by Daniel Duran 
12 Common Questions About Buying Real Estate in Mexico’s Restricted Zone
Buying real estate in Mexico, especially within the restricted zone, can be a complex process for foreigners. The restricted zone is defined as the land within 100 kilometers of Mexico’s international borders and within 50 kilometers of the Mexican coastline.
Due to constitutional restrictions, foreigners are unable to hold direct title to land within this area. However, there are legal frameworks in place that allow foreign investment through mechanisms such as the fideicomiso (bank trust) or by establishing a Mexican corporation. Here are 12 common questions and answers to help clarify the process:
1. What is the Restricted Zone in Mexico?
The Restricted Zone refers to the area extending 100 kilometers from any international border and 50 kilometers from any coastline, where foreign direct ownership of land is constitutionally restricted.
2. Can foreigners own property in the Restricted Zone?
Yes, through a fideicomiso or by setting up a Mexican corporation, foreigners can enjoy the benefits of property ownership in these areas.
3. What is a fideicomiso?
A fideicomiso is a bank trust that allows foreigners to indirectly own property in the Restricted Zone. The Mexican bank holds the legal title, while the buyer retains all usage rights.
4. How long does a fideicomiso last?
The trust agreement is typically renewable every 50 years, providing long-term security for the property owner.
5. What are the requirements for establishing a fideicomiso?
Requirements include submitting an application to an authorized Mexican bank, drafting a trust agreement, obtaining necessary permits, and paying trust fees.
6. Can I directly own property in the Restricted Zone without a fideicomiso?
Direct ownership by foreigners is not allowed in the Restricted Zone, but setting up a Mexican corporation is an alternative method for property acquisition.
7. What are the benefits of setting up a Mexican corporation for property ownership?
A Mexican corporation provides a way for foreigners to own property and is especially useful for business purposes or when owning multiple properties.
8. Are there restrictions on the type of property a foreigner can buy in Mexico?
There are no restrictions on the type of property; however, due diligence is crucial to ensure the property is not ejidal land, which cannot be owned by foreigners.
9. What is the role of real estate agents and lawyers in the buying process?
They provide guidance, ensure proper due diligence, and help navigate the legal requirements of property transactions in Mexico.
10. What are the post-purchase costs and legal requirements?
These include property taxes, maintenance costs, and ensuring compliance with Mexican laws regarding property ownership.
11. Is it safe for foreigners to buy property in Mexico?
With proper legal guidance and due diligence, buying property in Mexico can be a secure investment, and title insurance is available from major US companies.
12. How can I ensure my property purchase is secure?
Work with reputable real estate professionals, conduct thorough title checks, and consider title insurance to protect your investment.
Understanding these aspects of buying property in Mexico’s restricted zone can help potential buyers navigate the process with confidence.
It’s always recommended to seek professional advice and conduct thorough research before making any real estate investment in Mexico.
For more detailed information, you can refer to the comprehensive guides provided by our office.