Your Mexico Real Estate Connection
BUYINGREALESTATEINMEXICO
by Fabiola Thébaud - Kinder
AREYOUCONSIDERINGARETIREMENTORVACATIONHOME?
Commercial or non-residential property in the restricted zone
Mexico’s close proximity to the U.S. is a great benefit to the
can be purchased fee simple with 100% foreign capital as a
vacationer or retiree. The lower cost of living, availability of quali-
Mexican corporation, without the need for a Fideicomiso, but
ty resort homes at lower prices compared with the U.S., and top-
going through an application process through the Secretariat de
notch medical facilities make living in Mexico more attractive.
Relationes Exteriores.
There are many flights that can get you to destinations such as
Escrow arrangements in Mexico do not typically exist as in the
Cabo and Puerto Vallarta in less than two hours. Destinations such
US. Some American-based real estate companies work with a hybrid
as Manzanillo are attracting more flights. One can also find beau-
type of escrow, incorporating the closing customs of Mexico and
tiful resort property within a two-hour drive from San Diego.
California for U.S.-based buyers. Fabiola Thébaud-Kinder has close
W
working relationships with the most professional, bilingual notar-
HATTYPESOFOWNERSHIPCANAFOREIGNERHAVEINMEXICO, ANDWHAT
ios to better serve her clients.
ISTHEACQUISITIONPROCESS?
WHERECANWEFINDFINANCINGTOPURCHASEHOMESINMEXICO?
On the Mexican mainland, a foreigner can purchase property
fee simple(direct deed); except when the property is located in the
In Mexico most residential real estate is purchased on a cash
restricted zone: 50 kilometers (31 miles) from the shoreline or 100
basis. Financing of homes in Mexico has been customarily done
kilometers (62.5 miles) from the borders.
through a home equity loan on a U.S. buyer’s primary residence.
Residential properties located in all of the Baja Peninsula, and
Developers usually offer some type of financing and some will
coastal and border areas within the restricted zone, may only be
carry back a portion of the note. Mexican banks and finance com-
acquired through a Mexican Bank Trust called a Fideicomiso. The
panies have begun to offer loans to foreigners. U.S.-based mort-
bank, for an annual service fee of $300-$400, serves as a trustee,
gage companies are offering long term, fixed rate financing with as
which holds the legal title to the property for up to 50 years. The cost
little as 20-30% down.
for the permit to establish a bank trust is less than $1,000 USD. To
SHOULDWEBUYATITLEINSURANCEPOLICY?
purchase through a Fideicomiso, a foreigner must first register at Absolutely! Questions of title may be resolved through the title
the Secretariat de Relationes Exteriores for a permit to establish company rather than through the Mexican Courts. In the US things
the trust. Upon receipt of the permit, the trustee bank sends may go wrong with title, and in Mexico as well, so it is prudent to get
instructions to a Notario (a governor appointed attorney), who a title policy. The Title insurance policy issued for Mexico is 99%
prepares the deed (Escritura) to the beneficial rights. Applicable similar to an ALTA policy. There are differences in the law and the
taxes are paid (2% of purchase price), then the deed is recorded in language, i.e. there is no Spanish equivalent of “marketability.”
the local municipality. Ejido rights and agricultural reform have a part in the Mexican pol-
The foreigner, as a beneficiary of the Fideicomiso, has the right icy. In addition, in Mexico, mineral rights belong to the federal gov-
to use, improve, lease, sell, mortgage, and will the property. Should ernment, not to the owner of the land.
you die, your estate becomes the beneficiary. Also a second benefi- First American Title Corporation, Stewart Title, and
ciary to the trust can be named on a Fideicomiso to avoid probate. Fidelity National Title are a few US-based companies offering
Upon expiration, a Fideicomiso may be extended indefinitely in title policies in Mexico.
50-year periods when one pays the renewal fee. After 100 years, the
property remains yours, but a new trust must be created.
*The above is provided as general information. As laws are subject to change and not
all details can possibly be mentioned in this article, we recommend that you seek
legal and tax advice from a qualified professional.
Fabiola Thébaud - Kinder is a licensed real estate agent in Laguna Beach, California. With over 18 years management experience at several major international
hotel companies, her specialty is hospitality & resort real estate. If you are interested in learning more about real estate in Mexico, please contact Fabiola at
(949) 246-2327, or email:
fabkinder@gmail.comwww.fabulousresorts.com
68 BEST’S GOLF GUIDE TO MEXICO WWW.GOLFINMEXICO.NET
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