Big Changes on the Horizon for Americans Buying Mexico Real Estate
On April 3 this year, the Parliamentary Group of the Institutional Revolutionary Party (PRI) and the Parliamentary Group of the National Action Party (PAN) submitted a bill proposing to amend section I of Article 27 of the Mexican Constitution to allow foreigners to own land.
Presently, Americans can own property in Mexico through a Fideicomiso or Bank Trust. Any foreigner can institute a Fideicomiso (the equivalent to an American beneficial trust) through a Mexican bank in order to purchase real estate anywhere in Mexico, including what is commonly called the Restricted Zone. To do so, the buyer requests a Mexican bank of his/her choice to act as a trustee on his/her behalf. This conveys the same bundle of rights that holding property “fee simple” does in the United States. You can will it, lease it, sell it, rent it and improve upon on it… It’s absolute. It’s irrevocable. It’s in perpetuity. And that is the definition of ownership. While this is a secure way to own land, there are changes on the horizon to make ownership even more simple.
This reform intends to allow foreigners to purchase properties directly, replacing the current structure which requires a trust agreement, regarding the land in the so-called “Restricted Zone”, which comprises a 100-km stretch along the borders, and a 50-km stretch along the beaches, providing that such land is given residential uses only. The purpose of this reform is to eliminate intermediaries and the participation of trustees in the process, thus reducing the costs of the transactions involved and giving legal certainty while encouraging foreign investments.
Read the rest at Virtual-Strategy Magazine
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