Mexico stands out as a top destination for foreign real estate investors and retirees, thanks to its exceptional quality of life, affordable cost of living in comparison to countries like the United States and Canada, breathtaking beaches, and warm and accommodating locals.
If you are considering purchasing property in Mexico as a foreigner, you will likely encounter the term "fideicomiso". Do not be alarmed, as it is easier than it may seem. In reality, obtaining a fideicomiso is a straightforward process. In this article, we will outline all the essential information you need to be aware of when buying a villa or condo on one of Mexico's stunning coastlines.
What is a Fideicomiso?
A fideicomiso is a type of trust, which is established by a Mexican bank and allows foreigners to purchase property within the restricted zone, which includes any land within 50 kilometers (31 miles) of the coast and 100 kilometers (62 miles) of any of the Mexican borders.
The bank acts as trustee and intermediary between the buyer and the seller of the property. This allows expats to buy homes located in the restricted zone.
The trust is renewable every 50 years. The bank retains ownership of the property, but you, as the buyer, are designated as the primary beneficiary and can use or modify it as needed. Additionally, you can rent or sell it. In short, you can make use of the property as you wish!
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How Does a Bank Trust Work?
In a bank trust arrangement, a Mexican bank acts as the trustee. Within this framework, the bank acquires the property on your behalf, creating a fiduciary relationship with you as the beneficiary. This guarantees that the bank is committed to consistently placing your best interests at the forefront.
Itās important to note that bank trusts arenāt assets that are recorded on the bank's books, and banks cannot take any action without receiving written instructions from the beneficiary of the trust. If the bank fails, the trust is easily transferred to another bank, so thereās no risk posed to you.
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What are the Pros of Using a Trust?
Some of the benefits that come when using a fideicomiso to buy a property in Mexico include:
It allows expats to buy properties within 50kmās of the coastline which is considered the restricted zone for foreign purchases. A fideicomiso allows the foreign owner to enjoy living close to our coastline in the most incredible ocean front destinations.Ā
It gives foreigners the same rights as Mexican citizens when it comes to owning property. You can buy, sell, rent, or modify it.
In the case of your passing, you can designate the rights to pass on to whomever you choose.
It is renewable every 50 years.
Makes it easier to sell to another foreign buyer if you choose to do so, simply by going through a name-changing process in the trust.
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Are There Any Cons to Using a Trust?
There are not really inconveniences, but rather aspects that you should keep in mind:
Thereās a fee that you must cover to establish a trust, which will be completed by the notary at the close of sale. The amount can vary but is approximately 1500.00 yearly.
Finally, it is important to remember that you as owner of fidecomiso are titled on the deed which is held in trust by the associated bank. Often HSBC, Santander and major Mxn banks.
Are You Ready to Buy your Next Beach House?
Bitcasahomes specializes in real estate in Mexico and offers luxury developments in the top beach destinations like Tulum, Playa Del Carmen, Yucatan, Merida, Puerto Morelos, and more.
Our agents are prepared to assist you in finding the ideal property based on your requirements, preferences, and budget, and will support you throughout the entire purchasing process.
Reach out to us, we are eager to meet you and assist you in making the finest real estate investment in Mexico!
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