Owning Property in Mexico
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Seawall Construction at
Villas Sirenas |
Yes!
You can own real estate in Mexico. Through a trust
managed by a bank, foreign individuals and corporations
are permitted to own property in Mexico. The real estate
property must be located within a range of 100
kilometers
of the borders of Mexico and within a range of 50
kilometers from coastal areas. Villas Sirenas fits
within these parameters. Trusts are legally established
by the Mexican Foreign Investment Law, Title Second,
Chapter II, Articles 11 to 14, Fifth Transitory. In the
arrangement, a Mexican bank (the fiduciary) will have
ownership of the real estate, subject to the direction
of the foreign buyer (the beneficiary of the trust). The
foreign buyer has the
right to use the property, rent the property, sell the
property, or in case of death, transfer the property to
designated heirs. All proceeds belong to the beneficiary
of the trust subject to paying all appropriate taxes.
Basic principles of property ownership in Mexico.
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A foreigner may acquire rights over
real estate in Mexican coastal and border zones
through a trust, which
is a legal instrument similar to those in the United
States.
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Through a trust, real estate is
administered by a qualified and licensed bank on
behalf of the beneficiary of the trust (the owner).
The legal effect of the trust allows the fiduciary
to act as the owner of the real estate, and thus,
the trust complies with Mexican laws.
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The beneficiary has the right to the
full use, enjoyment and profit from the real estate.
The beneficiary can
rent the property, borrow against the property, and
sell the property.
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Mexican law provides that the
original trust term of 50 years may be renewed for
additional 50-year periods upon written request by
the beneficiary of the trust.
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When the beneficiary desires, the
property may be sold outright or sold subject to an
assumption of the existing trust.
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10-Step Villas Sirenas Buying Process. |
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Step 1 |
Buyer and seller agree
on the Unit price. |
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Step 2 |
Buyer and seller
execute a Reservation Form (if applicable). |
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Step 3 |
Buyer and seller
execute a Promise of Trust Agreement (The
Agreement). |
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Step 4 |
Seller constructs
condominium building and associated Unit. |
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Step 5 |
Buyer acquires title
insurance, if desired. |
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Step 6 |
Buyer and seller
contact a fiduciary institution (i.e., a
Mexican bank) to prepare for execution of
Trust Agreement. |
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Step 7 |
Buyer and seller
identify:
- Beneficiary — Buyer’s name and a
substitute beneficiary
- Current citizenship
- Immigration status of the
beneficiaries in Mexico.
- Copy of deed of title accompanied by
a drawing indicating the exact
measurement of boundaries and surface
area
- A statement indicating the agreed
transaction price and form of payment
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Step 8 |
Fiduciary institution
will apply to Foreign Relations Ministry for
the authorization required for the Trust
Agreement. |
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Step 9 |
Upon receiving the
authorization in Step 8, the fiduciary
institution will arrange to execute the
Trust Agreement deed before a Notary Public. |
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Step 10 |
The Notary Public
registers the Trust Agreement deed in the
Public Registry of Commerce and Property. |
NOTE: While this document is meant to
help non-Mexican buyers better understand how real
estate works in Mexico, it is not a legal opinion,
nor is it intended as a substitute for potential
buyers’ own due diligence. As with all business
dealings it is highly recommended that those seeking
to purchase real estate in Mexico deal only with
established, reputable companies, such as the San
Carlos Development Group, LLC, or developers of
Villas Sirenas, S.A. de C.V.
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