Foreigners can legally own property in Mexico. There seems to be a lot of misconceptions about this because the law in Mexico is complicated. If the property is within 100KM (52 miles) of the boarder or 50KM (31miles) of the coastline then a foreigner must hold the property in a bank trust called a Fideicomiso (Fee-day-co-me-so).
Some people confuse this with a long term lease which will expire. It is not a lease and you do own the property. A Fideicomiso is a real estate trust where the bank is the trustee and the foreigner is the beneficiary. The beneficiary has unrestricted use of the property including the ability to sell it or bequeath to whomever he chooses whenever he chooses. The trust is for fifty years and can be renewed. If the property is sold, the current owner of the property may transfer the rights of the trust to the new owner so that the name of the beneficiary on the trust will be the name or names of the new owner or owners. There are Mexican Citizens who choose to put there property in a Fideicomiso because it is more protected than if it is held in a regular title. The bank actually protects your rights to the property so that it can not be taken away in the event of a law suit or a bankruptcy. Furthemore, in order to have a bank trust, all the documents of the property need to be legal and in order.
If, you are purchasing land that is not close to the border or the coastline you are not required to use a Fideicomiso. Foreigners may legally own this property in Mexico and hold the title themselves. However, land purchase in Mexico is complicated and determining who has the original title can be convoluted. Add to this the fact that Mexico has both "Ejido" and "Comunero" land (which is similar to what we might consider Indian reservation land) and it becomes obvious why there are so many misconceptions.
Unbelievably some people are willing to buy property in what is referred to a "Pres de Nombre". Essentially this is like purchasing property in someone else's name. The price might be right but at the end of the day you do not own it. Our mantra is that if you are not able to put the property into a Fideicomiso you probably are not permitted to own it, whether you choose to use a Fideicomiso or not is a separate issue. To establish a Mexican corporation is another option for a foreigner to legally own property in Mexico and one would want to consult a tax specialist before determining if this is a better option. By having a Mexican corporation you will have to declare taxes every month.
As I mentioned earlier, determining the original title can be a convoluted process and under most cases title insurance would be a recommended investment. FONATUR is a wing of the federal government developed to promote and foment tourism within Mexico. In Huatulco, the government expropriated about 20 KM of property along the southern pacific coast of Oaxaca in order to develop a tourist destination. Prior to this there was virtually no infrastructure in this area. In the 1980´s FONATUR began to install world class infrastructure; electrical plants, water treatment, sewage, paved roads, parks and boulevards as well as an international airport, a golf course and two marines. Every man, woman and child from the expropriated region received a cash settlement along with land in La Crucecita, which has become the vibrant town center. In the last decade many foreigners and wealthy Mexicans have built luxury homes here and have the first title ever issued on the property. These titles were issued by the Federal Government. Prices may be higher within a FONATUR development than some areas of Mexico because the purchase is secure and also because you are getting first world infrastructure. Even in current economy, prices here for a luxury ocean view vacation home are a bargain and Huatulco has excellent potential for investment, in Mexico, like everywhere else, you get what you pay for. This nine bedroom ocean view villa is currently asking $1,250,000. USD. If you are ready to find your place in the sun, Black Stone Real Estate in Huatulco,is here to help you
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