Can Foreigners Own Property In Mexico?

Perhaps you've heard the term "fideocomiso"when discussing Mexican real estate. Let me explain what this is...

A Fideicomiso is simply a bank trust that is required for non-Mexican buyer who purchase property in what are referred to as "restricted zones". These include all land within 100 km of a border and 50 km from the coast. The 20 second history behind it is related to American colonization before the Mexican revolution. The Mexican government wanted to prevent any further issues so they made certain parts of the country off-limits to foreign buyers. In the 70's they realized that foreign investment is positive for economic growth and looked for a creative way to work around the existing constitution. The fideicomiso was created as a loophole. It was later amended in 1993 to allow a 50 year trust with the option to renew it indefinitely.

A Mexican bank holds the property title in trust for the foreign buyer. However, the buyer has full control and can sell, rent, renovate, or pass it to heirs just like an owner. The bank only holds the title to meet legal rules—it does not own the property. A fideicomiso is not to be confused with a lease. It's more similar to buying through a corporation only without the high costs, extra taxes, and ongoing paperwork that come with a business.

Benefits:

1. It allows foreigners to legally own property in restricted zones.

2. If something happens to the owner, the property transfers directly to their beneficiary without needing to go through Mexican probate.

3. Foreign trust holders have the same rights and responsibilities as direct owners.

4. The trust lasts 50 years and can be renewed indefinitely.

5. It is a more cost effective option than setting up a corporation since there are no business taxes, complicated accounting, or high setup costs.

6. A trust keeps ownership private and protected, adding an extra layer of security.

7. Since a Mexican bank manages the trust, it ensures compliance and legal protection.

The Fideicomiso is the easiest and safest way for foreigners to own property in Mexico’s restricted zones. It offers legal security, inheritance benefits, privacy, and protection without the costs and complications of setting up a corporation.The cost can range somewhat so it's good to shop around but typically you can expect to pay approx $2,000 - $3,000 USD to have it set up and $500/year for administrative fees.

Mandy is a fully licensed and certified real estate agent in the state of Quintana Roo. If you have specific questions not covered here please reach out from the contact link below.