uses the avalúo to calculate taxes. The appraised value is often lower than the actual transaction price (this is normal and legal). Full guide →
Certificado de libertad de gravamen — Certificate of no encumbrances. Issued by the Public Registry, confirming the property has no liens, mortgages, or legal claims against it. Your attorney or notario obtains this during due diligence. Full guide →
Registro Público de la Propiedad — The Public Registry of Property. The government office where property ownership, fideicomisos, liens, and encumbrances are recorded. Registration of your escritura here is what makes your purchase legally effective against third parties.
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Book a CallTaxes and Government Fees
Predial (pre-DIAL) — Annual property tax. Assessed by the municipal government, typically 0.1–0.15% of the assessed (catastral) value. Dramatically lower than US property taxes. Paid annually in January (with an early-payment discount of 10–15%). Full guide →
ISAI (Impuesto Sobre Adquisición de Inmuebles) — Property acquisition tax. Paid by the buyer at closing, typically 2–3% of the higher of the transaction price or the assessed value. This is the single largest component of closing costs. Full guide →
ISR (Impuesto Sobre la Renta) — Income tax. Applies to rental income (monthly provisional returns) and capital gains on property sales (calculated and withheld by the notario at closing). Rates are progressive, up to 35%. Full guide →
IVA (Impuesto al Valor Agregado) — Value-added tax, currently 16%. Applies to construction costs on new builds, agent commissions, and many professional services. Does not apply to the land value portion of a property purchase or to resale transactions between individuals.
RFC (Registro Federal de Contribuyentes) — Mexico's federal taxpayer identification number. Needed for generating facturas (tax receipts) and deducting improvement costs from capital gains. Getting one is optional for a simple purchase but essential if you plan to rent or eventually sell. Full guide →
Factura (fac-TU-ra) — Official tax receipt/invoice issued through SAT's electronic system. Required to deduct renovation and improvement costs from capital gains tax. Only businesses and individuals with an RFC can issue or receive facturas.
CURP (Clave Única de Registro de Población) — Mexico's unique population registry code. A prerequisite for obtaining an RFC. Foreign residents can obtain a CURP through INM as part of the residency process.
Catastro / Valor catastral — The municipal property registry and the assessed value it assigns to each property. The valor catastral is typically lower than market value and is used to calculate predial (property tax) and sometimes ISAI (acquisition tax).
Land and Zoning
Ejido (e-HI-do) — Communal agricultural land. Cannot be legally sold to private buyers unless it has been formally converted to private property through a process called dominio pleno. Buying ejido land that has not been properly converted is one of the highest-risk transactions in Mexican real estate. Full guide →
ZOFEMAT (Zona Federal Marítimo Terrestre) — The 20-meter-wide strip of federal land along every Mexican coastline, measured from the mean high tide line. No private ownership is possible. Concessions can be obtained for use (beach clubs, restaurant terraces) but the land remains federal. All Mexican beaches are constitutionally public. Full guide →
Uso de suelo — Land use/zoning designation. Determines what can be built on a property — residential, commercial, mixed-use, tourist/hotel, agricultural. Verify before purchasing, especially for commercial plans.
Plano de localización — Location plan or survey showing the property's boundaries, dimensions, and position within the larger development or neighborhood.
Derecho de vía — Right of way or easement. Access corridors that must remain unobstructed — road access, utility lines, drainage.
Fraccionamiento (frac-cio-na-MIEN-to) — A subdivided residential development, similar to a US subdivision or master-planned community. Most Cabo developments (Pedregal, Quivira, Diamante) are legally structured as fraccionamientos.
Construction and Development
Obra nueva — New construction. Refers to a newly built property that has never been occupied.
Preventa — Pre-sale or pre-construction sale. Buying a property before it is completed, usually at a discount of 10–15% from projected completed value. Payments are made in installments during construction. Full guide →
Entrega — Delivery or handover. The date when the developer delivers the completed property to the buyer.
Vicios ocultos (VI-cios o-CUL-tos) — Hidden defects. Mexican law provides buyers with legal protection against undisclosed construction defects, similar to implied warranty concepts in US law. Full guide →
Permiso de construcción — Building permit from the municipal government. Required before any construction or major renovation. The developer or your contractor obtains this.
