Frequently Asked Questions

Yes. Canadians can legally own property in Mexico, including beachfront and resort areas. Because the Mexican Constitution restricts direct foreign ownership within 50km of a coastline or 100km of a border, most Canadian buyers use a fideicomiso — a bank trust administered by a licensed Mexican bank. Under a fideicomiso, the bank holds legal title while you hold all beneficial rights: you can use, rent, sell, improve, or pass the property to your heirs exactly as you would with direct ownership. The fideicomiso has been the standard mechanism for foreign property ownership in Mexico since 1973, and is used safely by tens of thousands of foreign buyers each year. In non-restricted zones (such as Mexico City), foreigners can hold direct title.

Yes, when done correctly. The key is working with properly qualified local professionals — a licensed real estate agent, a notario público (in Mexico), or a local real estate attorney (in Costa Rica and the DR), and ideally a Canadian accountant familiar with foreign property. The notario proceso in Mexico provides significant legal protection: the notario is a government-appointed lawyer who verifies clear title, confirms no liens, and registers the transaction in the public property registry. Tens of thousands of Canadians own property in Mexico, the Dominican Republic, and Costa Rica without incident. The risks come from working with unvetted agents, skipping due diligence, or purchasing in areas with unresolved title issues — all of which Compass Abroad helps you avoid.

Most Canadian buyers use one of three methods. First, cash — typically the proceeds of a property sale, an RRSP, or accumulated savings. Second, a Home Equity Line of Credit (HELOC) against your Canadian property, which is the most common method among buyers who are not selling a Canadian asset. HELOCs typically offer prime-rate lending with no foreign exchange risk on the Canadian side, and the interest may be deductible if the property is used to earn income. Third, developer financing — many Mexican and Caribbean developers offer in-house financing at 8–15% over 5–10 years with 30–50% down, useful for pre-construction purchases. Local mortgages from Mexican or Dominican banks are available but come with higher rates and stricter qualification requirements for foreigners. We recommend consulting a Canadian mortgage broker and a tax accountant before choosing your financing method.

There are two main Canadian tax obligations when you own foreign property. First, if the total adjusted cost base (ACB) of all your foreign property exceeds CAD $100,000, you must file a T1135 Foreign Income Verification Statement annually with your T1 personal tax return. Penalties for non-filing start at $25/day up to $2,500/year, with gross negligence penalties of up to 5% of the property's cost. Second, any rental income earned on the foreign property must be reported on your Canadian tax return as foreign income. The good news: if the property is for personal use only and its cost is below $100,000, no T1135 is required. Capital gains on sale of a foreign property are also taxable in Canada — your adjusted cost base is set in Canadian dollars at the time of purchase, so currency movements can affect your gain calculation. A Canadian accountant with foreign property experience is essential.

A fideicomiso is a Mexican bank trust — a legal contract in which a licensed Mexican bank (the trustee) holds legal title to a property on behalf of a foreign beneficiary (you). You hold all beneficial rights: the right to use, occupy, rent out, improve, sell, mortgage, and pass the property to your heirs by naming successor beneficiaries. The bank cannot use or sell the property without your instruction. Fideicomisos are renewable 50-year trusts and cost approximately $500–700 USD/year in annual trust fees plus ~$1,500 USD in setup costs. Major banks serving as fidecomiso trustees include HSBC Mexico, Banorte, and Scotiabank Mexico. The fideicomiso is legally defined in Article 27 of the Mexican Constitution and regulated by the Secretaría de Relaciones Exteriores. It is as secure as direct title — hundreds of thousands of Americans and Canadians have used fideicomiso ownership safely for over 50 years.

Yes, effective January 11, 2024, Canada joined the Hague Apostille Convention, which simplifies the authentication of Canadian documents for use in over 120 member countries including Mexico, Costa Rica, and the Dominican Republic. An apostille is a standardized authentication certificate that confirms the legitimacy of a public document (such as a passport, birth certificate, or notarized document) for international use. For your property purchase, your notary or local attorney may require apostilled copies of your passport or other identity documents. To obtain an apostille in Canada, contact Global Affairs Canada (for federal documents) or your provincial government (for provincial documents). The process typically takes 2–6 weeks and costs $35–75 CAD per document.

Closing costs vary significantly by destination. In Mexico, expect 6–9% of the purchase price: notary fees (2–3%), acquisition tax (2%), fideicomiso setup (~$1,500 USD), plus registration fees and title insurance if applicable. In Costa Rica, closing costs are 3–5% of the purchase price: transfer tax (1.5%), stamps and registration (0.5–1%), legal fees (1–2%), and a capital gains tax withholding on the seller's side. In the Dominican Republic, closing costs are approximately 3–4%: property transfer tax (3%), notary and registration fees (0.5–1%). Puerto Rico, as a US territory, follows US real estate law: typical buyer closing costs are 2–3%. Always verify current rates with your local attorney at the time of purchase, as tax rates are subject to change.

