There was once a time that Canadians or Americans were restricted from buying property in Mexico that was 50 km from any coastline or 100 km of a neighboring country. This zone meant that nobody other than Mexican nationals were allowed to invest in lands located within these areas. However, times have changed and the coastal and border areas that used to be restricted from foreign investment have opened. This occurred when the government decided to start issuing something called a fideicomiso, which is basically a banktrust. The fideicomiso was created to allow foreign investors to participate in Mexico´s rapidly expanding sectors while exercising complete and legal control over their investments while complying with Mexico’s investment laws.
A banktrust is a property interest held by a Mexican bank whose sole purpose is to manage the property for the benefit of the owner. It is essential to remember that although the bank legally acts as the trustee and holds the title, your property is not an asset of the bank. The beneficiary has every legal right to occupy, rent, modify or inherit the property as they wish. Trusts are set up for a 50 year period and is renewable, allowing the purchaser to continue enjoying the benefits from their property. The term of a banktrust is 50 years, but don´t worry because you can extend it once you reach year 48 or 49 and extend it for another 50 years.
The first step to becoming a homeowner in the restricted zone is to find a bank or financial institution to hold the trust. Once you have found it, it is essential to sign a Trust Agreement where both parts agree how the trust will be held and what benefits you will enjoy as the first beneficiary. There will be an initial fee to pay for drawing up the agreement, which is usually around $700 USD, but it will depend on the property and institution.
There are three parties to the banktrust. There is the financial institution who owns the property, the first beneficiary (that would be you) and a second beneficiary who is anyone you want to pass the property to in case you or your partner passes away. When you own a property in Mexico underneath a banktrust you have all rights to that property. You can extend it, you can remodel it, and you can sell or take out a lease on this property. And it’s protected by the Mexican Constitution.
The other way to become a titleholder is through a Mexican corporation. Unlike a banktrust, where you must inform the bank if you want to sell, rent, or do modifications to your property, a corporation allows you to retaining absolute control. Mexican corporation is great if you want to rent out your property. Remember that as a US citizen you must report all property while Canadian citizens must report property over $100,000 USD.
Both options are simple. Incorporation can be set up in a week and you can incorporate under whatever name you wish. It is also cheaper to set up but you are required to file monthly statements. You need a minimum of two shareholders and can have as many properties as you want and you can operate a business under the same corporation. Work from home or run an internet business, while enjoying dividends and tax advantages that come with it.
Owning a property in Mexico is possible. I always advise my clients to talk to a reputable lawyer, so they can discuss all their options and decide whether a Banktrust or Mexican corporation is right for them and their needs.
By Thomas Lloyd for TYT
Thomas Lloyd, from Indiana, is a graduate from the prestigious Krannert School of Management at Purdue University, where he obtained a degree in Administration with the Financial Management option. He has been working professionally in Mexico since 1995, and in 2011 he was the first person to ever attain a new nationally regulated Real Estate degree and professional identification number for the Country of Mexico. In 2009 he was voted Realtor of the year, because of his professionalism, attention to customers and knowledge of procedures and the market. Also, he has been active in the real estate community serving on the real estate association’s Honor and Justice Committee. Thomas founded TOP Mexico Real Estate to help non-Mexicans have an enjoyable and safe experience as they purchase and invest in real estate in Mexico.
more recommended stories
Grand Finale of the 2018 Merida Initiative National Mock Trial Competition for Mexican Law Students
Mexico City, 21 June, 2018 –.
Three time NBA Champion Klay Thompson charters plane to Mexico full of IG models
Three-time champion Klay Thompson is in.
Mexico’s soccer national team mental coach is transforming mindsets nationwide
Though the spotlight is always on.
Maya sacred book “Chilam Balam Tekax” astrological predictions analyzed by INAH experts
The first specialized integral study of.
Prisma Hotel Group announces investment of 357 million for remodeling hotels nationwide
With the objective of always providing.
Trump’s ‘Tent Cities’: where unaccompanied minors are kept in South Texas
According to Esquire: Beyond the moral and.
“Mayas y Piratas” Festival in Chetumal
The Bay of Chetumal will host.
The current ESAY premises will be turned into the new University of the Arts
“The transformation of the Higher School.
Growth in tourism is expected in Valladolid during the summer holiday season
After carrying out various promotional activities,.
TIME Magazine Powerful Cover: Welcome to America
It is of public knowledge, Donald.