Owning Real Estate in Mexico as a Foreigner
Welcome to Fresh off the Blog #freshofftheblog and thank you for joining me today, as I, Horacio Ochoa of eXp Realty ask Daniel Marin of Anchor Attorneys some of the most common questions clients start off with when deciding to buy real estate in Mexico.
Daniel Marin is a real estate attorney in the state of Quintana Roo, in the Riviera Maya.
Join me as I ask him the following questions and more.
Can foreigners buy property in Mexico?
Simply put, foreigners can buy both land and property in Mexico without any restrictions.
Can foreigners buy beachfront property in Mexico?
Originally the Foreign Investment Law would stop ex-pats from buying properties that were within 64 miles of an international border or 32 miles from the shore. However, this was amended in 1993 — meaning that the idea that foreigners have restrictions when buying property in Mexico is nothing but a myth.
That said, in order for Americans — or any other international buyers — to purchase land in these prime areas a fideicomiso is needed².
The good news is that foreigners can own property in Mexico without any legal restrictions.
In Mexico, all residential property purchased by foreigners within 62 miles from any international border or 31 miles from any coastline, will need to be acquired through either a Mexican corporation or a fideicomiso (also known as a Real Estate Bank Trust). The fideicomiso creates a trust agreement for the benefit of the foreign buyer, and the bank takes on a fiduciary obligation to the owner. The owner retains all the benefits of ownership and has the legal right to lease the property, sell the property, and will the property to their heirs.
The government of Mexico may not seize legally purchased property according to the NAFTA North American Free Trade Agreement.
What is a Fideicomiso
A fideicomiso is a banking trust that allows foreigners to legally purchase land near beaches or across state borders.
Since the relaxation of foreign ownership of prime locations in 1993, foreigners can establish a fideicomiso to own restricted land through a trustee indirectly. While the trustee is the legal owner of the property, the beneficiaries of the trust retain all rights to sell, lease or transfer the property.
This has some advantages as ex-pats who own land in Mexico through fideicomiso can pass their property to heirs without the need for a formal Mexican will. However, the system is entirely reliant on the credibility of Mexican institutions, putting off some foreign buyers who are reluctant to venture abroad.
Interested in learning more?