Owning a property

Por admin

Any foreigner may invest in property through a bank trust or fideicomiso, the equivalent of an American beneficial trust. To do this, the buyer requests a Mexican bank of their choice to act as the trustee on their behalf. The bank then obtains the permit from the Ministry of Foreign Affairs to acquire the property in trust. This trust is for 50 years and is automatically renewable for another 50 years. During this time, the buyer has all the rights of direct ownership, including selling, leasing, and developing the property.

In addition, it becomes part of the buyer’s estate and can be passed on to their heirs without inheritance tax. The trustee (bank) is responsible to the beneficiary (buyer) to ensure precise fulfillment of the trust according to Mexican law assuming full technical, legal and administrative supervision in order to protect the interests of the beneficiary.

Most real estate transactions are "opened" after a written purchase offer is accepted by the seller and when a purchase-sale agreement (promissory contract) is signed by both parties. In most cases, a deposit is required by the broker in order to transmit the offer to the seller. If the transaction is being conducted directly with the seller, it is highly recommended that a real estate broker or a lawyer be consulted before signing any papers or handing over any money.

In some areas it is common practice to deliver to the seller, as an advance payment, the equivalent to a 20-50% (including the initial deposit) of the total price upon signing the purchase-sale agreement which should contain a penalty clause applicable in case there is a breach of contract by any of the parties.

Normally, when signing the escritura or official deed, which needs to be certified by a Notario Publico or notary public, the balance is paid and the property is delivered. This should not take more than 45 days. In certain resort areas the custom of using "escrows" is being implemented.

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