How to Buy Property in Mexico?

How to Buy Property in Mexico?

Some of you have been asking about the process of buying property in Mexico as a Canadian, American or European (as a foreigner) Yes you can safely & legally own ocean front property in Mexico with full title in your name. The information below explains the process of purchasing real estate within the restricted zone in Mexico. The restricted zone is defined as all land located within 100 kilometres of any national border and within 50 kilometres of any ocean. The most important thing that you should know is that buying property in the restricted zone in Mexico is completely legal and 100% secure. Thousands of foreigners do every year and enjoy the many benefits.

Mexico’s Foreign Investment Law allows foreigners to acquire title to land in the restricted zone by one of two methods; through a Mexican corporation or through a bank trust (fideicomiso). This has made investing in property a lot easier, a lot less complicated and a lot more attractive to foreign investors.

We work with the top notaries in Merida to ensure a smooth & hassle free transaction. It is our goal to make you feel as comfortable as possible throughout the entire experience.

If you have any questions at all please contact Parrish anytime. We are your trusted Canadian Developer with over 9 years of experience in Mexico.

+1.306.361.1800
parrish@cabancondosmexico.com

The most important thing that you should know is that buying property in the restricted zone in Mexico is completely legal and 100% secure.

1. The creation of the restricted zone in Mexico was part of the recent changes in laws and regulations in relation to buying property in Mexico. These changes have made investing in property a lot easier, a lot less complicated and a lot more attractive to foreign investors.

In the Mexican constitution the restricted zone is defined as all land located within 100 kilometres of any national border and within 50 kilometres of any ocean.

Mexico’s Foreign Investment Law allows foreigners to acquire indirect title to land in the restricted zone by one of two methods; through a Mexican corporation or through a bank trust (fideicomiso).

 

2. The Fideicomiso (bank trust)

In regards to buying property here, an important word that you will need to know is Fideicomiso. Pronounced “Fee-day-coh-MEE-soh”. Mexico created the Fideicomiso to encourage foreign investment in the highly desirable areas, particularly along the coastline.

Buying property through the Fideicomiso can cost approximately $1,500 USD set up fee, $500 registration fee and a $300 annual fee there after.

Here´s a simple breakdown of what you need to know:

• A Fideicomiso is a real estate trust that is held at a Mexican bank of your choice, for example HSBC or Santander.
• The Fideicomiso was set up to allow foreigners to buy prime Mexican real estate in the restricted zone in Mexico.
• The bank acts as a Trustee.
• You maintain complete control over the trust (operates like a Living Trust in the United States).
• A Fideicomiso gives you complete control over the property which allows you to lease, rent, mortgage, sell, improve and will your property.
• The Fideicomiso only acts as stewards of the trust. The trust is the beneficiary’s property and cannot be used by the bank in any way.
• The trust is for 50 years and can be renewed for additional 50 year increments at any time. The cost is approximately $500 USD.
• Each trust is guaranteed indirectly by the government.

3. Setting up a Mexican Corporation

Most investors buy property in Mexico using the Fideicomiso but you can also set up a corporation if that is better suited to your needs. It is common to buy property through a corporation when your intention is to use the property for commercial reasons. You might plan to use the property in summer but rent or lease the property for the rest of the year. Also, buyers interested in multiple properties often choose this option.

Here´s some introductory information about setting up a corporation in Mexico.

• There are 2 main types of corporations in Mexico.
• The LLC is a limited Liability Corporation and the LLP which is a limited Liability Partnership
• Foreigners can own, operate and manage Mexican corporations but none of the corporations investors can be Mexican.
• A corporation in Mexico it has the legal capacity to buy property anywhere in Mexico, including the restricted zone.
• There are no restrictions on foreign owned Mexican corporations who are dealing and developing in property so the advantages there are huge.
• The attorney’s fee is $1,500 USD to set up a corporation and there is an accounting fee of $100 per month thereafter.

Approximate costs when buying property through a corporation are a $1,500 set up fee and a $100 a month accounting fee.