Are you a foreign national buying property in Mexico?
Perhaps you are just wondering how it would feel to wake up in the tropical weather of Yucatan or maybe you are already prepared to make an offer on your dream home. In any case, you will probably require a bank trust if you are a foreign national buying property in Mexico. Here are some answers to the most FAQs related to Bank trusts to adquire your dream home in the Mexico.
1. Can Foreigners Buy Property in Mexico?
Yes, foreigners can buy property in Mexico, including in restricted zones (within 50 km of the coastline or 100 km from borders). However, in restricted zones, they must acquire the property through a legal instrument called a fideicomiso (trust). This trust allows foreign buyers to hold and enjoy the rights of property ownership, while the title is held by a Mexican bank. This is a viable and reliable vehicle to buy property in the region of the Yucatan Peninsula.
2. What is a Fideicomiso, and How Does It Work?
A fideicomiso is a trust agreement where a Mexican bank acts as the trustee, holding the legal title to the property on behalf of the foreign buyer (beneficiary). This trust grants the buyer all the rights of ownership, including the ability to lease, remodel, or sell the property. The trust is established for 50 years and can be renewed for an additional 50 years, giving foreign buyers long-term control over their investment.
3. What Documents Are Required to Set Up a Fideicomiso?
To set up a fideicomiso, you will need to provide several key documents, including but not limited to:
Valid passport (proof of identity)
Proof of legal status in Mexico (residency visa)
A property description, including its boundaries and distance from the coastline
Proof of address.
Payment of necessary fees and trust setup costs
Working with a legal advisor, like Solis y Castro Abogados Inmobiliarios, ensures that all required documents are submitted properly, speeding up the process.
4. How Long Does the Fideicomiso Last, and Can It Be Extended?
The initial fideicomiso lasts for 50 years, and just before the term ends, you can apply for an extension. The extension can last for another 50 years, allowing you or your heirs to continue enjoying the property for generations. There is no limit to how many times the trust can be renewed, offering foreign buyers long-term security.
5. Are There Any Restrictions on Using the Property?
Foreigners who own property through a fideicomiso can use it for residential purposes or rent it out, but they must abide by Mexican laws and local regulations. For instance, any remodeling or construction projects must comply with local zoning laws and condominium rules if applicable(Preguntas Frecuentes - …).
One key obligation is that the beneficiary must consider themselves Mexican in relation to the property, meaning they cannot seek diplomatic protection from their home country in case of property disputes.
6. Can I Sell or Transfer My Property Held in a Fideicomiso?
Yes, as the beneficiary of the fideicomiso, you have the right to sell, lease, or transfer your property to another person, including other foreigners or Mexicans. The sale or transfer must involve the bank that holds the trust, ensuring all legal formalities are adhered to. This flexibility allows you to treat the property as your own investment, enjoying the full benefits of ownership.
7. What Are the Costs Involved in Setting Up and Maintaining a Fideicomiso?
Setting up a fideicomiso involves several fees, including:
Federal permit fee for the Foreign Affairs Ministry + processing fee ($20,000-30,000 mxn [$1000-$1,500 USD].
Annual trustee fee to the bank (around $500 USD, depending on the bank)
Trust setup fee, including legal documentation and administrative costs (usually between $400-$500 USD).
Legal team fee (depends on the firm, enquire with us).
Additionally, if the property exceeds 2,000 square meters, the trust may require further documentation, including a commitment to invest a specified amount of money within the first two years.
8. Is There a Limit on the Number of Beneficiaries in a Fideicomiso?
No, there is no limit to how many beneficiaries can be named in a fideicomiso. Whether you want to designate your spouse, children, or other relatives, you have the flexibility to include as many substitute beneficiaries as you wish. This ensures your property rights are passed on without complications.
9. Can a Corporation Own Property in the Restricted Zone?
Yes, foreign corporations can own property in restricted zones if they are set up as Mexican corporations. However, it’s essential that the corporate structure complies with Mexican law, and no other foreign company or trust can be part of the ownership structure. Foreign-owned Mexican corporations are often used for commercial properties rather than residential.
10. Why Should I Hire a Lawyer When Buying Property in Mexico?
While it’s possible to navigate the fideicomiso process on your own, hiring a specialized real estate lawyer, like Solis y Castro Abogados Inmobiliarios, is highly recommended. A lawyer ensures that all legal aspects are covered, from selecting the best trust conditions to verifying that all documentation is in order. They also help select the best bank, handle any disputes, and guide you through any complexities that arise during the property transaction process. With their expertise, you can be sure the process is smooth, transparent, and secure.
11. Why Should I Hire Solis y Castro Abogados Inmobiliarios?
Leveraging our extensive experience, we go beyond simply connecting you with a bank. We offer tailored representation, carefully selecting a specialized bank that provides transparent fees, no annual increases on your trust fee, and personalized service. Our role extends to liaising with the selling party, ensuring that the entire process runs smoothly and efficiently, all for a fair and competitive price.
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