How to buy a Property in Mexico
I´m sure you have heard many horror stories about being unable to buy a property in Mexico, specially in Playa del Carmen and Riviera Maya. The internet is a double edged sword, please don´t believe in everything you read. That´s why you should always work with a Real Estate Agent, to get the most accurate and updated information of the Legal part of purchasing a Property in Mexico. So continue reading…
The current laws require foreigners that buy within 50 kilometers from the coast or 100 kilometers from the international boarder to set up a fideicomisco. A Fideicomisco or Trust is a contract between its beneficiary and a financial institution. The original Constitution of Mexico did not allow foreigners to control interest in property at the borders or coast for security reasons of invading armies. Today this is no longer an issue but instead of changing the Constitution, a clever way of letting foreigners buy in these restricted areas was developed. You full own the property and you can do whatever you please with it, rent it out, use it, give it away, inherit it, etc., because it is yours, It´s just the Financial Institutions or Banks that will keep the Title in a Trust and keep it for you, the bank gets a fee for doing so. Typically isa round 500 usd per year. This process is required by Article 27 of the Mexican Constitution and is just one different step to take when purchasing.
Having a Trust has many advantages. You can name your subsitute beneficiaries when you purchase the property and if you pass away, the property will go automatically to your beneficiaries without having to go through the testamentary process in your country.
Also, having a Trust means that a deep due diligence of the property has been done. In Mexico, Notarios are big lawyers and appointed by the state Goverment. They are licenced to sign and stamp and research properties, they are not just clerks. So the Notary after doing the title research and due dilligence of the property will deliver an opinion to you to purchase or not that particular property. If there is any irregularity in that property, the Notary will point it to you. This is the most secure part of the purchase because having the Trust means that your property is clean and clear and protected by the law.
Finally, let´s say that something happens back in your country, an accident where you are liable, or your company is in foreclosure, no foreign goverment can touch your property in Mexico. It is secure by the Trust.
When you decide to sell your property, you simple cancel the Trust and the new owner will have to have it´s own Trust for the property. As simple as that.
Questions? Email us!