Within the last twenty years, buying real estate in Mexico has become a lucrative and viable investment strategy, bringing with it a new breed of sophisticated investor. U.S. Title Insurance, U.S. Third Party escrow and comprehensive title searches are the standard—promises and handshakes are not. To guide Purchasers through the sales process, Auberge Private Residences has selected Snell Real Estate, the premier real estate group in Los Cabos, to act as the sales representative for this exclusive offering. Click here to receive our Resort Book and find out how you can own one of our recently released homes.
Today there are established regulations for non-Mexicans owning land in Mexico, which makes the process of purchasing safe and easy. These rules are in place to protect both the Purchaser’s ownership rights and to promote real estate to foreign investors. The key to purchasing in Mexico is an established and perpetually renewable Mexican property trust called a Fideicomiso (fee-day-coe-me-so).
What is a Fideicomiso? (Mexican Property Trust)
Because the Mexican Constitution prohibits non-Mexicans from purchasing or owning real estate within 60 miles (100 kilometers) of the U.S. international border, or within 30 miles (50 kilometers) of the Mexican coast, an innovative and secure method of holding title was created. This method allows non-Mexicans ownership through a Mexican property trust called a Fideicomiso. This is a trust agreement, much like an estate trust in the U.S., which gives the Purchaser all rights of ownership.
To gain rights of ownership, the Department of Foreign Affairs in Mexico City issues a permit to the Mexican bank of the Purchaser’s choice, allowing the bank to act as Purchaser of the property. Essentially, the bank acts as the “Trustee” for the trust and the Purchaser is the “Beneficiary” of the trust. The trust is not an asset of the bank; banks simply act as the Trustee to hold the trust. Much like living wills or estate trusts in the U.S., the Mexican bank, or Trustee, takes instruction only from the Beneficiary of the trust (the Purchaser). The Beneficiary has the right to use, occupy, lease and possess the property, including the right to build on it or otherwise improve it. The Beneficiary may also sell the property by instructing the Trustee to transfer the rights to another qualified Purchaser, or bequeath the property to an Inheritor. The initial term of the trust is 50 years, however the trust can be renewed for additional periods of 50 years indefinitely, providing for long-term control of the asset.
The Purchaser holds the same rights as a property owner in the U.S. or Canada, including the right to enjoy, sell, rent, improve the property, etc. This is not to be confused with a land lease. The property purchased is placed in a trust with the Purchaser named as the Beneficiary of the trust — the Purchaser is not a lessee. If the property purchased is already held in a trust, the Purchaser has the option of assuming that trust, or having the property vested in a new trust.
How Long Does it Take to Establish a Trust?
Snell Real Estate partners with Federal and State notaries for all closings in order to secure your trust. A Notario Publico in Mexico is much different than a Notary Public in the U.S. In Mexico, Notarios are specialized attorneys who act on behalf of the state and federal government in relation to any transaction; they are comparable to a U.S. Clerk of Courts.
On average, Snell Real Estate can obtain your trust within 60-90 days. In some cases, title has been transferred in as little as two to three weeks. Overseeing the entire process and making certain you understand each and every step involved is Snell Real Estate's ultimate priority. Finacing is available by Finance Cabo, for more information please visit www.financecabo.com or call 1-866-650-5845.