A lot of expats send me questions like. Can a Non- Mexican buy a property in Mexico? What’s the process of buying a Real Estate in Mexico? How much taxes do I need to pay, and so on..
Well let me start saying… SI! Yes You can own a piece of land, apt, or house in Mexico. Even if you are not Mexican.
The process it's pretty simple and the only thing you need is a FIDEICOMISO.
A "Fideicomiso" is a Mexican TRUST.
The way it works is the Mexican Government issues a permit to a Mexican Bank of your choice, allowing the bank to act as purchaser for the property. The bank acts as the "Trustee" for the Trust and you are the "Beneficiary" of the Trust.
The "Beneficiary" rights are very similar to Living Wills or Estate Trusts in the U.S. The law authorizes Mexican banking institutions to act as trustees.
A trustee takes instructions only from the beneficiary of the trust (the foreign purchaser meaning YOU).
The beneficiary has the right to use, occupy and possess the property, including the right to build on it or otherwise improve it. The beneficiary may also sell the rights and instruct the trustee to transfer title to a qualified owner.
The home or property that you buy will be put into a trust with you named as the beneficiary of the trust - you are not a lessee.
You have all the rights that an owner of property in the U.S. or Canada has, including the right to enjoy the property, inheritage someone the property, sell the property, rent the property, improve the property, etc. The initial term of the trust is 50 years. An investor can renew the trust for an additional period of 50 years within the last year of each 50-year period, and this process can be continued indefinitely, providing for long term control of the asset.
How all this started?
. It was not until 1822 that Mexico declared its independence from Spain, much like the U.S. declared independence from England, but even with this new independence, the lands of Mexico were still owned by wealthy foreigners, the Mexican upper class and the Church.
Porfirio Diaz, a former President of Mexico for over 30 years, nearly sold all of Mexico to foreigners during his term.
Soon Mexicans realized that more Americans were buying more and more land in the north border. Mexico was afraid that sooner than later Americans would try to invade Mexico again and make Mexico smaller and smaller.
The 1917 Mexican Constitution banned foreign ownership of any land within the Restricted Zone, which is, the land located within 100 kilometers (62 miles) of any national border and within 50 kilometers (31 miles) of any ocean.
In an effort to promote foreign investment, Mexico enacted new regulations designed to relax the restriction on foreign investment, which formerly limited foreign ownership of Mexican companies to 49 percent. Under the new regulations, foreign investors can now own up to 100 percent of a large number of enterprises, including hotel companies, development companies, etc. without prior authorization from the Foreign Investment Commission. Thus, foreign investors in these enterprises have been put on equal footing with local investors and are no longer required to engage a Mexican investment partner.
The Mexican government has stated that it aims to double the number of foreign tourist arrivals into Mexico, representing foreign exchange revenue of $5 billion plus annually. A key to achieving the government's goal of ten million visitors a year is to develop new tourist destinations with modern facilities and infrastructure.
Getting this Fideicomiso is something you do by yourself?
Well, As I always tell my clients I am a Real Estate Advisor and my job is to help you find the best Real Estate opportunities in the Riviera Maya. I recommend that you get the help of an Expat lawyer in Mexico.
Now, If you've ever wondered, "Is buying property in Mexico a good investment", the short answer is a resounding "Yes, si!" In fact, owning a vacation home in a popular destination like Playa del Carmen or Tulum can provide incredible ROI and portfolio diversification, but first you have to know where to look! To see the difference between Cancun, PDC or Tulum click here.
The property tax on Mexican real estate is called predial. Compared with property taxes in the U.S., the cost of the predial is quite reasonable. It is a local tax and in most areas is payable quarterly. The average is approximately 0.1% of the assessed value of the property at time of sale.
For more information about Taxes in Mexico click on this link
There you have it, if you like these quick videos with tips about how to live in Mexico, give it a like and share with someone you know that can use this information. Subscribe and click on the little bell to get more videos.
And remember Mi Casa es TU casa :-) Well, no really… actually my house it's my house only … so get your own house, I'll help you how. ;-)
See you in the next blog.