Foreigners Owning Property

Investing in Mexico has proved to be a profitable venture for many people. Most real estate has more than doubled in value over the past five years, and with Mexico's strong economy, the market will undoubtedly continue to rapidly climb. Owning property in a tropical, tourist destination has obvious personal rewards but it can also be a lucrative, moneymaking investment as well.

Safe Investing in Mexico

The Mexico Federal Constitution of 1917 was created to protect Mexicans from having wealthy investors buy up all the desirable land (coastal areas and near the border). In 1994, the Constitution was amended created what is called the "Fideocomiso". Owning property in Mexico is easier then most people think. There are two ways foreigners may purchase land or hold land titles. The first is called a "Fideocomiso". Today, foreigners may own coastal or border property but it must be done through a Fideocomiso. Essentially, the Fideocomiso is a Bank Trust. This is not a lease. The land is put into a trust issued by the Mexican Federal Government. The trust owns the land, and you own the trust. The bank has no ownership rights to the trust and cannot "take it back" from you. The bank simply administers the trust on your behalf for a yearly administration fee. Trusts are typically issued for a 50-year duration period with the right to renew following the expiration date. Property held within a "fideocomiso" allows owners to designate beneficiaries so that if there is a death, the property passes smoothly to the beneficiaries without probate of a trust. To make a change in the Bank Trust, simply identify the change in writing and instruct the bank to make the necessary change. There is an annual charge for maintaining the trust, which runs around $400 usd per year, depending on the bank you are using and there is a small charge for any change you might make in the Bank Trust.

The second route for foreigners is through a corporation. In Mexico, a corporation may own beachfront, border or other property without restriction, as long as the property is not solely for personal use. A good example of these opportunities are villas, apartments, restaurants, malls or other commercial buildings and of course, resorts and hotels. If you own numerous investment property's recommendation would to own the properties through a corporation for tax purposes. Cost for a Mexico Corporation is approximately $2500 usd depending on the lawyer you chose to set it up.