Buying Property in Mexico
Owning property in Los Cabos is one of life’s luxuries and great pleasures. And with just a little understanding of the ins and outs of owning in Mexico, it can be worry free. Canadians & Americans buy and sell property in Mexico every day. How does it work?
Mexican Property Trust (“Fideicomiso”)
Over the past several years, the Mexican government has made significant strides in attracting foreign investment to Mexico. One of the best and most common investments is owning property. Laws have been passed that have made investment in Mexico safer and easier than ever.
One of these laws formulated a method by which foreigners can hold safe and legal title. It is called a Mexican Property Trust (“Fideicomiso”). Modeled after a similar law used in Monaco, this Trust Agreement allows foreigners all rights of ownership.
The Department of Foreign Affairs in Mexico City issues a permit to a Mexican bank of the buyer’s choice to act as purchaser for the property. The bank acts as Trustee, and the buyer names the Beneficiary of the Trust.
The Beneficiary can be the buyer personally, multiple partners, an estate trust, a U.S. or foreign corporation or LLC, or any other entity of your choice. By law, the property is not an asset of the bank in this arrangement. The bank is simply the Trustee charging an annual fee of approximately $500.00usd.
The Beneficiary may use, occupy, bequeath or sell the property at their sole discretion by instructing the Trustee of their wishes. The initial term of the Trust is 50 years, and this term can be renewed indefinitely. In other words, the Trustee is in full, long-term control of the property. As with real estate ownership elsewhere, when you sell there are capital gains to be paid.
Our closing coordinator will handle all the paperwork and legalities for you, working with federal and state notaries. Typically, a Trust can be established within 60 days. You are notified and informed every step of the way, and we are always available to answer questions. Your deposit(s) and purchase funds are held in an insured Escrow Account until the Mexican Property Trust is complete and the property rights have been transferred to you.
U.S. Title Insurance is available and recommended for properties in Mexico purchased by U.S. citizens.