Despite its political uncertainties plaguing the country, Mexico’s economy is still growing steadily despite. All of this positives is significant to the already huge tourism sector keeps growing, thanks to Mexico’s attractive mix of white sand beaches, indigenous heritage, iconic cities and much more. As a result, many people are taking the opportunity as an advantage to make varied investments ranging from owing or starting up restaurants, hotels buying your own house to live in and why even retire in this beautiful Latin American country and why not even retire there.
With that said, But buying property in Mexico comes with certain restrictions and special requirements. Therefore, the priority is giving you an insight or better still an opportunity to sail through the process without any worries.
Buying Property in Mexico and the History Behind it
Buying a property in Mexico is not only limited to Mexican national as it was the case and backed by the Mexican constitution in 1917. This law was later modified in 1973 under the foreign investment law of which it was only in from this time that foreigners had the legal right to acquire property in this Latin American country.
Like any other law comes an exception and with this case, foreigners, are not allowed to own properties in restricted zones. That is 100 kilometers of foreign borders or within 50 kilometers of the sea, as an attempt to prevent foreign invasion. It should be worthy to note that, the implementation of this law prevented development in those zones.
Thereby making the law to be modified as well as, subsequently allowing foreigners to buy properties in the restricted areas only through a ‘Fideicomiso’ or trust agreement between the buyer and a Mexican Trust Bank.
Fideicomiso Trust and Buying Property in Mexico
In Mexico, only the Mexican trust banks are authorized to carry out the acquisition of properties located in restricted zones. They have as an obligation own the land and also have the ability to act on behalf of the foreign buyers. However, the buyer also has the right to either sell, lease, mortgage and of course entrust the property.
Coupled with the fact that the bank is the holder of the trust deed and is responsible to check if the property is free of liens or any claims to the property, it is possible to transfer the trust to another foreign buyer. The validity of this agreement or trust is good for 50 years, through which it can be renewed for another half a century (50 years).
Tendering a Bid to Buy Property in Mexico
In most countries, real estate transactions begin by accepting an offer from the buyer called a Purchase Offer. This offer is a contract detailing the terms of the purchase including a money deposit, the latest date for which the offer is to be accepted, the price and most especially payment plans. The moment the offer is accepted by the seller, they both (seller and buyer) sign a buying/selling agreement that obliges the buyer to make a deposit of 5-10% of the property’s value.
Closing Points to Buying Property in Mexico
Before the sale is closed, the seller has an obligation to pay the necessary taxes on the purchase. Thereafter, the property deed also has to be signed over to the buyer at the notary’s office. When all this is handled, the buyer then pays the sellers as well as the notary fees. The moment the entire purchase process is completed, the notary will then send a copy of the deed to the Public Registry of Property.
As the acquisition of a property is of public interest, it is registered at the Public Registry of Property to avoid any fraud or illegal possession of the property in the future. Once the final payment has been made and the deed closed, the title will be officially handed over to the new owner or the bank trust.