Buying Real Estate in Mexico

When buying real estate in Mexico you want to have an active AMPI member and a certified agent working on your behalf. Make sure your agent is an AMPI member and is active in the real estate community.

If you are looking to buy property in Mexico, you must rely on expert advice and guidance throughout the whole process. Please contact a real estate professional affiliated to AMPI (Mexican Association of Real Estate Professionals). Owning real estate in Mexico is an incredible opportunity.

However, there are some important statutes in place that foreign citizens must be aware of before they can own their home here.

Today, foreign citizens “acquire” property in Mexico’s restricted regions through a trust which functions much like trusts in other countries. These regions are for any property within 62 miles (100 kilometers) of the border and within 31 miles (50 kilometers) of its coastline.

Originally the “restricted zone” was created by the government to protect the country from foreign invasion. The main idea and purpose was to keep any foreigners from owning property that could later be used to bring in troops and launch an attack on Mexico. This article was written into the Mexican Constitution in 1917 (article 27) and later amended in 1994, allowing foreigners to own property in the restricted zone through a legal structure called the “Bank Trust” or Fideicomiso. The Fideicomiso lasts for 50 years. While the property is in the trust it can be sold, inherited, etc. In the last year of the trust, it can be renewed.

Back in the early seventies Foreign Investments Law in order to avoid simulations and frauds allowed Mexican corporations even with foreign capital to own direct title to property for commercial purposes but still restricted direct title ownership for residential purposes. From those days up to the present the Mexican bank trust system was designed and encoded into law to permit foreigners (physical persons) to acquire and enjoy legal and safe possession of land within “restricted zone” for residential purpose in a manner consistent with constitutional provisions.

There are restrictions on foreign ownership of land within 50 kilometers, or 31 miles, of the coast and 100 kilometers of all borders, including all of Baja California. In most cases, any residential buyer who is not a Mexican citizen must place the property in a Mexican bank trust, or fideicomiso, which is controlled by the buyer and easily renewed after 50 years.

Usage of a Mexican bank trust, a Fideicomiso, allows non-Mexican nationals to acquire property in the “restricted zone” by placing the real estate property into a bank trust recorded in a Mexican trustee’s name. The Mexican trustee is a Mexican bank trust department. The Mexican bank’s trust department is designated as the owner of record so that there is harmony with the constitutional provisions prohibiting ownership by foreigners. The trust agreement that governs the manner in which your property is managed stipulates that while the owner of record of the property is the Mexican trust, the ownership rights of the property belong to the trust’s beneficiary. The beneficiary of the trust is the purchaser of the property -you are the beneficiary.

Trustees are paid an initial fee for recording the property in their name and are subsequently paid an annual trust maintenance fee. The trustee is prohibited by the trust agreement and by Mexican law from transferring the property or the property or the beneficiary rights to the property without the written permission of the beneficiary.