Fideicomiso: Buying Real Estate in Mexico
Many people still have the misconception that you can only lease property in Mexico, however, things have changed with the North American Free Trade Agreement. Americans and other foreigners can own property in Mexico. When owning property within 60 miles of the U.S International border, or within 30 miles of the Mexican coast, the secure method of foreign ownership through a Mexican property trust is through a fideicomiso. A Fideicomiso is a trust agreement similar to an estate trust in the U.S. This gives the purchaser all of the rights of ownership.
The Fideicomiso Process
The Fideicomiso process involves the Department of Foreign Affairs in Mexico City issuing a permit to the Mexican bank of the purchaser's choice allowing the bank to act as a purchaser of the property. In essence the bank acts as the Trustee for the trust and the purchaser is the beneficiary of the trust. The trust is not an asset of the bank; the bank is simply acting as the trustee to hold the trust. In this way a foreigner goes through the bank to purchase and own a property in Mexico.
Fideicomiso is a well established process for foreigners to purchase property in Mexico. It works similar to a will or estate trust in the US. The Mexican bank or Trustee, takes instruction only from the Beneficiary of the trust which is you the purchaser. The beneficiary has the right to occupy, use, lease and possess the property. This includes the right to build on ir or otherwise improve it. The initial trust is for 50 years and is renewed for additional periods of 50 years indefinitely. This should not be confused with a land lease.
Through Fideicomiso you can feel safe that you own your home and it is a dream that can remain in your family as long as you own your home. At Cabo Dream RE we will walk you through each step of Fideicomiso to ensure everything is done properly.
Please check out our FREE no obligation Buyer’s Guide to get started.