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Mexico Real Estate Poised For Big Cash Inflow

12 September, 2012

Mexico real estate is about to receive a massive flow of new investment,thanks to changes in tax laws.

The reforms mean Mexico real estate investment trusts (REITS) will now be much more attractive and investors are expected to pour capital into the market.

REITs are essentially companies that are set up to invest in real estate,but under a lower tax burden. Shares in the REIT allow holders to invest efficiently in a real estate market,without owning property directly.

The framework for Mexican REITs,called Fibras (Fideicomiso de Infraestructura y Bienes Raices),was established 5 years ago,but until now it wasn't very tax-efficient,so the concept had not taken off.

However,last Friday,Alejandro Werner,Mexico's Deputy Finance Minister,told Reuters news agency that the cumbersome tax laws have been changed and in the next few months he expects there to be more activity and a broader range of Mexican REITs available.

The Mexican Stock Exchange,where the shares of Mexican REITs will be traded,said,last month,that they expect a big demand. Luis Tellez,head of the exchange,said,"there is major interest" from real estate development companies.

The extra investment and liquidity provided by the new REITs will have a direct impact on Mexico real estate. As cash flows in,property prices can be expected to rise due to the extra demand created.

Take a look at our main website to learn more about investment opportunities in Mexico real estate.