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Buying Real Estate in Mexico
In order to obtain the rights of ownership through a Fideicomiso, the Department of Foreign Affairs in Mexico City issues a permit to the Mexican bank of the Purchaser’s choice, allowing the bank to act as Purchaser of the property. Essentially, the bank acts as the “Trustee” for the trust and the Purchaser is the “Beneficiary” of the trust. The trust is not an asset of the bank; the banks simply act as the Trustee to hold the trust.
Much like living wills or estate trusts in the U.S., with a Fideicomiso the Mexican bank, or Trustee, takes instruction only from the Beneficiary of the trust (the Purchaser). The Beneficiary has the right to use, occupy, lease and possess the property, including the right to build on it or otherwise improve it. The Beneficiary may also sell the property by instructing the Trustee to trans fer the rights to another qualified Purchaser, or bequeath the property to an Inheritor. The initial term of the trust is 50 years, however the trust can be renewed for additional periods of 50 years indenitely, providing for long-term control of the asset through the Fideicomiso.
The Purchaser holds the same rights as a property owner in the U.S. or Canada, including the right to enjoy, sell, rent, improve the property, etc.
This is not to be confused with a land lease. The property purchased is placed in a trust with the Purchaser named as the Beneficiary of the trust — the Purchaser is not a lessee. If the property purchased is already held in a trust, the Purchaser has the option of assuming that trust, or having the property vested in a new trust.
Owning real estate in Mexico is an incredible opportunity. However, there are some important statutes in place that foreign citizens must be aware of before they can own their own home here. Today, foreign citizens “own” property in Mexico’s restricted regions through a trust called a “Fideicomiso” which functions much like trusts in other countries. These regions are for any property within 60 miles from the border or within 30 miles of any coastline-which includes Los Cabos. It is highly recommended that each foreign citizen consult with a professional real estate agent or an attorney that has experience in foreign ownership of Mexican property within the restricted zones. I am here to help guide you through the process!
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