In this episode, we discuss the five most important things to know about real estate in Mexico for foreign investors. Mexico is the number 1 destination for American real estate investors. And for solid reasons, it has always led the list as a great place to retire; however, we have also seen a shift towards second homes and younger families permanently relocating. The new American dream is to be able to live in friendly and warm Mexico, where the cost of living is low and the quality of life is high.
1- Can you own property in Mexico as a foreign investor? Yes, you can and always have in mainland Mexico. Mexico amended its constitution over 40 years ago to permit foreign investment in the previously restricted zone, which included Baja. Now, for the last 40+ years, you can own property on all the beaches in Mexico. Some still think you can only lease homes on the beach. That is not true. Leases are only on Ejido (native tribal) land, much like BLM land in the USA or First Nations Reserves in Canada, where you can lease land and own the structure.
2- What is the restricted zone? In all of Mexico, the restricted zone is 100 kilometers from the borders and 50 kilometers from oceans and seas. Over 40 years ago, the Mexican Constitution was ratified to allow foreign investment in the restricted zone. This move was later reinforced in the early 1980s and further solidified in 1992 with the implementation of NAFTA. Back in the day, prior to this, most foreigners lived in wonderful Mexico City and Guadalajara, as well as foreign hotspots like San Miguel de Allende, Cuernavaca, and Ajijic. Since then, Billions of dollars have been safely invested in the restricted zone and will continue to grow as the costs of living have been low and the return on investment is high. Areas such as Puerto Vallarta, the Riviera Maya, and Los Cabos have experienced incredible development. Los Cabos in particular is the hotspot for luxury developments as well as value-minded properties for the rest of us.
Mexico remains an attractive destination for foreign investment, particularly due to its strategic location, competitive costs, and skilled workforce.
3- What is a Mexican fideicomiso? A fideicomiso is a type of bank trust that allows foreigners to own property in a restricted zone. It’s a legal mechanism that enables foreign individuals to indirectly hold property rights with a Mexican bank acting as the trustee. Essentially, the bank holds the legal title while the foreign buyer enjoys all the beneficial rights and use of the property in perpetuity. The fideicomiso is typically established for a 50-year period and is easily renewed. The bank, as trustee, does not have any ownership rights over the property and cannot use it for its benefit. Owning property through a Fideicomiso is a safe and straightforward process, but it does involve certain costs. Please feel free to contact us with the details.
4- Can I will it to my heirs? Yes, you certainly can. The title is transferable and willable. It is advised to have a separate will in both your home country and with a local notario (notary) where you own your property.
5- Can the Mexican government take it away from me? Only in the rare instance of eminent domain, as seen in the USA, Canada, and most parts of the world. The Mexican government cannot legally seize property from someone who has purchased it legally, unless it is for a public purpose and with proper compensation.
If you have any further questions, please don’t hesitate to contact us. We look forward to answering your questions and providing our expertise and services.
