Owning Real Estate in Mexico – Fideicomiso
By Marilyn Newman, Realtor Vallarta
How many times have you heard you can’t own real estate in Mexico? You’ve probably heard something about a 99-year lease, but just didn’t quite understand what they were talking about. Well, I’m here to give you the straight skinny on owning in Mexico. When you have finished hearing what I’m about to tell you, you will be an expert on Mexico real estate ownership.
Let’s start at the beginning… In the Mexican constitution it states that no foreigners, no just Americans and Canadians, but all foreigners, cannot own property outright in the “Restricted Zone”. What is the “Restricted Zone”, you might ask: It is the area 100 km along a border with another country, and 50 km along the coast line.
So, what does that mean? It means, if you are considering a property that is within that 100 km along the Mexico border with America, Guatemala or Belize, or 50 km inland from the thousands of miles of coast line on both sides of Mexico, you can only own the property in a “Fideicomiso”, loosely translated as a bank “Trust”.
The “Trust” works much the way a Trust works in the U.S.A. or Canada. The object or asset is held in-trust for a specific person or entity. In other words, the title to the property is held in the “Trust” and you own the “Trust”.
The “Trust” is established in a Mexican bank for a set period of time. Currently it is established for 50 years and at the end of 50 years, it is renewed for another 50 years, or however long the trusts are established at the time of renewal. It is in perpetuity and transfers to your beneficiaries as you named them when you established the “Trust”.
Of course, there is a process to purchasing the property and establishing the trust, which can all be handled through your experienced real estate professional.
You are reading one of the articles in a series of articles regarding Owning Real Estate in Mexico.