| Buying
Property in Mexico
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here for a complete listing of our properties
Your
needs as a foreign owner/investor are different.
Because of this, we provide you with a turnkey purchasing solution that
takes all the hassle out of buying properties in Mexico. When we quote
you a seller's asking price, that is all you will pay. There are no hidden
costs. All closing costs, legal costs, and filing fees, etc., are paid
by the seller. We coordinate all the transactions for you so that you
do not have to worry about the process. All you have to do is buy a beach
towel and enjoy the beach!
History
of property ownership rights
In 1917,
a new Constitution was drafted. There was a provision that created what
is called the Restricted Zone. The Zone is 100 km (62 miles) from the
borders and 50 km (or 31 miles) from the coasts. In this Restricted Zone,
only Mexicans could own the land. This was done for their own protection,
and at the time, it made sense.
However, in
the 70's Mexico realized it was losing a lot of foreign investment.
So in 1970, a Bill was passed, which created a legal loophole. This Bill
stated that a trust, called a 'Fidecomiso' could be set up, with a foreigner
as the beneficiary. Since a Mexican bank is the trustee and administers
this trust, it satisfies the prohibition against a foreigner owning land
in the restricted zone. Because of the 1970 Bill, major foreign investment
flowed into Mexico and we saw not only Cancun, but also Cozumel, Acapulco,
Puerto Vallarta, Ixtapa, etc. take off.
There
are however, limitations to the Trust system. For each additional
property you purchase, you need a separate trust. The cost for each trust
or Fidecomiso (the Spanish word for Trust) is about 1% to 1.5% to set
up (that percentage based on the purchase price of the land). In addition,
there is an annual "administration" fee to the Bank of $600-700,
for doing nothing more than holding the deed on your behalf as your trustee.
In 1994 new legislation
was passed, applying to Restricted Zone property. Under this new law a
Mexican Corporation, owned by foreigners could be set up to hold title
to the property. Now you can own your corporation and hold all the papers
to it. This means you and not your trustee gets to possess the deed.
Also,
there are no annual fees to the bank
and your corporation can own more than one property (you do not need to
form a new corporation for each property). If you want to sell your property
you can either sell the corporation or sell a property from it. Also,
you are permitted to file a dormancy election, which means your company
is "asleep" until you decide to activate it.
The government has made it very easy for foreigners
to own land in Mexico. So much so that in 1998, revenues from the
industry of foreign investment & tourism surpassed the revenues from
the oil & gas industry. The Mexican government welcomes your participation.
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