Yes, a person of any nationality can legally buy real estate in Mexico. However, to purchase property within the restricted zone, (50 kilometers or 31 miles from the shoreline) foreigners are required to purchase property through a bank trust (fideicomiso) or by establishing a Mexican corporation.
FAQ
Can foreigners buy real estate in Mexico?
What is the restricted zone in Mexico?
The restricted zone is property within 50 km or 31 miles of Mexico’s coast, or within 100 km or 62 miles of Mexico’s borders.
What is a fideicomiso?
Fideicomiso is a bank trust created in order to comply with the provisions of Article 27 of the Mexican Constitution in which foreigners are limited in acquiring the direct title to the property in the restricted zone.
How long does it take to complete a fideicomiso?
To request a permit and complete the process may take five to six weeks.
What are some of the details of the fideicomiso?
- The bank’s name appears on the title as the owner of the property. However, the beneficiary has all the rights over the property, including the right to: sell, rent, renovate, build, etc.
- The bank cannot sell or dispose of the property without the beneficiary’s written consent.
- The properties held in trust are not considered an asset of the bank.
- To establish a trust for a property in the restricted zone, it is necessary to obtain a permit from the Secretaría de Relaciones Exteriores (Secretary of Foreign Relations) which has a duration of 50 years and is perpetually renewable or transferable.
- The beneficiary must pay an annual fee to the bank for the administration of the trust, which, depending on the bank, will be between $500 and $600 USD.
- If you want to purchase more than one property, you can do it with the same Trust. However administratively speaking the fees are per Property, therefore, each property that you buy would require an additional fee.
Do I need to be a resident to buy property in Mexico?
No, you do not need to be a resident to buy real estate in Mexico.
Can I also purchase property through a Mexican Corporation?
Foreign individuals looking to invest and do business in Mexico can do so through the incorporation of a Mexican Company.
What are the benefits of creating a corporation?
- A Mexican corporation has the same legal rights as a Mexican Citizen to acquire property anywhere in Mexico, including real estate in the restricted zone, without acquiring through a fideicomiso.
- The corporation has the potential to be a very lucrative venture by renting out prime vacation property.
- You can also start a business and receive dividends and tax advantages from your Mexican Corporation.
- Investing in a Mexican Corporation also provides the required financial data to aid in residence visa applications.
Can foreigners set up a Mexican corporation?
Yes, a Mexican corporation may be 100% owned by foreigners.
What is the time frame to set up a Mexican corporation?
Time will vary, but typically up to three weeks is required to complete the process.
How many properties can be obtained through a Mexican corporation?
There is no limit to how many properties a Mexican corporation may own.
Are there any disadvantages of setting up a Mexican corporation?
The accounting requirements of a corporation can be tedious. Business owners and corporations must report monthly and annual financial activities and file reports as well as conduct annual shareholders meetings.
What should I do before I purchase property?
Consult with a real estate lawyer who will provide a comprehensive and rigorous approach to due diligence, provide an estimate of closing costs, insured escrow services, and Guaranteed Title Deed.
What is the role of the notary public in Mexico?
During the real estate purchase process, the Notario Publico will authenticate all the legal documents, transfer the title, calculate the capital gains tax and ratify all real estate transactions in Mexico. If a real estate transaction was not recorded in the Public Registry by a Notario, it is not valid.
Why do I need a lawyer to purchase property?
A Notario Publico is appointed by the State. They can not advise and consult the parties to a real estate transaction as they could possibly be in a situation of conflict of interest. They can not function as your lawyer. Their job in this situation is to be neutral, as the notary is working for the buyer, the seller, and the government. Therefore it is advisable to hire a lawyer to represent your interests. The lawyer will ensure there is no human errors or omissions and that your property title is registered correctly, review the chain of ownership, ensure the seller has the right to sell, and verify that taxes and utilities have been paid in full.
Hire a law firm that will provide a Title Guaranty and ensure you receive a free and clear title.
Should I use a settlement company or a lawyer during my real estate transaction?
Definitely hire a lawyer; a settlement company does not have any legal training or education. They only act as a referral service by sending the purchaser to a Notario Publico and a Bank Trust without providing any further assistance or advice. A settlement company cannot provide legal or tax advice, they do not perform due diligence on the property title nor provide a Title Guaranty. Also, as an unregulated service provider, should you have a complaint or a claim to make against them, you will have no recourse other than to sue them in civil court.
Do I need to purchase title insurance?
No! Many foreigners investing in Mexican real estate are led to believe that they will need to purchase title insurance on their prospective property. However, if you choose a reliable, competent law firm to represent you during your real estate purchase, they will carry out all the due diligence, ensuring your title deed is clear before proceeding with closing. Choose a law firm that provides a Title Guaranty on your investment.
Can my real estate agent or the developer hold my funds in escrow?
No! The traditional escrow accounts which are familiar in Canada and the US do not exist in Mexico. Neither Mexican lawyers, the Notario Publico nor real estate agents are authorized to provide escrow services. We recommend hiring an attorney who will provide an insured escrow service from Canada or the US for Mexican transactions.
What type of visas are available in Mexico?
- Visitor
- Visitor with permission to perform lucrative activities
- Visitor without permission to perform lucrative activities
- Regional visitor
- Cross-border worker visitor
- Visa for humanitarian reasons
- Visitor visa to conduct adoption proceedings
- Resident
- Temporary resident
- Temporary resident student
- Permanent resident
I am retired and would like to relocate to Mexico, which visa is right for me?
A temporary or permanent residency visa.
- Temporary allows you to stay in Mexico for up to 4 years.
- Permanent residency allows you to stay indefinitely.
I would like to work in Mexico, how can I get my work visa?
Your employer will need to begin the process at the immigration office in Mexico, and you must apply in the Mexican consulate in your country.
Why would a foreigner become a Mexican citizen?
- Residency
- Their children were born in Mexico
- Marriage to a Mexican
- Purchase property in restricted areas without a trust (fideicomiso).
- The possibility of dissolving your current trust (fideicomiso) and rewrite the title deed in your name.
- The right to vote in Mexico.
- No need to inform the National Institute of Immigration (INM) of each change regarding your living and work situation.
- Avoid the expense of changing your immigration status or renewal fees.
- Hold a Mexican passport and enjoy reduced wait times for immigration at Mexican airports.
- Hold dual citizenship.
- The right to work for any employer in Mexico.
I have residency in Mexico; can I invite my family to live here?
Yes, as a temporary or permanent resident, you can request the entry of:
- Spouse or common-law spouse
- Parents
- Children
- Spouse or common-law’s children
- Dependent adult child