Manifestación de obra — Declaration of completed construction. Filed with the municipality when a building project is finished, triggering a final inspection and the update of property records.
Ongoing Ownership
Condominio / Régimen de propiedad en condominio — Condominium regime. The legal framework for shared-ownership buildings, defining common areas, private areas, HOA obligations, and voting rights. Equivalent to US condominium declarations and CC&Rs.
Cuota de mantenimiento — Maintenance fee or HOA fee. Monthly or quarterly payment covering common-area upkeep, security, amenities, and reserve funds. Full guide →
Fondo de reserva — Reserve fund within an HOA, set aside for major repairs and capital improvements. A healthy reserve fund is 20–30% of annual maintenance collections. Full guide →
Arrendamiento — Rental/lease agreement. The legal contract between landlord and tenant for property rental.
Testamento — Will. Mexican property should be covered by a Mexican will (testamento mexicano) to ensure smooth inheritance. US wills may not be recognized by Mexican authorities for property transfer purposes. Full guide →
SRE (Secretaría de Relaciones Exteriores) — The Ministry of Foreign Affairs. Issues the permit that authorizes banks to create fideicomisos for foreign buyers. The SRE permit is a standard part of the fideicomiso establishment process.
INM (Instituto Nacional de Migración) — National Immigration Institute. Handles visa applications, residence cards, and immigration matters for foreigners in Mexico.
SAT (Servicio de Administración Tributaria) — Mexico's tax authority, equivalent to the IRS. Handles RFC registration, tax filings, and compliance. Full guide →
CFE (Comisión Federal de Electricidad) — Mexico's national electric utility. Residential electricity rates are subsidized but on a tiered structure — exceeding the subsidized threshold (DAC) dramatically increases your rate. Full guide →
PROFECO (Procuraduría Federal del Consumidor) — Federal Consumer Protection Agency. Handles complaints about developers, builders, and service providers. Full guide →
Ready to Put This Knowledge to Work?
Knowing the vocabulary is step one. Working with a team that speaks both languages — legal and literal — is what gets you to closing day with confidence.
Start Your SearchFrequently Asked Questions
What is the most important Mexican real estate term for foreign buyers?+
Fideicomiso (bank trust) is the most critical term. It is the legal mechanism that allows foreigners to own property in Mexico's restricted zone (within 50 km of the coast or 100 km of an international border). Without understanding how a fideicomiso works, you cannot buy coastal property in Cabo. It costs $1,500–$2,000 to establish and $500–$800/year to maintain.
What is the difference between escritura and título de propiedad?+
An escritura is the notarized deed document that formally transfers property ownership, executed before a notario público and registered with the Public Registry. Título de propiedad is a general term for 'property title' or proof of ownership. In Mexico, the escritura IS your título — it serves as both the deed and the proof of title. There is no separate title certificate like in some US states.
What does ISR mean in Mexican real estate?+
ISR stands for Impuesto Sobre la Renta — income tax. In real estate, ISR applies to two main situations: capital gains tax when you sell property (up to 35% on the profit), and income tax on rental revenue (progressive rates up to 35%). The notario calculates and withholds the capital gains ISR at closing. Rental ISR is filed monthly through provisional returns.
What is ZOFEMAT and why does it matter?+
ZOFEMAT (Zona Federal Marítimo Terrestre) is the 20-meter strip of federal land that runs along every Mexican coastline. No private entity can own ZOFEMAT land. Beachfront property owners can obtain a concession to use the adjacent ZOFEMAT strip, but the beach itself remains public. This means there are no truly 'private beaches' in Mexico — all beaches are public by constitutional law.
Do I need to learn all these terms before buying in Cabo?+
No — you need a bilingual real estate attorney and a good agent who will translate and explain everything during the process. But understanding the key 15–20 terms (fideicomiso, escritura, notario, predial, avalúo, ISR, ISAI, RFC, SRE permit, promesa de compraventa, IVA, ZOFEMAT) will make you a more informed buyer and help you ask better questions. Bookmark this glossary and reference it during your purchase.
Aaron Cuha
Real Estate Advisor & Los Cabos Market Expert
Real estate advisor and founder of Living In Cabo. 15+ years helping families navigate complex real estate decisions. Strategic partner with Ronival — Baja's largest brokerage.