In Mexico, the closing process is overseen by a notario público — a government-appointed lawyer with special authority to authenticate transactions, verify clear title, and register the transfer in the Registro Público de la Propiedad. The notario works for neither buyer nor seller; their role is to ensure the transaction is legally sound. You will also need a fideicomiso permit from the Ministry of Foreign Affairs if buying in a restricted zone. In Costa Rica, a licensed local attorney handles closing. Costa Rica has a well-developed real estate legal system with a functioning title registry; closings typically happen through an escrow process. In the Dominican Republic, a local attorney (notario público) oversees the closing, and title transfer is registered with the Registro de Títulos. The DR issued a new condominium law in 2021 that increased protections for foreign buyers. In all three countries, working with a buyer-side attorney or the notario directly (rather than relying solely on the seller's representative) is essential.

This is exactly the problem Compass Abroad was built to solve. Finding a trustworthy local agent as a Canadian — one who has experience with the specific legal, tax, and financing nuances that Canadians face — is difficult from 3,000 km away. Compass Abroad maintains a network of vetted destination agents who have a demonstrated track record with Canadian buyers. When you complete our qualification form, we match you based on your destination, budget, purpose, and timeline — not just geography. Our vetting process includes reviewing transaction history, checking professional licensing (all agents must be legally licensed in their jurisdiction), and personal interviews with a focus on Canadian buyer experience. We make introductions only when we believe the agent is genuinely well-suited to your specific situation.

Yes. Foreign properties are fully sellable assets. Typical marketing time for resale properties in major Canadian buyer markets (Puerto Vallarta, Playa del Carmen, Punta Cana, Guanacaste, etc.) is 3–6 months, though this varies significantly by market conditions and pricing. On the tax side, when you sell a foreign property, any capital gain is taxable in Canada. Your gain is calculated in Canadian dollars: proceeds minus ACB (your original purchase price plus capital costs, both converted to CAD at the applicable exchange rates). Currency gains or losses between the purchase and sale date are included in your capital gain calculation — a significant consideration in a volatile exchange rate environment. Mexico may also withhold a percentage of the gross sale price as a seller tax — the exact amount depends on the structure of the sale and any available exemptions. Plan ahead and consult a cross-border tax accountant before listing your property.

Yes — your bank is almost certainly not the best option for international wire transfers. Big Five Canadian banks typically charge 2.5–3.5% in hidden exchange rate markup (the spread between the rate they receive and the rate they give you) plus flat wire fees of $15–35 CAD. On a $300,000 USD purchase, that's $7,500–10,500 CAD in unnecessary costs. Dedicated foreign exchange services like Wise (formerly TransferWise), OFX, or Moneycorp typically charge 0.3–1% in spread with lower or no wire fees — saving you thousands. For larger transfers (over $100,000 CAD equivalent), a dedicated FX broker will often provide a locked-in forward rate, protecting you from exchange rate movements between signing and closing. FINTRAC reporting requirements apply to large international transfers; your FX service will guide you through the process. We recommend initiating currency transfers at least 2 weeks before your closing date.

The most important difference is the ownership structure. In Mexico, foreign buyers in restricted zones must use a fideicomiso bank trust — you cannot hold direct title to coastal property. This adds annual trust fees (~$500–700 USD/year) and setup costs (~$1,500 USD) but provides secure, legally recognized ownership equivalent to direct title. In the Dominican Republic, foreign buyers can hold full freehold title directly in their own name — no trust structure is required. This is administratively simpler and eliminates ongoing trust fees. The DR uses a Torrens title system (similar to Australian land registry) that provides clear, registered title certificates. The DR also has no restrictions on the percentage of property that can be owned by foreigners. Other key differences: Mexico's closing costs are higher (6–9% vs. 3–4% in the DR), but Mexico's rental market is more mature in many areas. Mexico has a longer track record with Canadian buyers and more established legal protections; the DR has been catching up rapidly, particularly with the 2021 condo law reforms.

The timing is genuinely exceptional. A 2025 survey found that 54% of US snowbirds are actively considering selling their US Sunbelt properties in favour of international alternatives — a reaction to both US political uncertainty and the exchange rate dynamics that make US real estate expensive for CAD-denominated buyers. At the same time, Canadian interest in Mexico, the Dominican Republic, and Costa Rica has surged. This creates a window: pre-construction pricing in many markets is still available at below-market rates, the CAD-USD exchange rate has been challenging for US property purchases, and destination markets are actively courting Canadian buyers with developer incentives and streamlined processes. However, the window for pre-construction pricing in the most popular markets (Puerto Vallarta, Punta Cana, Tamarindo) may close as inventory tightens. Buyers who are within 6–18 months of a potential purchase are well-served by starting the research and matching process now — even if they don't close for several months.