Buy in Mexico
Buy in Mexico. Buying Real Estate in Mexico Through a Bank Trust (Fideicomiso)
Article 27 of the Mexican Constitution, establishes an outright prohibition against foreigners acquiring direct ownership of real estate within 100 kilometers of the national borders and 50 kilometers of the coastline (Los Cabos zone is now known as the "Restricted Zone").
In 1993, Mexico enacted the Foreign Investment Law liberalizing land ownership for foreigners in Mexico. For real estate within the Restricted Zone for residential purposes, foreigners may only acquire the rights to use and enjoy the land through a Mexican bank trust known as a “Fideicomiso”. A Fideicomiso is formed by contract between the purchaser (Beneficiary) and bank (Trustee) to provide the Beneficiary with use and enjoyment of the real estate purchased for a term of 50 years. The trust may have multiple beneficiaries and can be renewed for additional 50-year terms. The Beneficiary may lease, sell or transfer the real estate at any time.
The bank “Trustee” holds title to the real estate on behalf of the “Beneficiary” and obtains the required permits from the Mexican Government. The Trustee administers the Fideicomiso and is responsible for carrying out the terms of the agreement. In Mexico, only authorized Mexican financial institutions can act as Trustees. The Trustee cannot encumber or transfer the real estate without the instruction and approval of the Beneficiary. For foreigners accustomed to having direct title to real estate this arrangement may seem complicated, but Fideicomisos are common, relatively easy to use and the only legal process available for foragers to own residential property in Mexico.
In Mexico, notary publics are attorneys who have special commissions from the government to authenticate and register public deeds and other important documents. Notaries are the only Mexican entities authorized to process your right to purchase.
Experienced legal counsel can help minimize some of the difficulties with purchasing real estate in Mexico.
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