Learn one great option as a foreign investor looking to purchase real estate in Mexico.
Purchasing property in a foreign country can seem like a daunting task, especially when you don’t know the laws and regulations of that particular country. If you are looking to buy property in Mexico, one of the most important things to understand is the Fideicomiso. This is an agreement between the government and an individual or corporation that allows foreign buyers to purchase and own property in certain locations throughout Mexico. Let’s take a closer look at how a Fideicomiso works for foreign buyers.
What is a Fideicomiso?
A Fideicomiso is essentially a trust account set up by the Mexican government for foreign buyers who want to purchase real estate in certain restricted zones of Mexico. It allows the buyer to have full rights over their property as if they were Mexican citizens, but it also grants some restrictions such as not being able to transfer ownership without authorization from the government.
How Does it Work?
The buyer will first need to set up an account with a bank that is authorized by the Mexican government. The bank will then act as trustee on behalf of the buyer and will handle all transactions related to buying, selling or transferring ownership of the property. This includes collecting rent, paying taxes and all other financial transactions associated with owning real estate in Mexico. The buyer will be given full control over their trust account, while still having peace of mind knowing that the Mexican government has granted them full rights over their property. We typically refer our clients to Mexlaw as we’ve used them for years and have been fantastic! You can learn more about them here: Mexlaw
Benefits of Using a Fideicomiso
One major benefit of using a fideicomiso is that it allows foreign buyers to purchase and own property without having to become naturalized citizens. It also eliminates any potential issues with inheritance taxes since all assets are transferred directly through the trust account rather than through probate court proceedings which could be costly and time consuming for non-Mexican residents. Additionally, trust accounts provide much needed security for both parties involved, as all legal documents are thoroughly reviewed before being approved by both sides.
We’ve put together a short video explaining more details including costs involved in setting up a Fideicomiso! You can check that out right here:
Using a fideicomiso when buying real estate in Mexico offers numerous benefits for both parties involved—the buyer and seller alike—and ensures that everyone’s rights are respected throughout every step of the purchasing process. With this understanding, you can feel confident knowing you have taken all necessary precautions when looking into purchasing real estate in Mexico as a foreigner. Ultimately, if you do your research ahead of time and use due diligence when selecting an authorized bank for your trust account, you can rest assured that your transaction goes through smoothly!
Learn more and meet the incredible team that makes up the Elements Real Estate group: Click Here