Mexico’s stunning coastline and vibrant culture attract many foreign investors looking to buy property. However, purchasing real estate in Mexico’s Restricted Zone—land within 50 km (31 miles) of the coast or 100 km (62 miles) from the borders—requires a different process than buying inland property. If you’re considering owning property in Mexico’s Restricted Zone, here’s what you need to know.
Can Foreigners Own Property in Mexico’s Restricted Zone?
Yes! Foreign buyers can own property in the Restricted Zone, but they must do so through a fideicomiso (bank trust) or a Mexican corporation, depending on the intended use of the property.
What is a Fideicomiso?
A fideicomiso is a real estate trust set up with a Mexican bank that holds the title on behalf of the foreign buyer. The buyer retains full ownership rights and can sell, lease, or bequeath the property. Here’s how it works:
- The trust is set up for 50 years and is renewable indefinitely.
- The buyer is the beneficiary and retains control over the property.
- The bank acts as the trustee but cannot make decisions without the beneficiary’s approval.
- Buyers can transfer or sell the property at any time.
Steps to Buying Property Through a Fideicomiso
- Find the Right Property – Work with a reputable real estate agency to locate a home that fits your needs.
- Make an Offer and Sign a Purchase Agreement – This outlines the terms of the transaction.
- Select a Bank for Your Fideicomiso – A Mexican bank will establish the trust.
- Due Diligence and Title Search – Ensure the property has a clear title and is free of liens.
- Sign the Trust Agreement with a Notary – In Mexico, all real estate transactions must be formalized before a notary public.
- Pay Closing Costs and Fees – These include notary fees, bank trust fees, and government taxes.
- Register the Property – The notary registers the trust with the Public Registry, finalizing your ownership.
When Should You Use a Mexican Corporation?
If you plan to develop, rent, or operate your property as a business, a Mexican corporation may be a better option. Unlike a fideicomiso, a corporation allows you to own multiple properties and bypass trust requirements.
Benefits of Owning Property in Mexico’s Restricted Zone
- Full Control Over Your Investment – A fideicomiso gives foreign buyers the same property rights as Mexican citizens.
- Secure and Transparent Process – Mexican real estate laws protect foreign buyers.
- Great Investment Opportunity – Coastal properties have strong rental demand and long-term value appreciation.
Get Expert Guidance for Buying Property in Mexico
Navigating the purchase process in the Restricted Zone can be complex. Working with a trusted real estate expert ensures a smooth transaction. If you’re interested in owning property in Mexico’s Restricted Zone, contact us today to explore the best opportunities!