Bank Trusts in Mexico: What You Need to Know
Embarking on the journey of buying your home in paradise is exciting. Mexico has endless options for properties that can make your dream a reality. We are excited to help in that process and make it fun and easy. Home buying is simple in Mexico and we can not wait for you to start. It is often asked: Can foreigners buy property and own land in Mexico? Yes! The Mexican constitution states that no foreigner can have direct title to land that is located within 50km from the coast or within 100km from the border. If you are not a Mexican national and you wish to buy property in what is known as the “restricted zone”, you will need to establish a bank trust. For many years, only Mexican nationals were allowed directly own land in the restricted zone. That is no longer the case.
The situation has changed and the coastal and border areas that were once off-limits to foreign investors are now open thanks to a legal vehicle called a fideicomiso, or bank trust. We buy and sell homes every day. That means that we know how to navigate all the twists and turns. Through our experience, we have learned that savvy buyers make confident purchases. From our practical know-how, we want to share a few things to know about bank trusts in Mexico. Knowledge is key to purchasing real estate in Mexico and we make this process seamless.
A Mexican bank trust allows foreign investors to invest in Mexican Real Estate
Through the use of a bank trust, foreigners can exercise complete and legal control over their investments while complying with Mexico´s investment laws. Bank trusts are drawn up by a notary
Bank trusts are normally for a specified period and cannot exceed 50 years
Although the bank trust or fideicomiso is of limited duration for foreigners buying in Mexico, it can easily be renewed at the end of the 50-year term. It can also be transferred to another individual should you decide to sell to another foreigner. The bank trust can be extinguished entirely if you decide to sell to a Mexican national or if a foreign buyer would rather create a trust with a different bank. In the event of your death, the trust will be transferred to the beneficiary named in the bank trust.
The bank trust usually involves three parties: the trustor or settlor, the trustee, and the beneficiary
The trustor or settlor can either be an individual or a corporate entity. The trustor is the party that transfers the title or management of the property, as well as any rights or benefits to the trustee. Normally, the trustor is the current property owner. The trustee is the party that holds the assets in the trust. It has the responsibility of performing and complying with the specific purposes and goals of the trust. The trustee is generally a Mexican bank or a corporation that specializes in managing land assets in Mexico.
The beneficiary is the foreign individual or individuals that stand to benefit from the trust. They have special rights to the assets such as a security interest, receiving income from the assets, and the proceeds of a future sale.
When you are the beneficiary of a bank trust in Mexico,
you have the same rights to that property as you would if you had a direct title.
Under a bank trust or fideicomiso, you are free to build on your land. You can add to an existing structure and renovate or remodel it. You can also sell or lease the property.
The MexHome Motto
We want to help you and share our expertise. Whether you are a savvy investor or a first-time buyer doesn’t matter. If you’re a foreign buyer looking to invest in real estate in Mexico’s restricted zone, you need to understand how bank trusts (or fideicomisos) work. At MexHome, we are experts who want to guide you through buying. That means you get a real estate transaction that is a successful, smooth, and secure buying experience.
Our real estate agents know that this is a big step and a new and adventurous lifestyle. At MexHome, we are here every step of the way. and From beginning the property search to crossing the finish line with the keys in your hand, we do not stop. With the help of our partners, we can help you acquire financing for foreigners buying in Mexico and design services. Contact us today to see our real estate in Mexico!
