The Mexico Bank Trust for Ownership of Real Property

Article 27 of the Constitution of the Republic of Mexico prohibits foreign ownership of real property located within 30 miles of any coastline or 60 miles of either border This is referred to as the Mexico restricted zone

Owning within the Mexico Restricted Zone

In 1973, recognizing that many Americans would enjoy the rights of ownership, and bring needed dollars to the country, President Echeverria approved the bank trust, Mexico fideicomiso, form of ownership which is available to non-Mexicans This regulation was further expanded in the Foreign Investment Law of 1989.

Mexico Properties located within the restricted zone, which includes the entire Baja Peninsula, may be acquired by a foreigner through a Mexican bank trust naming the buyer of the property as the beneficiary of the trust Naked title is placed in the name of the bank selected by the buyer, as his trustee The bank administers the property according to the instructions of the buyer/beneficiary The buyer/beneficiary has full ownership rights: he may build on the property, tear down existing buildings, modify them, rent, lease or sell at anytime conforming only to the general laws of the country established for all persons

Term of a Mexico Bank Trust

The term of the trust is fifty years and can be renewed for additional fifty year periods, after which it must be transferred to “one entitled to hold property” in Mexico In other words, title to the property may rest in one beneficiary indefinitely, provided that it is renewed within the terms established by the law

Procedure and Costs

The procedure for establishing the fideicomiso, the bank trust, is as follows: a permit must be obtained from the Secretary of Foreign Relations which includes a description of the property to be placed in trust, the use for which it is intended, and personal data on each of the beneficiaries Once granted the bank draws up the trust document which is recorded in the municipality where the property is located.

The costs for the permit to establish and register the trust are currently about $1,700 US and Mexico bank trust annual fees are generally $400.00 to $700.00 per annum there are additional closing costs in Mexico, however, an it is wise to request a written estimate prior to beginning the transfer process.

* The costs mentioned above may require updating given the date of writing of this article

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546 www.TOPmexicorealestate.com

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