Purchasing Property in Mexico

There are three ways in which a person can legally own property in Mexico:

(1) Fidecomiso or Bank Trust

This is the most commonly used method for a person other than a Mexican citizen to purchase property in Mexico. It is established in areas that are within 50 kilometers of the ocean or 100 kilometers from any border. The Fidecomiso allows for ownership of property but with the exception that an accredited bank of Mexico holds the deed to the property. This does not prohibit the ability to sell, to will or to inherit the same property in subsequent years. The Fidecomiso can be viewed to be a manner in which the Mexican government is increasing the tax value on the lands within the above said area and not increasing the taxes to their Mexican citizens. In order to obtain a Fidecomiso it is necessary to go through a Public Notary who is a government appointed lawyer that will handle all the paperwork necessary.

(2) Corporation

Those who wish to rent, or reserve the right to potentially rent, their estate in the future may want to consider forming a corporation. Setting up a corporation is slightly more difficult than obtaining a Fidecomiso but it allows a property owner to hold the actual title to their property and viewed by the Mexican Government as they would any other Mexican corporation. First the corporation must be formed in order for the corporation to purchase the property rather than an individual. The corporation is very similar to that in the United States where shares are issued to 1 or more partners. In order to form the corporation a General Manager, or Administrador Unico, must be named. That person must either be a Mexican citizen or have an FM3, which is essentially a work visa issued by the government of Mexico. The general manager then has the ability to perform all duties of the corporation but does NOT have the right to sell any property. They will, however, have access to any accounts assigned to the corporation. It is recommended that two or more bank accounts be established where monies can be transferred from one account to the other and the general manager have access to only one account with limited funds. Either an attorney, accountant or if you prefer, a representative of Baja Mexia Properties can act as your General Manager. Another difference with a Mexican corporation is that taxes are due every 30 days as apposed to quarterly. Obviously if revenue is not generated taxes will not be due but a report must be filed. Possibly revenue is not something that is expected to be generated in the near future. One solution is to make the corporation dormant. By doing so will prevent monthly reports but year ending reports and property taxes will still be due.

(3) Resident or Citizen of Mexico

Like in the Untied States or other counties citizens of said country can buy lands for residential or commercial use.

The above content is a brief description of how property in Mexico is purchased. Although it is a little more complicated this will get you started on understanding the possibilities that are available to you as a potential buyer.