We see this question asked all the time: “Can foreigners really own property in Mexico?” So, here’s a quick rundown of the major rules and regulations for buying property in Mexico as a foreigner and answers to some of our FAQs.
First, it’s important to settle this once and for all - YES, foreigners can buy, own and sell real estate in Mexico - even in the so-called “restricted zones” along the borders and coastlines! Although foreigners are not permitted to own the property outright in these regions, you are permitted to buy condos, homes and land in Mexico using a simple real estate trust known as a fideicomiso.
When a foreigner buys real estate in one of Mexico’s restricted zones, the real estate trust is used to hold the property title for the benefit of the buyer. This arrangement is very similar to what is used to protect minors who inherit assets like real estate and stocks, with the bank acting on your behalf. Our real estate investment advisors always work with a reputable English-speaking Mexican attorney to complete this process, which ensures that all paperwork is properly registered and provides oversight throughout the transaction.
Your English-speaking Mexican attorney will also draw up the contracts, review the conditions and terms of sale, complete a title search and point out any problems you might run into. It’s essential to use a Mexican attorney who is familiar with all of the real estate laws that apply to buying property in Mexico, so don’t try to enlist your American attorney for help in this arena.
There is a common misconception about foreigners buying Mexico real estate, that the beneficiary loses all rights and benefits of the sale of the property being held in the trust, but this is simply not true! On the contrary, the beneficiary (buyer) has a contractual right under the trust agreement with the bank to any and all benefits that may result from the use or sale of the property. In short, under Mexican law, the bank trustee has a fiduciary obligation to respect the rights of beneficiaries.
Finally, it’s important to point out that a real estate trust (fideicomiso) in Mexico is considered a binding agreement and the beneficiary (buyer) can instruct the bank to sell or lease the property at any point in time. You can also develop and use the property according to your liking, within the general provisions of local law, building codes and zoning.
Do you have questions about investing in Mexico real estate? Share them in the comments!