Purchasing in Mexico
Why purchase real estate in Mexico?
Buying property in Mexico can offer good value for money in comparison to prices in the US and Europe. Mexico's land costs can be lower, building and maintenance more economical and cost of ownership (taxes, utilities) unprecedented. This unique combination of value and tropical climate make Mexico an appealing consideration for the homeowner or real estate speculator.
Can foreigners own property in Mexico?
Mexican law provides for private ownership of land by foreigners, and is very specific about the way land rights transfer from seller to buyer. Inside of the restricted border and coastal zones, foreign nationals may own land through a trust ('fideicomiso' in Spanish), set up through a bank to provide for ownership of the land and property in all but name.
Purchases can be made in one of two ways. The first way is through a Mexican trust. The second is through a registered Mexican company owned by a foreigner.
What is this trust, and how does it work?
The mechanism is similar to a Trust in the United States; the bank holds legal title to the property, with all rights and privileges of ownership, including exclusive use and enjoyment, held by the Trust beneficiary(the foreigner). The foreign beneficiary enjoys the right to occupy or rent the property, and may cause the transfer of title or beneficiary transfer to the property to any legally qualified person he may designate. Beneficiaries are also allowed to modify their property in accordance with local zoning regulations. These Trusts have an initial term of 50 years, and are renewable in 50-year terms for a relatively small fee (less than $1,000 US). The property may also be sold to a person legally authorized to own land, or to another foreigner via a Trust.
How are these trusts created?
To establish a real estate trust ('fideicomiso' in Spanish), banks will charge a predetermined fee, plus a percentage of the property's value, to cover costs for preliminary studies and the drafting of a trust agreement. The bank also charges an annual fee for maintaining the Trust (roughly $500 per year) providing there is no financing involved.
Do I have to establish residency in Mexico to own land or establish a trust?
You do not have to be a resident of Mexico to own land within its borders.
May I bring cash to Mexico to pay?
Cash or monetary instruments (of any kind) with a value of or exceeding USD $10,000 must be declared when you enter Mexico. There are no limits on how much you can transfer in or out of the country. |
