Owning Property in Mexico with a Fideicomiso
Owning property in Mexico is an attractive option for many foreigners due to its stunning landscapes, vibrant culture, and promising investment opportunities. However, for non-Mexican citizens to legally own property within 250 km of the coastline, they must use a fideicomiso. This trust arrangement allows for secure ownership while complying with the country’s constitution.
Working with an umbrella operating company relieves homeowners of the bureaucratic burden. These companies ensure compliance with all local regulations and legal requirements, alleviating the burden of maintaining an independent fiscal identity.
The Fideicomiso Process
A fideicomiso is a trust agreement where a Mexican bank holds the title to the property on behalf of the buyer, who retains all rights to use and enjoy the property. This setup provides a legal framework that protects the interests of both the buyer and the nation. Here’s a closer look at the steps involved in setting up a fideicomiso:
- Choosing a Bank: Select a reputable Mexican bank to act as the trustee. The bank will hold the title to the property, but you, as the beneficiary, will have all the rights to use, lease, or sell it.
- Documentation Submission: Provide the necessary personal documentation to the bank, which typically includes your passport, visa, and proof of address. The bank will also require property details, such as the sales agreement and existing property records.
- Property Verification: The bank will verify the property details through the cadastre (catastro), a registry that records property boundaries, value, and ownership. This step ensures that the property is accurately documented and that no legal disputes or encumbrances exist.
- Agreement Drafting: The bank drafts the fideicomiso agreement, outlining the terms of the trust. Both the buyer and the bank review and sign this document.
- Legal Procedures and Fees: The bank handles the necessary legal procedures to formalize the trust. This includes paying annual fees for maintaining the fideicomiso and municipal taxes (predial) based on the property’s value and location.
Required Documentation and Fees
Setting up a fideicomiso requires thorough documentation and adherence to legal obligations. Here’s a breakdown of what you need:
- Personal Documentation: Passport, visa, proof of address
- Property Details: Sales agreement, property records
- Bank Fees: Annual fees for trust maintenance
- Municipal Taxes: Predial tax based on property value
Insider Tip
If you plan to rent out your property, inform the bank during the fideicomiso setup. Establishing the trust for commercial use from the beginning saves time and avoids the hassle of modifying the trust later. Rental properties require additional licenses, so getting this right initially is crucial.
Why Choose a Fideicomiso?
A fideicomiso offers several benefits for non-Mexican property owners:
- Legal Security: Provides a clear legal framework for foreign ownership.
- Full Rights: Owners can use, lease, or sell the property.
- Protection: The property is protected under Mexican law, safeguarding the owner’s rights.
Owning property in Mexico as a non-Mexican citizen is entirely feasible with a fideicomiso. This trust arrangement not only ensures compliance with Mexican laws but also provides peace of mind and security for your investment. By understanding the fideicomiso process and preparing the necessary documentation, you can enjoy the benefits of owning a piece of Mexico’s stunning landscape.
Learn More
If you would like more detailed information and assistance with purchasing property and setting up a fideicomiso, please get in touch with hola@akumalmx.com. Our team is here to connect you with the right professionals to guide you through each process step, ensuring a smooth and successful property acquisition.