Buying Property in Mexico
Have you ever wondered what it would be like to live year-round in Mexico? There are some great beaches, beautiful towns, colorful art, wonderful food, Mayan and Aztec history, deep sea fishing, and plenty of sun. The list goes on as you know. Over the years, purchasing property in Mexico was challenging, if not impossible, legally. Here is a little background along with a brief summary of the proper route to take when purchasing a piece of Mexican paradise. This might help put that dream back together again.
In 1973, the Foreign Investment Law allowed foreigners to purchase property anywhere in Mexico, except in the restricted zone which happens to be 32 miles from high tide and 64 miles from any border. Needless to say, most foreign citizens only wanted to buy property on the coasts or near the borders. Property sales diminished and/or land was taken back by the Mexican government. In 1994, Mexico passed an amendment to their Constitution allowing foreign parties to purchase property in the restricted zone. The key is to purchase with a bank trust or Fideicomiso.
Foreigners cannot own the property in restricted zones outright. Instead, a real estate trust, Fideicomiso, is set up. The Fideicomiso is executed between a Mexican bank and the seller of the property in the restricted zone. The bank acts on behalf of the foreign buyer, buying and taking title to the property. The foreign buyer retains all rights of ownership while ownership remains in the trust.
Before you begin, retain a Mexican attorney and ask to see his license. First, all foreigners are required to obtain a permit from the Ministry of Foreign Affairs. Next, to open your trust account, you’ll need your accepted offer for purchase, a photo ID and 10 percent of the purchase price of your new home. Do not give money to anyone other than a bank escrow representative when you sign a bank contract. Watch you steps, be careful, and work with reputable people.
Closing usually takes 30-45 days. Voila! A piece of Mexican paradise. A friend of mine recently moved, lock, stock, and barrel to Tulum, and loves it - the culture, scenery, food, and most importantly, the people.