Frequently Asked Questions
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Mexico is very protective of its land, and rightly so. Mexico has a long history of being dominated by foreign owners. This brief history of Mexico will show why Mexico
Frequently Asked Questions
Need Help? Contact Earl Miller - email@example.com
Mexico is very protective of its land, and rightly so. Mexico has a long history of being dominated by foreign owners. This brief history of Mexico will show why Mexico covets one of its greatest resources: its land.
As early as the 16th century, other countries were already trying to claim Mexico’s land as their own. In 1517, Hernandez de Cordoba sailed to the Yucatan Peninsula from Spain, and laid claim to Mexican lands. Mexico did not declare its independence from Spain until over 300 years later in 1822. Although they had independence, most Mexico land was still owned by the Mexican upper class, wealthy foreigners, or the Church.
After the Mexican Revolution, a new Federal Constitution was written in 1917. This new constitution regulated foreign ownership and ownership of lands by the Catholic Church. Article 27 of the constitution restricts foreigners from owning land within a “restricted zone” of 60 miles from the Mexican border or 30 miles from any Mexican coastline.
In the 1930’s, the Mexican people finally started to see their land being returned to them. Large property holdings were disassembled and redistributed in the form of cooperative farms or “Ejidos.” The people were given ownership of the Ejidos, and allowed to profit from farming and cultivating them. However, the government still owned the Ejidos.
Though the people were allowed to farm the properties and profit from their work, it was not until 1992 that they were allowed to sell the properties. The 1992 Agrarian Law recognized property rights within the Ejido and allowed for the owner of record to sell or lease the property to a non-Ejido member. The property can be removed from Federal Control and placed in the public land registry allowing it to be sold or leased. Today, thousands of acres are being removed on a daily basis from the Ejidos, added to the public lands and being sold or leased. There are well over 50 million acres of land that will go through this process to be either leased or sold over the coming years.
Yes. Americans and other foreigners may obtain direct ownership of property in the interior of Mexico. They can indirectly own property in the “restricted zone” through the use of real estate trusts called "Fideicomisos."
The “restricted zone” encompasses all land located within 100 kilometers (about 62 miles) of any Mexican border, and within 50 kilometers (about 31 miles) of any Mexican coastline. Article 27 of the Mexican Constitution prohibits direct ownership of real estate by foreigners in this area of land. Foreigners can now own land in the restricted zone through the use of a Fideicomiso however.
A Fideicomiso (FEE-DAY-E-CO-ME-SO) is a trust created to enable foreigners to enjoy unrestricted use of land located in the restricted zone without violating the law. It roughly translates to mean a real estate trust. It is similar to trusts set up in the United States, but a Mexican bank must be designated as the trustee and, as such, has title to the property and is the owner of record. Foreigners are set up as beneficiaries of the trusts.
As with all Real Estate, prices vary according to what kind of property you are buying, where the property is located, and which banks you go through. In general, it is a lot less expensive to buy property in Mexico than in the United States, and property taxes are very low.
Up until 1973, foreigners could not own land in Mexico within the “Restricted Zone.” This was dictated by article 27 of the Mexican Constitution which states that “in a zone of 100 km. (62 miles) along any border or 50 km. (31 miles) along the coast, foreign entities cannot acquire direct ownership of the land and waters.”
The Mexican government realized that foreign interest in Mexican land could potentially have a positive impact on the economy, and began to implement a series of Foreign Investment Laws in 1973. These were modified in 1989 and modified again in December of 1993 to incorporate the provisions of the NAFTA treaty.
Mexican law currently requires that in addition to obtaining a valid entry visa, foreigners wishing to acquire property for residential usage must have the title to their property transferred to a Mexican bank. In order to do this, the foreigner must establish a land trust (fideicomiso) in which they are the beneficiary. The bank has the responsibility of ensuring that all elements of the Trust are fulfilled.
While the bank owns the real property rights, the beneficiary (equitable owner) owns the personal rights to use, rent, modify or transfer his rights to a third party. These personal rights are evidenced through a deed prepared by a Mexican Notary, signed by the representative of the trustee bank and duly registered with the appropriate local authorities.
The Foreign Investment Law of 1993 stipulates a term of 50 years for the Trust with opportunity to renew the trust for multiple 50 year increments. By requesting renewals every 50 years a property may be held by a family or business entity in perpetuity. The filing for this renewal must take place on the forty ninth year and between the sixth and seventh month prior to expiration.
Since by law, Mexican banks enjoy government protection against bankruptcy, the Trust is indirectly guaranteed by the government. For this reason, even in unrestricted zones many foreigners prefer to hold their property in Trust.
A “notario” is a government appointed lawyer who ensures the proper transfer of all real estate transactions. The notario is responsible for registering the beneficiary’s deed transferring rights with the appropriate government agencies. If ownership of the property is ever disputed, this is the ultimate proof of ownership.
The purchase/sale document, likely contains a description of the property, price to be paid to the seller, and any special terms or conditions negotiated in the sales process. It does not provide valid notice to third parties unless it is recorded in the Public Registry office of the mu