Bank Trust


Yes! You can own property in Mexico, and we are here to help you make the process easy and understandable. We will accompany you step-by-step and introduce you to all the people and resources.

Restricted Zone
In the interior of
Mexico, you can buy property “fee simple” in your own name, just as you would in the United States or Canada. But Mexican law has special exceptions governing property within 31 miles of the coast and within 62 miles of the border, an area known as the Restricted Zone. Most of the properties shown on this site are located within this zone.

Fideicomiso:
 After 1970, the Mexican government passed laws to permit foreigners, as private individuals, to buy property in the Restricted Zone through a bank trust or fideicomiso.
This trust, initially established for a 50 year term and renewable for an additional 50, grants you, the beneficiary, every right of ownership. You may use, modify, rent or sell the property. In the event of your death, the property passes to the beneficiary you have named without the necessity for probate. The current cost of establishing a trust is about $3,000 USD, and the annual maintenance fee charged after the second year is currently about $500 USD. plus 10% IVA tax. The inital charge of $3,000 dollars covers the Bank fees, bank set-up fee and TWO YEAR'S management fee. Your next fideicomiso payment will be due two years from your closing date. Charges vary from bank to bank, and the annual maintenance fee depends on the value of the property.


Mexican Corporations and Visas
If you intend to use the property for business, it is easy to form a Mexican Corporation. The property may be purchased by the corporation and 100% owned. Costs of forming a corporation vary from $1,800 to $3,000 USD. The Mexican government currently requires monthly tax filings, It is also important that the principal officers of the corporation apply for and obtain FM3 Visas from the Department of Immigration. This process is not difficult -we recommend legal assistance. A Mexican Corporation is a tool of choice, other wise, residential properties are established under a bank trust.

Financing: Currently bank financing is not available for foreigner investors.

Inspections and Repairs
Here in
Mexico, properties are sold "As is, where is". Sellers will generally not agree to make repairs. There are no inspection companies in Mexico as there are in the US, nor are there any required disclosures on the part of the Seller. In general, as the property foundations sit on solid limestone and there are no earthquakes in this region, any defect with a property will be immediately apparent. Roofs are generally of cement, and again, leaks will be apparent.

Closing:

Retain Legal counsel: At this point, a buyer may elect to have professional counsel to prepare a Purchase Sales Agreement, and/or to administer the closing process with the Notary Public. In Mexico, normal practice is for your real estate attorney to prepare a contract (Promesa de Venta) which is signed by you and the seller, detailing the specifics of the transaction. This is done after y and after verifying that there are no existing liens or other title problems making the property unsaleable. At this stage, an agreed amount is paid directly to the seller to secure the sale. If you will not be in Mexico and wish us to represent you in signing legal documents, both Promesa de Venta and or Closing, you should leave a limited special Power of Attorney allowing the person you trust  to do this. The cost of having this prepared is between $280 and $400, and it can save you a great deal of time and stress.

The final sales agreement will be executed by a Notario Publico, a respected attorney with special government recognition to act in real estate transactions. It is the Notario’s responsibility to review the deeds and title to the property, ensure that there are no existing liens, assist the bank in the creation of your Trust, and then to formalize the final contract of sale, draft the new deed, collect and pay appropriate taxes and record the property transfer as required by law.

It is customary in
Mexico for most of the closing costs to be paid by the Buyer. Costs will be based on the appraised value of the property which may be lower than the actual sales price. There is a 2% transfer tax plus attorney’s fees which will generally amount to 2-3% of the appraised value of the property. In addition, you must consider the cost of forming your Trust or Corporation.

Real estate commissions are generally paid by the Seller, in most cases fees are set at 7% of the sales price.
It can take up to 8-10 weks to form a corporation and close a transaction. Formation of a fideicomiso usually takes around 6 to 8 weeks, as a permit must be obtained. If the property is already in an existing bank trust, this process can be expedited and costs less - around $1,800 to substitute your name on Bank documents against $3,000 to form a new trust.