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What You Should Know About Mexican Real Estate

Aug 28, 2017

Have you been looking to invest in property in Mexico? The dollar is stronger, it’s close to home and labor can be cheaper if you decide to build your home. As a foreigner, you are allowed to buy and own property real estate in Mexico, but there are some restrictions. Here’s what you should know.

Where can I buy and own land in Mexico?

According to the Mexican Constitution, foreigners can purchase land outright, outside 100 km (about 62 miles) from the border zone or 50 km (about 31 miles) from a beach (known as the restricted zone).

Am I allowed to buy inside the restricted zone?

Yes, however, this requires you to set up a trust (called a fideicomiso) through a Mexican bank to receive rights on real estate. The fideicomiso will provide you the rights and privileges of ownership, and you will be considered a Mexican national for ownership purposes.

What is a fideicomiso?

It’s a bank trust that goes through a Mexican bank and has been required by the Mexican government since 1972. You can apply and establish one for a maximum of 50 years and renew it every 50 years. You can designate the right to transfer your trust to any party, including a family member. You can only obtain a fideicomiso through an authorized Mexican banking institution.

Can I lease out my property in Mexico?

Yes, but don’t forget about reporting your rental income and paying your taxes. After you acquire your fideicomiso, you are considered a Mexican national and must abide to the laws or you may lose your rights as the holder of the fideicomiso.

If I want to set up a company in Mexico, can I do that?

You can set up and own 100% of a company in Mexico and buy real estate for business purposes, even within the restricted zone. It’s important to consult an experienced attorney who specializes in Mexican law so that the proper steps are taken to set up your company and buy real estate.

Buying a property in Mexico is possible as long as you do your research and you get professional guidance when it comes to setting up your trust or your Mexican company.

The international section at Martin & Drought can handle a full range of transactional services in the United States, Mexico and other countries. Our attorneys are licensed in Mexico and are fully bilingual, handling any questions you may have about real estate development, regulatory compliance, construction and much more in Mexico. Contact us today for a consultation.