Buying a home in San Miguel de Allende: the SRE permit, the notario and the escritura

Good news first: in San Miguel an American can hold title to a house directly, in their own name, with no bank trust, but only after signing a short agreement with Mexico's foreign ministry and closing in front of a notario.

The short version

• San Miguel is outside Mexico's restricted zone, the strip of 100 km (62 miles) along the borders and 50 km (31 miles) along the coasts where foreigners hold homes through a bank trust (or a Mexican company) instead [1]. So you own directly; no fideicomiso.
• You still need the SRE convenio. Under Article 27 of the Constitution and Article 10-A of the Foreign Investment Law, a foreign buyer files a written agreement with the Secretaría de Relaciones Exteriores (SRE) to be treated as Mexican for that property and not to invoke US government protection over it [2][3].
• The notario runs the closing. In Mexico a notario público is a senior lawyer appointed by the state, not a notary stamp at the UPS Store. They check title, calculate taxes and register the deed (escritura).
• Budget for closing costs on top of the price: the state's acquisition tax, notario fees, registration and appraisal. Ask your notario for a written estimate up front.
• The US side doesn't disappear. A Mexican house owned directly isn't reported on Form 8938 [4], but rent and a later sale have US tax consequences.

Restricted zone, fideicomiso and why you don't need one

Article 27 of the Mexican Constitution bars foreigners from directly owning land in a band of 100 km (62 miles) along the borders and 50 km (31 miles) along the beaches. Inside that zone, Americans buy through a fideicomiso, a bank trust that needs an SRE permit and runs for up to 50 years at a time [1]. That's the setup you've heard about in Cancún, Puerto Vallarta or Baja.

San Miguel de Allende is in Guanajuato, in the middle of the country, far from both. So you skip the bank trust, the setup fee and the annual trustee fee. Your name goes straight on the deed, just as it would back home.

The SRE convenio (the Calvo clause agreement)

What you do need is the convenio de renuncia, Mexico's version of what lawyers call the Calvo clause. By signing it, you agree to treat the property as a Mexican national would and to waive asking the US government to step in over it. Article 27 itself spells out the penalty for breaking that promise: the property can be forfeited to the nation.

Here's how the SRE describes the process [2]:

Article 10-A adds a timing detail. For a property in a municipality entirely outside the restricted zone, like San Miguel, the permit is treated as granted if the SRE doesn't publish a refusal within five business days of filing [3]. Nationals of countries with diplomatic relations with Mexico, which includes the US, only need to file the written agreement [2].

In practice, your notario prepares the convenio, files it and ties the SRE's reply into the deed. Your job is to provide a valid passport and an immigration document the SRE accepts, and to sign.

How a purchase works, step by step

1. Line up money and paperwork. Most San Miguel purchases are cash. Mexican mortgages for foreigners exist but are limited, and US lenders rarely lend against Mexican property.
2. Choose your notario early. The buyer usually picks the notario. Get a written estimate of all closing costs before you sign anything.
3. Make an offer and sign a promise to buy (contrato de promesa). It sets the price, the deposit, the closing date and what happens if either side backs out. Have it reviewed in Spanish by your own lawyer.
4. Put the deposit somewhere safe. Use escrow or the notario's account rather than the seller's personal account.
5. Title checks. The notario requests a certificate of no liens (certificado de libertad de gravámenes) from the public property registry, checks the chain of title, and confirms property tax (predial) and water bills are paid up.
6. Appraisal (avalúo). An official appraisal is used to calculate taxes.
7. SRE convenio. Filed and approved as above.
8. Sign the escritura. You, the seller and the notario sign the deed. The notario collects taxes and fees from you at closing and withholds the seller's Mexican capital gains tax where it applies.
9. Registration. The notario registers the deed at the public property registry. The registered escritura can take weeks to months to arrive; get a copy of the signed deed and a letter confirming it's in process.
10. Afterward. Put utilities and predial in your name, and sign a Mexican will. Our guide to a Mexican will for Americans in San Miguel explains why that matters.

Closing costs and title checks

The biggest closing cost is the property acquisition tax (impuesto sobre adquisición de bienes inmuebles, often called ISAI), set by the state and municipality and charged on the higher of the price or the appraised value. We couldn't verify San Miguel's 2026 rate on an official page, so ask your notario to confirm the current rate in writing. On top of that:

• notario fees, which vary by price and complexity
• public registry fees
• the official appraisal
• the SRE fee for the convenio
• certificates (no liens, no debts for predial and water)
• your own lawyer, if you hire one separately

Ask for a line-by-line estimate. Ballpark ranges from agents are a start, not a quote.

Title traps to watch for

• Ejido land. Communal farmland outside town can't be sold like ordinary private property unless it's been formally converted. Be wary of cheap land in the countryside around San Miguel.
• Undeclared construction. Additions that were never registered can show up in the appraisal and the deed. Make sure what you're buying matches what's on paper.
• Unpaid bills. Debts can follow the property; the notario's certificates should catch them.
• Under-declared prices. Sellers sometimes ask to put a lower price on the deed to cut their tax. Don't. It raises your capital gains when you sell later, in both countries.
• The historic center. Parts of San Miguel are a protected historic zone, so renovations face extra rules. Ask before you plan to add a roof terrace.

The US tax side

• Form 8938. Foreign real estate held directly isn't a specified foreign financial asset, so you don't report the house itself [4]. A Mexican bank account you use for the purchase does count toward the FBAR and possibly Form 8938.
• Rent. Rental income from the house goes on your US return, along with Mexican tax obligations.
• Selling. A sale is a US capital gains event, figured in dollars. The home-sale exclusion can apply if it's your main home and you meet the ownership and use tests. Currency swings can also create gains you didn't expect.
• Moving money. Large wires trigger compliance questions on both sides; keep a paper trail for the source of funds.

A US expat tax preparer (or lawyer) can check your situation before you close. If you want to compare notes with other buyers, our community group for Americans in Mexico has plenty of people who've been through a San Miguel closing.

Sources

1. SRE: Permit for a trust over property in the restricted zone (fideicomiso)
2. SRE: Convenio de renuncia for acquiring property outside the restricted zone
3. Foreign Investment Law (Ley de Inversión Extranjera), Article 10-A
4. IRS: Basic questions and answers on Form 8938

Keep reading

• A Mexican will for Americans in San Miguel de Allende
• Renting in San Miguel de Allende
• Buying property in San Miguel de Allende vs back in the US
• FBAR: reporting your foreign bank accounts