The trust for purchasing property in Mexico as a foreigner is commonly known as a fideicomiso. It is a legal arrangement where a Mexican fiduciary bank holds the title to the property on behalf of the foreign buyer. This trust allows foreigners to acquire and hold property in the Restricted Zone, which includes land located within 100 kilometers (62 miles) of any national border and within 50 kilometers (31 miles) of any ocean.
The fideicomiso is established as a long-term irrevocable bank trust, typically with a duration of 50 years and renewable in perpetuity. Under this arrangement, the foreign buyer retains all the rights to own, occupy, remodel, sell, gift, or pass on the property to their heirs. The fiduciary bank acts as the trustee, holding the legal title but granting the beneficial use and enjoyment of the property to the foreign buyer.
The origin of the fideicomiso can be traced back to the 1917 Mexican Constitution, which prohibited foreign ownership of land within the Restricted Zone. However, in the 1970s, Mexico recognized the importance of foreign investment and sought to attract it for economic development. To address the constitutional restriction while allowing foreigners access to desirable coastal real estate, the fideicomiso structure was introduced. It created a legal framework that allowed foreigners to enjoy the benefits of property ownership while complying with the constitutional provisions.
The fideicomiso provides a secure and recognized method for foreign investors to acquire and enjoy property in Mexico's Restricted Zone. It is a well-established and widely used mechanism that ensures protection of foreign ownership rights while respecting Mexican laws and regulations.
In a fideicomiso arrangement, the bank holds the title to the property in trust, and the foreigner is designated as the beneficiary of the trust. The foreign beneficiary has the equitable interest in the property, which includes the right to sell, improve, will to heirs, or exercise any legal right under the law. The bank, as the trustee, does not have ownership rights over the property and cannot take any action without written instruction from the beneficiary.
Any market variations, such as changes in property value or equity, would indeed affect the beneficiary of the trust, not the bank. The beneficiary would benefit from any increase in equity or experience any loss of equity associated with the property.
During the sale process, when the transfer of the property to a new buyer takes place at the office of a notary, the foreign owner (current beneficiary) can assign their beneficial interest in the trust to the new buyer. This assignment allows the new buyer to step into the role of the beneficiary and become the holder of the beneficial rights of the trust.
When a property is sold and the beneficial interest in the fideicomiso needs to be transferred to the new buyer, the process typically involves the following steps:
The process can vary based on individual circumstances, the specific fiduciary bank involved, and any additional requirements imposed by local authorities. Working with experienced professionals, such as real estate agents, attorneys, and notaries, can help ensure a smoother process and proper compliance with legal requirements.
In the unfortunate event of the buyer's death, the transfer of the property title to the designated beneficiaries, such as the spouse and family members, typically involves the following steps:
It is important to note that the specific requirements and procedures may vary depending on the jurisdiction and the individual circumstances of the case.
When buying a home in Mexico, it's important to consider the closing costs associated with the purchase. These costs typically include the following:
It's important to note that the specific costs and their amounts can vary depending on various factors, including the location, the value of the property, and the service providers involved. The notary closing the sale will typically compute the closing costs and provide you with a breakdown of the expenses
When you are ready to make an offer on a property, we will assist you in preparing the offer to ensure clarity and understanding. Our offers are presented in a double-column format, providing both English and Spanish versions, so that you have a clear understanding of the terms you are agreeing to. The standard offer will include the following elements:
If you are not physically present in Puerto Vallarta, we understand that you may need to sign the offer remotely. In such cases, you can scan and email the signed offer to us, and we will present it to the agent representing the seller of the property on your behalf.
It's important to have a clear understanding of the terms and conditions outlined in the offer before signing it. We will be available to answer any questions or provide clarifications to ensure that you are comfortable with the offer and the process. Our goal is to make the offer preparation and presentation as seamless and convenient as possible for you, regardless of your physical location.
There are some key differences between a title agency in the USA and a Notary Public in Mexico. Here's an overview:
© 2023 MLS and FBS. Prepared by Kali Tovar.
Information is deemed to be reliable, but is not guaranteed. The information has been made available by the MLS and may not be the listing of the provider.
Ancla #24, Marina Vallarta, Zip Code 48335.
Copyright © 2023 Kali Tovar - Todos los derechos reservados.
+52 322 229 1208 | firstname.lastname@example.org