For foreign buyers, the idea of buying property in Mexico is often confusing. A big myth is that buying property in the country can be a long drawn out process and risky.
While we’re not saying that buying real estate in Mexico is easy. Like every real estate buy there are important things for you to know. These things will help you have a smooth and safe experience when buying your Mexican property.
The Big Myth about Buying Mexican Property (as a Foreigner)
The idea buying property in Mexico being difficult comes from the lack of understanding of the Mexican law for foreigners. Once upon a time foreign buyers were not allowed to buy land within the ‘Restricted Zone‘. The restricted zone is all land within 100 kilometers of Mexico’s borders and 50 kilometers within all coastlines.
But things have changed with the Mexican government granting property ownership for foreigners by law. Allowing foreign buyers to buy property within the restricted zone. These policy changes make buying property in Mexico easy and safer than ever before.
2 Essential Things for Buying Your Property in Mexico as a Foreigner
The 2 important things to consider when buying property in Mexico:
1. Your title insurance policy.
2. Your bank trust (fideicomiso).
These two documents guarantee you all the benefits of property ownership at no risk.
What’s a Title Insurance policy for your Mexican Property?
A title insurance policy is a contract between the buyer-or lender-and a title guarantor. It protects the lender or owner against loss in case of a dispute in property ownership. Only reputable real estate companies offer options for a title insurance policy when you buy property in Mexico.
What’s a Bank Trust or Fideicomiso?
A bank trust or fideicomiso is a contract between the lender-in (this case the Mexican bank) and you the property buyer. The lender (the bank) acts as a trustee for the buyer. They are under legal obligation to follow all the instructions of you the buyer of the property. While the lender holds the title to the property, you the buyer have all rights and privilege as the owner. This includes assigning other beneficiaries and transferring ownership if you wish too. A fideicomiso lasts for 50 years. You can renew after this period is up.
Is a Fideicomiso (Bank trust) the right option for you?
Yes. A fideicomiso is a better option for foreign property buyers compared to a land lease agreement. A land lease will only allow the lessee limited rights to use the property. For example: If you want to build or construct on that land you will need permission of the owner/landlord. And lessee is not allowed to sell the property. However a fideicomiso guarantees you the buyer the freedom of ownership. You can do whatever you want as its your land. We suggest talking to us today if you are thinking about owning Mexico property as a foreigner. We have the team to faciliate you fully in this whole process.