Q:Can foreigners own a property in Mexico?

A: Yes, foreigners can own a property in Mexico. However, there is a restricted zone in which foreigners can only purchase property through a Bank Trust known as Fideicomiso. The “restricted zone” includes border and coastal properties, 100 kilometers along the borders and 50 kilometers along coasts.


 Q: How can a foreign own properties in the restricted zones?

A: In order to permit foreign investment in these areas, the Mexican government created the "fideicomiso," (FEE-DAY-E-CO-ME-SO) which is, roughly translated, a real estate trust. This type of trust is similar to trusts used in the United States, but a Mexican bank must be designated. The bank, as trustee, buys the property for the foreigner, and then has a fiduciary obligation to follow instructions given by the foreigner who is the trust beneficiary. The trust beneficiary retains and enjoys all the rights of ownership just as a Mexican would do. The foreigner is entitled to use, enjoy, and even sell the property that is held in trust at its market value to any eligible buyer


Q: How long does the “real estate trust” last?

A: Real Estate trusts are valid for a period of 50 years and according to the Foreign Investment Law passed in 1993, trusts can be renewed for an indefinite number of successive 50 year periods. In effect they run in perpetuity.


Q: Is there any additional fee that applies for the Bank Trust?                     

A: The bank charges an annual fee, based on the value of the property, to cover its services as a Trustee.


Q: What happens if the Bank goes bankrupt?

A: As we have seen in other cases in the world, typically when a bank declares bankruptcy, a competitor in better standing will buy the bank. Even if bankruptcy is declared and the bank is purchased, the Fideicomiso belongs to you, not the bank.  The property is not part of the bank´s assets.


Q: What are my rights as a buyer?

A: The Trust is a legal substitute for simple ownership, but in many cases, the Trustee is the legal holder of the property. As Beneficiary, you have the right to sell your property without restriction. You may also transfer your rights to a third party or pass it on to named heirs. You have the same rights as a Mexican citizen; you just need to notify the Bank before selling the property since your Trust will be cancelled.


Q: Can I hire an Attorney from my country or do I need to hire one from Mexico?

A: Investors should hire competent Mexican legal counsel when completing any real estate transaction. Mexican laws and practices regarding real estate are different from other countries, just like the laws for real estate in the United States and Canada. After many years of doing real estate in Playa del Carmen, we know who the best firms are.


Q: Which are the parts involved in Real Estate transactions in Mexico?

A: Normally there are five players involved in a real estate transaction - the buyer, a real estate agent, a bank, the seller and a Public Notary.


Q:How are property taxes calculated?

A: Property taxes have historically been low in Mexico because they have never been considered a source of governmental revenue. Known as Predial, the tax is calculated as a percentage (currently .25% of the assessed value), determined at the time of sale. Generally speaking, you can expect to pay $100 USD per $100,000 USD of assessed value yearly.