Foreign ownership of properties in Mexico can be done by trust or direct deed

TRUST:

If the property is located within the restricted zone of 50 Km (30 Miles) from the coast line or 100 Km (60 Mile) from the border, then you have no choice but to acquire the property through a Trust. Many foreigners and even Mexican nationals prefer the ownership through a Trust even if it were not required because of the flexibility afforded by this mechanism.

The procedure is relatively simple whereby an approved bank holds the title to the property with you, or anyone you name, as beneficiary. The advantage of this mechanism is the flexibility of changing beneficiaries especially in cases of second marriages and ownerships through a foreign corporation with shares owned by varying shareholders.

EXAMPLE FLOWCHART OF A TYPICAL TRUST

DIRECT DEED:

This is the traditional mechanism of property ownership. Anywhere in Mexico outside the restricted zone, permanent residents or foreigners on temporary visas can own property with no restrictions. Foreigners are only required to "advise" the Department of External Affairs of the property acquisition .

The reason for the restricted zone which was defined in the Mexican constitutional amendment of 1917,was to alley the ears of Mexican against foreigners carving out more of the land in the wake of the border disputes with the United States.

The various administrations have since enacted new measures to make it easier for foreigners to own property. From no ownership to ownership through trust. The trust term was stretched from a mere five years to 5o years now. While understanding the sensitivity of this political issue, it appears that it is a matter of time before this restriction is totally abolished.

CONCLUSION/TIPS:

TIP #1:When to use a Trust:

1-in case of a couple on their second or subsequent marriage who wish to name several beneficiaries on both sides.

2-ownership of a property away from where you can use and check on it. Undeveloped land out of town, or a house with infrequent use.

3-several persons with several beneficiaries at various proportions who wish to own one property. In this case it is recommended that a foreign corporation is formed in the country of the group. That way the shares can be proportioned and changed in your country in a simple manner with an advisement to the Trustee through a letter.

It is interesting to know that the requirement to "advise" External Affairs only appeared in the official gazette in March 1998 and was enacted shortly after. They call it an advisement but it is actually a permit because it costs time and money and you can not proceed without it.

TIP#2:

Please make sure you listen to your professional real estate agent and take his recommendations when it comes to hiring a notary for the closing. Not all notaries are as knowledgeable or as efficient in getting you a clean title.

TIP#3:

According to the Mexican Labor law, if the owner of the property selling out did not pay termination and compensation to the gardeners or cleaning lady, then the new owner is responsible to either keep the employment of the staff or pay their severance.

VALUE BOOSTER:

You may not know it, but many houses can have their value improved (for sale or rent) with a little make over.

Our homes are like our children to us,we get attached to them with time.Many time we may not realize their potential until an expert walks in to point out certain hidden talents waiting to be explored.Some times we may think they have certain capabilities but find out that there are non.

We at Descon have the expertise to review your property and make suggestions. Our Interior designer may suggest some furniture movements or accessorizing what is already there.Some times we need to remodel or add on.Our engineers can review your house structure and point out the limitations. We have the people and the experience to recommend and do whatever it takes to improve the value of your property.

Contact us for a free-no obligation consultation.