Owning property in Mexico it could be a lifetime dream for many.  Non-Mexican citizens can buy property in Mexico and it can be a safe and an easy process when using a reliable real estate agent (like one from United Country Mexico Advisors, of course). All foreigners have the full protection of the law with regards to real estate transactions and there is no need to be resident of Mexico to own a piece of property here, not even to immigrate or qualify for a resident status in order to be an owner. You will need to check with your trusted agent to see how you will hold property title prior to purchasing.

The Mexican Constitution had previously banned foreign nationals from owning property within the restricted border zones within 100km (64 miles) from an international border and 50km (32 miles) from the coastline at high tide. All this was intended to protect Mexican soil from foreign invasion.

The Foreign Investment Law of 1973 was a constitutional amendment which changed this allowing foreigners to now purchase real estate free outright except inside the “restricted zone, but in 1993, Mexico amended the constitution to allow foreigners to purchase real estate within the restricted zone by means of a fideicomis which is authorized by the Mexican Government under the Ministry of Foreign Affairs.

The fideicomiso (very similar to a Living Trust) is a bank trust wherein the bank (trustee) holds the trust deed for the purchaser (beneficiary). While the trustee is the legal owner of the real estate, the beneficiary retains all ownership rights and responsibilities of the property and may sell, lease, mortgage or pass the property on to heirs at any time.

The fideicomiso offers the buyer added securities since the bank is required to verify the property’s ownership and be sure that it is free of any liens. The trust is established for a 50-year period which is renewable for another 50-year period after that. If the 50-year period expires without renewal, the owner may have another 10 year period in order to submit an application for renewal.

When a home or land is purchased with an existing fideicomiso, most of the times the remainder of that trust is merely transferred by a cession of rights to the new owner or it can be renewed at that time. The bank charges an annual fee for holding the property which is based upon its value.

Mexican corporations may be 100% foreign-owned and hold title to property within the restricted zone (without a fideicomiso). These corporations were once a popular option for foreign investors looking to buy within the zone. They now have more restrictions and also have further reporting and accounting requirements than the fideicomiso; making their use in purchasing property not as advantageous as in the past years.

Services of a Notario Publico (Notary Public) are required in any real estate transaction here. The Notary, needs to be a well practitioner Attorney, 35yr or older, pass the Notary exam and be appointed by the Governor and they are in charge of the documents drawing and ensures that everything is in order and that all proper legal procedures have been followed.

Keep in mind that they are other additional fees that the buyer should expect to pay at closing. The buyer generally pays the transfer tax and other closing costs as well. The transfer tax here is 2% it self of the sales price. The buyer should expect to pay between 5% to 7% of the stated value for total on closing cost including the Bank Trust and Transfer tax.

Remember, buying a property in Mexico can be an exciting and stress-free experience; as long as you have knowledgeable and trustworthy people working on your side, in United Country Mexico Advisors we strive to bring the best values to make your transaction the best experience ever.

Contact us.

General Questions

Are the Ownership papers availble for the owner?

Is the property in the Restricted Zone? What does that mean?

Is the property part of Ejido Land? What are the special risks?

When I get a Fideicomiso (Bank Trust), do I own the property?

Is the contract written to protect me? Can I influence it?

Can I get a Deed or Title on the property?


Real Estate Resale Questions

How is the property owned? Deed, Title, Bank Trust, Private Contract, LLC, Mexican Corporation.

Does the property have clear title?

Does the property have liens or lawsuits preventing title?

Is the property held free and clear of debt?

Are there city or state bylaws that limit ownership or usage?

Is there a condo regime? What are the restrictions?

Are there HOA (Home Owners Association) rules? How do they impact your usage?


New Development Questions

Who are the developers? Where are they from? What experience do they have?

Is the project an idea on a brochure?

Is the project registered with PROFECO (the Mexican equivalent of the Better Business Bureau)?

Are building and sales permits in place?

What stage of development is the project in?

Does the project clearly describe what you are getting?

Is your deposit protected in an escrow account? Is the letter of instruction favorable to you?

Is the purchase reservation, offer to purchase, promise of trust agreement, etc. written to protect you?

Are there warranties and consequences if the performance expectations are not met?

How is the project financed? What percentage of the financing comes from the developer, investors, financial institutions or buyers?

Will the developer provide proof of the answers to the questions, including compliance with legal and regulatory requirements?

If your fund are used for promotion or construction, are they protected if commitments are not met?

If the project fails to be adequately funded, are the investors left with anything real?

Does the developer hold performance bonds that are valid and payable to the investor/buyer against contract warranties?

Do the developers have construction insurance? If so, for how much?

How are inspections carried out to ensure construction standards are complied with?

Does the developer have a good history of bulding similar projects?

What does the developer have to lose if the project fails?