Do you own the Real Estate you buy in Mexico?

This article aims to answer a couple really common questions we get about purchasing property in Mexico as a forgeign national. Our goal is to help you see that purchasing your dream property in Mexico isn't nearly as complicated as some might have you believe and that the systems and processes in place to protect your investment are sound and easy to navigate with the right partners in place.


June 15, 2022

So, if I buy a property in Mexico, do I own it?

In short you will either own the property or the rights to the property as the beneficiary of a trust held by the Mexican government. Let's dig into each of the two main scenarios below.

Scenario 1: Purchasing property in the restricted zone

If you are purchasing real estate within 100 kms of an internation border OR within 50 kms of the ocean coast line this is designated as the "restricted zone" and thus you must use what is known as a fideicomiso. The use of a  fideicomiso was proposed by the Mexican government in 1971 as part of a new foreign investment policy that became law in 1973 and is a long term bank trust that is irrevocable. Fidelcomiso are issued by Mexican fiduciary banks that then hold the title to the property and give the rights to own, occupy, renovate, sell, gift or leave to your beneficiaries as part of your legal will. Now it's important to note that the fideicomiso is not a lease, but rather a renewable trust that is held in 50 year increments by the Mexican government. In order to navigate this process, it’s best to use a well established and experienced legal office in Mexico that is able to provide documentation in both Spanish and English to avoid any confusion.

Scenario 2: Purchasing property outside of the restricted zone

If you are purchasing property that is not in the restricted zone, you can own the deed/title of the property directly. You still need to work with a Mexican notary and legal representative to work through the purchase process however much the same as in many other countries.

What does a fideicomiso cost on average?

There are two basic fees you need to pay when establishing a fideicomiso. 

First there is an initial trust setup fee that is a one time cost of around $1500 USD depending on the bank used. This covers the initial setup of the trust, and legal documents required as part of that process and other administrative items.

Second there is a recurring annual fee of around $500 USD payable to the bank to renew the trust each subsequent year. This occurs in perpetuity for as long as you hold the trust.

What are some additional benefits to the real estate buyer when holding a property in a fideicomiso?

  • You can hold more than one property in the bank trust.
  • You can transfer your rights in the bank trust to another foreign buyer.
  • Your hiers can inherit the rights to the bank trust effectively by-passing probate should you depart without a proper will.
  • There are tax advantages pertaining to capital gains taxes when you sell.
  • The bank trust is easy to maintain by paying a small annual fee to the bank.

The importance of working with a trusted partner 

At Tulum Homes, we have helped countless foreign buyers purchase their dream vacation homes and investment properties in Mexico by focusing on top notch customer service and support. We are here to help and have long standing legal partnerships with independent notable offices across Mexico that will ensure a smooth purchase process from start to finish. Contact us today!

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