FAQs (Frequently Asked Questions)...
Two important frequently asked questions:
1. Are foreigners allowed to own property in Mexico? YES!
2. Is investing in Mexico a good idea right now? YES!
- What is the process to purchase a home in Mexico?
- After deciding to purchase, this is what happens:
1. A notary public of your choice is retained.
2. The notary checks the Public Registry of Property decide if the property in question has any liens or encumbrances and the ownership of the property is in good legal standing.
3. Once the notary approves the deal; the deal application is forwarded to the Ministry of Foreign relations if the buyer is a foreigner.
4. Once the Ministry of Foreign relations approves the deal, the sale takes proper effect.
- What are the qualifications that Article Twenty Seven of the Mexican constitution requires of foreigners to get to buy land in Mexico?
- The foreigners applying for permission to buy land in Mexico have to prove their immigrant status in Mexico. Foreigners may not buy land directly. They can buy land through a trust with a Mexican bank. The foreigner residing in Mexico can acquire directly the property as long as it is not within 30 km from seashores or within 60 km from the borders of Mexico.
- If a purchase is in the restricted zone, how does that work?
- A foreigner cannot hold direct ownership of Mexican property inside the restricted zone as the Mexican Constitution forbids it. You can purchase property in tourist areas and on the coast through a Mexican bank trust.
In this type of purchase, the trustee can be a Mexican bank or the developer of the real estate. The beneficiary is the owner of the property after the close of the deal. The owner has all the rights to use, enjoy and sell the property. The trust is established for fifty years and can be extended for one additional period of thirty year.
- How is a trust set up?
- The trust agreement is drawn up before a notary public. The trustee then has to request authorization to the Ministry of Foreign Affairs and the Commission on Foreign Investments. Their approvals are mandatory to authenticate the transaction. The participants in the transaction are the seller, the bank as trustee and the buyer or beneficiary or a representative of beneficiary. The seller must have clear title to property. The notary checks for the dues if remaining on the property.
- What are the costs associated with a bank trust?
- Common expenses are:
1. The authorization from the Ministry of Foreign Affairs
2. The registration in the Registry of Foreign Investments
3. The fees of the notary public.
4. The bank charges for drawing up of the agreement. (Normally 1% of transaction amount)
5. The yearly fee charged by the bank for its services as trustee (Normally 1% of the property value)
Over all, the total expense for the transaction approximately falls around 12% to 14% percent of the transaction amount while closing the deal.
- Can a foreigner sell the property after some years?
- As long as you bought the property legally, you can sell it. Most property in the Pacific coast of Mexico increase significantly in value over time.
- Can the foreigner rent or sublet properties acquired through trust?
- Yes, this may be done keeping the rent for periods not exceeding ten years.
- What if the beneficiary dies?
- Whoever was named during the original transaction will have the same rights as the owner in the case the original beneficiary dies.
- What are the responsibilities of the beneficiary?
- The beneficiary is liable to pay the annual service fee charged by the trust. Also, the beneficiary must pay property taxes, water, and other utility bills.
- Can foreign investors come to Mexico and buy an established industry?
- The foreigners may 49% of that corporation without permit.