Updated on March 17, 2022
The Real Estate Trust
One question I always get from foreigners: “Can I own property in Mexico?”
Yes, foreigners may obtain direct ownership of property in the interior of Mexico. However, under Mexican law, foreigners cannot own property outright within the restricted zone.
Properties within the 50 km of any ocean front and 100 km of any border must be acquired via a Bank Trust (Fideicomiso in Spanish) or via establishment of a Mexican Corporation. If you want to acquire a property solely as a residence, you need to acquire with a bank trust. If you want to acquire for purposes other than residential, you can acquire via Mexican Corporation with certain requirements and procedures.
What is a Real Estate Trust ?
— A Real Estate Trust enables foreigners to acquire the rights to real estate in Mexico’s beach and border areas. —
A Real Estate Trust is the necessary vehicle for foreign individuals or companies to acquire real estate rights within Mexico’s Restricted Zone (beaches and border areas). The Restricted Zone is the strip of land 100km wide along Mexico’s borders and 50km wide along the shoreline. The Real Estate Trust allows you unrestricted use of such property for a period of 50 years (which may be extended for additional terms), as well as the right to sell or encumber the property. As a beneficiary of the Trust you retain all the rights to use and enjoy the property.
What are your rights as a buyer ?
The bank trust is a legal substitute for fee simple ownership, but in many cases, the trustee is the legal holder of the property. As beneficiary, you have the right to sell your property without restriction. You may also transfer your rights to a third party or pass it on to named heirs.
If you decide to sell your property, can anyone buy it?
Yes, you can sell to either a Mexican or a Non-Mexican. Please note that a Non-Mexican would also be required to set up a bank trust or take over your existing bank trust. This is known as an Assignment of Rights (Cesión de Derechos) and depending on the amount of time left on the existing trust, the buyer may be advised to take over the trust rather than pay set-up costs to create a new trust.
In order to create a new trust, there will be added fees and the cost of extinguishing the current trust.
Anytime a person accepts to carry out an assignment of bank-trust rights they agree to comply with all the conditions and obligations established in the bank trust already created.
Cost of a real estate trust
The start-up cost is around 1,900 USD. These fees include:
- Federal fees to the Department of Foreign Relations for authorization of the trust ($16,525.99 pesos in 2022),
- acceptance fees $464 USD
- the first annuity of $522 USD.
The annual fee is $522 for all subsequent years until you resell your property.