Owning Property in Mexico

Owning real estate in Baja and Mexico is a reality. Over a million Americans and Canadians enjoy their properties already. To be one of the fortunate owners of this beautiful land, there are important statutes in place foreign citizens must be aware of before investing.

Foreign citizens cannot technically "own" land within 60 miles from any Mexican border or within 30 miles of any Mexican coastline. However, there are procedures in place that allow citizens from all over the world to essentially own real estate in Mexico.

Having the experience of selling and closing over 100 properties to foreigners in Mexico, Baja Smart Real Estate is highly qualified to help you find your dream property in Baja. We can help you become another happy owner, below there is an explanation on how to own property in Mexico trough a Mexican Property Trust (Fideicomiso)

Mexican Property Trusts (Fideicomiso)
Foreign citizens who wish to buy property within designated regions of Mexico are required to obtain a "Fideicomiso," which functions as a Mexican Property Trust.

In 1994, when the USA, Canada and Mexico signed the NAFTA agreement (North American Free Trade Agreement) there was an amendments to the Constitution permitting foreigners to purchase and own real estate in Mexico located within the "restricted zone" which is all land within 60 miles of a national border and within 30 miles of the Mexican Coast. This Law permitted ownership through a land trust or "Fideicomiso", and allowed for foreign investment needed in the region.

A "Fideicomiso" is a Mexican Trust. The way it works is the Mexican Government issues a permit to an international Financial Institution of your choice, allowing the institution to act as purchaser for the property. The institution or bank acts as the "Trustee" for the Trust and you are the "Beneficiary" of the Trust. The "Beneficiary" rights are very similar to Living Wills or Estate Trusts in the U.S.

The law authorizes Mexican banking institutions to act as trustees. A trustee takes instructions only from the beneficiary of the trust (the foreign purchaser). The beneficiary has the right to use, occupy and possess the property, including the right to improve it. The beneficiary may also sell the rights and instruct the trustee to transfer title to a qualified owner.

Before 1994 foreigners were doing lease agreements to enjoy the land. There are people that still think this is the way to have your dream home close to Mexico’s warm beaches... this has changed. The property that you buy will be put into a trust with you named as the beneficiary of the trust giving you the rights that an owner of property in the U.S. or Canada has, including the right to own the property, sell the property, rent the property, improve the property, and more.

The initial term of the trust is 50 years and it can be renewed for an additional period of 50 years within the last year of each 50-year period. This process can be continued indefinitely, providing for long term control of the asset.