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Can Foreigners Own Real Estate in Mexico?
By David W. Serber
Can foreigners own real estate in Mexico? This is a big question many foreigners ask.
A common myth is that foreigners cannot directly own real estate in Mexico. This is untrue. However, in certain areas there are restrictions placed on ownership.
According to the Mexican constitution, any foreigner may acquire real estate and be a direct owner in any area that is outside the zone of 100 kilometers from the border and 50 kilometers from the coasts. These are known as the "Restricted or Prohibited Zones."
Nevertheless, thanks to a law called the "Mexican Foreign Investment Law," enacted December 28 of 1993, foreigners may buy real estate within the Restricted Zones through a bank trust called a Fideicomiso.
A fideicomiso must be established through a Mexican bank. The bank acts as the trustee, becoming the legal owner of the property, but giving you the exclusive use of the property.
The buyer of the real estate property gets all the benefits of direct ownership such as the right to transfer title, lease, or transferring their rights to the property to a third party.
Fideicomisos can be established for a maximum term of 50 years and can be renewed for another 50-year term. The bank does not hold the property as an asset.
Even if you are looking at buying property outside of the Restricted Zones, you might want to consider using a fideicomiso to purchase it.
The advantage is that since the bank is the legal owner, they will be responsible for making sure the property complies with all government regulations for keeping the property in good standing.
In addition, they are responsible to the buyer/beneficiary (you or your appointed beneficiary) to protect your interest in the property. If you are unfamiliar with the legalities of Mexican trust fulfillment, than a fideicomiso might be the way to go to avoid any mistakes on your part.
About the Author
David W. Serber has lived in Mexico for over 2 years and writes about numerous topics such as real estate, safe driving practices and general living strategies. He is president of the company Open Door Mexico that helps foreigners experience the joys of living in Mexico. Click here to see an online directory of real estate companies in Mexico: http://www.lake-chapala-real-estate-directory.com
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