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Owning Real Estate in Mexico

Real Estate

Owning Real Estate in Mexico

Owning property in Mexico is easier and safer than ever, because now there are established and well defined rules regarding non-Mexicans owning land in Mexico. These rules are in place to protect your ownership rights and to promote the sale of real estate to foreign investors.

The key is a safe, established and perpetually renewable Mexican Property Trust called a "Fideicomiso".

What is a "Fideicomiso" or Mexican Property Trust?

With the advent of North American Treaty Agreement, the Mexican Government recognized that it was critical to make foreign investment in Mexico safer and easier than ever. Because the Mexican Constitution prohibits foreigners from purchasing or owning real estate within 60 miles of an international border or within 30 miles of the Mexican Coast, a new, safe method of holding title was created.

This new instrument, modeled after the one in Monaco, allows ownership through a Mexican Property Trust, called a "Fideicomiso". This is a trust agreement, much like an estate trust, giving you all the rights of ownership.

The Department of Foreign Affairs in Mexico City issues a permit to a Mexican Bank of your choice, allowing the bank to act as purchaser for the property. The bank acts as the "Trustee" for the Trust and you are the "Beneficiary" of the Trust. This is not an asset of the bank; they simply act as the Trustee to hold the Trust.

Much like Living Wills or Estate Trusts in the U.S., the Mexican Bank, or Trustee, takes instructions only from the Beneficiary of the Trust (You). The Beneficiary has the right to use, occupy and possess the property, including the right to build on it or otherwise improve it.

The Beneficiary may also sell the property by instructing the Trustee to transfer the rights to another qualified owner, or bequeath the property to an inheritor. The initial term of the trust is 50 years, and it can be renewed for an additional periods of 50 years indefinitely, providing for long-term control of the asset.

You have all the rights of a property owner in the U.S. or Canada, including the right to enjoy the property, sell the property, rent the property, improve the property, etc. This is not to be confused with a "land lease."

The property you buy is placed in a trust with you named as the Beneficiary of the trust - you are not a lessee. If the property you purchase is already held in a Trust, you have the option of assuming that Trust, or having the property vested in a new Trust.

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