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FAQ's
I've always
heard that foreigners can't own
coastal property in Mexico, is that true?
No, while it
once was true, times have changed. Prior to 1973, foreigners were not
allowed to hold legal title or exercise direct rights to real property in
an area within 64 miles of Mexico's borders and 32 miles of its coasts.
But laws passed in 1973 and 1993 have made it possible for foreigners,
foreign firms and Mexican firms with foreign participation to acquire
interest in coastal real estate through a bank trust (Fideicomiso).
Who is
involved in this bank trust?
Three parties,
the seller of the property is the Trustor, the bank is the Trustee
(Fiduciario), and the buyer, or Beneficiary (Fideicomisario).
How does the
trust function?
Title of the
property is transferred to a trust with a Mexican bank acting as a
Trustee. The Trust Agreement is formalized by the issuance of a permit
from the Mexican Ministry of Foreign Affairs. The lot or home buyer is
designated as Beneficiary in the Trust and the beneficiary rights are
recorded in the public record by a Notary Public.
What are my
rights as a buyer?
The trust is a
legal substitute for fee simple ownership, but in this case, the Trustee
is the legal holder of the property. As a beneficiary, you have the right
to sell your property without restriction. You may also sell your rights
to a third party, or pass it on to named heirs.
Is the trust
renewable?
Yes. According
to the Foreign Investment Law passed in 1993, trusts can be renewed for an
indefinite number of successive 50 year periods. In effect they run in
perpetuity.
If at a later
date, I decide to sell my property
can anyone buy it?
Yes. If the
new buyer is also a foreigner, you simply assign your beneficial rights.
If the new buyer is a Mexican National, you can instruct the bank to
endorse the title in favor of the buyer.
If the buyer
is a foreigner, is his interest limited to the balance of my 50 years
trust?
No. Upon
application, a foreigner automatically can renew for an additional 50 year
permit. This, however, is not mandatory.
Do many
foreigners currently own coastal property in Mexico?
Yes. Today
thousands of foreigners enjoy coastal resort property and have benefited
from appreciation in these luxury and limited availability areas.
Contact
Marco Ehrenberg
for more information
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