Las Palmas - Bucerias Vacation Rentals

Real Estate

The Mexican Land Trust
FIDEICOMISO

For those interested in purchasing real estate in Mexico, they will most likely be doing so through a fideicomiso. These are trusts issued to bank on behalf of foreign individuals or foreign-owned corporations by the ministry of Foreign Relations for properties within 60 miles of the border or 30 miles of any Mexican coastline, which would of course include Puerto Vallarta. The fideicomiso was established to circumvent the requirements stipulated in Article 27 of the Constitution, which precludes foreigners from owning property within these two zones.

Through the means of a fideicomiso, foreigners can legally enjoy, develop, use and sell the property as they actually did have title. Forming a trust of which you are the beneficiary does this. The title for the property is placed within the trust and held by a Mexican bank on your behalf. It's about as good as it can get to actually having title in your hands, and for all practical purposes it functions in exactly the same manner.

Your trust has a term for up to 50 years at which time the trust is simply renewed. The bank takes care or the trust for you charging a nominal fee to set up the trust account; another annual fee to maintain it and renew it at the end of your term. The procedure is very straightforward; Mexican notaries, lawyers and real estate agents are very familiar with how it works and the system has worked very well to grant some form of legal recognition of ownership without having to change Mexico’s Constitution. Although there has been discussion that this could change, now that we have NAFTA it does not seem to be something that will happen in the near future In the meantime, the trust system is functioning very well for many foreigners in Mexico.

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