5 August 2018
Buying real estate in Mexico is a profitable and promising investment. You can purchase housing both for yourself and in order to rent it out in the future. Low taxes (real estate tax in Mexico 0.1% per year), ease of "communicating with the tax office", high profitability (from 5 to 18% per annum), a favorable location in a resort area where there is a constant demand for housing and a favorable climate all year round for relaxation - these are all good reasons to invest money correctly. Plus, add to this the stable growth of the economy, as a result of which in the future, real estate prices will begin to grow exponentially, and the question of the expediency of this purchase will disappear by itself.
So, you have finally weighed all the pros and cons and decided to buy property in Mexico. The next thing you should know is that due to certain historical events, since 1917, foreigners are prohibited from buying real estate and land in Mexico in the so-called "Restricted Zone". These are territories located within 50 km from the coast and the island, as well as within 100 km from the state border. However, this policy has done a disservice to the region's economy. Therefore, in order to attract foreign capital, laws were passed, thanks to which foreign buyers were able to circumvent constitutional restrictions. And now there are two possibilities for non-residents of the country to purchase real estate in Mexico: through a bank trust (fideicomiso) and through a corporation.
aMethod number 1 - Bank Trust
Fideicomiso is a bank trust where the Mexican bank acts as the trustee and the foreign buyer as the beneficiary. In fact, the bank is the owner of the real estate, but the beneficiary retains all the legal rights of the owner, therefore, he can sell, rent or bequeath his property.
Protecting your interests in the event of a bank bankruptcy.
Do not be alarmed, according to Mexican law, your property will not be a bank asset. In case of problems with the bank, your documents will be reissued through another bank. This procedure is guaranteed by the Mexican government.
The advantage of this option is that the bank itself checks whether this property is "problematic". The agreement with the trust is concluded for a period of 50 years with subsequent re-signature to a similar term. For the services of the bank, a penalty is charged annually depending on the value of the property, on average it is about USD 500.00 per year. Also, the advantages of a "bank trust" are the speed of registration and the ability to buy real estate remotely.
Among the disadvantages of a trust is the impossibility to purchase several objects (when buying the next house, the buyer will have to conclude a new agreement with the bank) or buy housing with an area of more than 2000 square meters.
Option number 2 - Purchase for a Mexican company
Mexican corporations also have the right to acquire property in the Restricted Zone, while their owners can be citizens of any country in the world, but the corporations themselves are considered Mexican legal entities.
To create a corporation, at least two shareholders are required, and it is not necessary to be Mexicans, one of whom receives a guaranteed right to live and work in Mexico. The Corporation submits monthly reports to the Treasury. For a Mexican corporation, you can purchase several real estate objects without restrictions on the area, but physically it requires more time and effort. Therefore, the first method, a bank trust, is more popular with foreign buyers. The cost of preparing statutory documents and registering a legal entity - a company in Mexico, is $ 2,000.00. USA. Monthly accounting services for the company from $ 100.00 USA and depends on the amount of real estate registered to the company.
In both cases, all documents are carefully checked and the buyer will be 100% protected from all types of fraudsters, as well as unscrupulous sellers.
