Buyer Guide · Los Cabos
The Real Cost of Buying a Home in Cabo San Lucas
Buying a home in Los Cabos involves more than the purchase price. Buyers should plan for one-time closing costs — an acquisition tax, notary fees, and the cost of establishing the bank trust — plus ongoing costs like the trust’s annual fee, property tax, and any HOA dues. Here is how those pieces fit together.
One-time closing costs
When you purchase, the main one-time costs are the property acquisition tax, the notary’s fees for handling the legal transfer, and the cost of setting up the fideicomiso bank trust. These are typically the buyer’s responsibility and are paid at closing.
Closing costs here are higher than most US buyers expect, and they work out as a percentage of the purchase price that falls as the price rises. The biggest component is a 3% acquisition tax on the purchase price. On top of that sit fixed costs — notary and attorney fees — that don’t change with price, so they weigh more heavily on smaller purchases. As a rough guide: a small purchase around $100,000 can run as high as 9–10%; a $300,000 to $500,000 home lands near 6.25%; and a $1 to $2 million home comes down to about 4%, in the high threes to low fours. The fideicomiso setup — about $2,000 — is part of these closing costs.
Ongoing costs of ownership
After purchase, recurring costs include the annual fee paid to the trustee bank for administering the fideicomiso, annual property tax (known as predial, which in Mexico is generally modest compared to the US), and — for homes in managed communities — HOA or community dues.
In practice, the trustee bank’s annual fee for administering the fideicomiso comes to approximately $500 USD. Predial stays modest by US standards, and HOA or community dues vary widely from one community to the next.
Costs to consider if you’ll rent the property
Many Los Cabos owners offset costs by renting their home when they’re not using it. If you plan to, factor in property management fees, furnishing, and applicable taxes on rental income.
⚑ Brent to confirm — Note typical property-management fee ranges and flag that rental income has tax implications in both Mexico and the US, which a tax professional should advise on. Avoid specific tax-rate claims.
Frequently asked questions
- What are the closing costs when buying a home in Cabo?
- Closing costs typically include the property acquisition tax, notary fees, and the cost of establishing the fideicomiso bank trust, generally paid by the buyer at closing.
- Is property tax high in Cabo San Lucas?
- Mexican annual property tax, called predial, is generally modest compared to property taxes in the United States.
- What ongoing costs should I expect as an owner?
- Plan for the trust’s annual bank fee, annual property tax (predial), and, in managed communities, HOA or community dues. If you rent the home, add management fees.