Have you been wondering if it is possible to purchase property legally in Mexico? If you have, then you will be glad to hear that it is very possible and very legal. Foreigners can also purchase real estate that is near the popular beaches that are in Federal Zones areas (although there are some restrictions and special measures that must be taken).
Purchase property legally in Mexico
We often hear from foreigners that they though it wasn’t possible for non-Mexicans to purchase property legally in Mexico and that they need to get a “presta-nombre” (a Mexican who would “lend their name” for the deeds). That is not true. In most places in Mexico, there are no restrictions at all on foreigners purchasing property legally in Mexico. However, that being said, there are restrictions on foreigners buying property within 50 km (thirty one miles) from the beaches and coast along with 100 km (sixty two miles) from any international borders. Nevertheless, these restrictions are purely a formality that can be circumnavigated legally through a bank trust.
Bank trust for foreigners
Foreign investors can purchase property in the Federal Zones with a land trust called a fideicomiso. A fideicomiso trust must be organized with a Mexican bank for the property purchase to be legal in Mexico within the restricted zones. This is good news to foreigners that are wanting to purchase property in Mexico. The land trust process is easy to do and understand and the service is offered by many, many banks.
The Mexican bank will be the trustee of the property and will represent the foreigner who is wanting to purchase the restricted zone property. The foreigner will have all the rights as the bank will act as an intermediary only. The foreign buyer is the beneficiary and will hold all rights to the bank trust and the Mexican bank is the trustee that manages and oversees the bank trust. The foreign buyer (you) can occupy the property or you have the right to sell, rent, transfer, or add a beneficiary in a will.
Are Bank Trusts Renewable?
An important question that foreigners ask is, “Are bank trusts renewable”? The Fideicomiso bank trust is 50 years and yes, it can be renewed at the end of the bank trust term of 50 years. If you sell the property to a national of Mexico, then the bank trust can be terminated. If you sell the property to another foreigner or non-citizen of Mexico, then you can transfer the bank trust rights to the foreigner or they can also choose to have their very own fideicomiso contract dram anew.
Adding a Beneficiary
One thing a foreign owner must do is to establish a beneficiary once the bank trust has been finalized. The beneficiary will be a substitute beneficiary that will be granted the rights of the bank trust if the primary beneficiary des before the 50 year bank trust has ended. Doing this will allow the bank trust to provide additional benefits for their beneficiary and the beneficiary will not have to worry about any probate hearings that could occur with the Mexico courts, and in the long run it will save you money and time along with the beneficiary.