| Owning land in Mexico
 You may have
heard of and been confused by the Trust System, or the Mexican Fideicomiso and the
Restricted Zone.
The Fideicomiso is a Trust Agreement and the Restricted
Zone is the land 60 miles from the border and 30 miles along Mexico’s coastline.
For historical reasons, the Mexican Constitution of 1917 once prohibited foreigners
from holding direct title to land residing within 60 miles of its border or 36miles of its
coastline. Constitutional amendments in 1994 changed this by allowing foreigners to own
direct title to property for commercial purposes, but still restricted direct title
ownership for residential purposes. However, the Mexican Trust gets around this by
permitting foreigners to purchase Restricted Zone property for residential purposes, in a
manner consistent with Constitutional provisions.
The property that you buy makes you the beneficiary of the Trust, and you have the same
rights of ownership as in your own country, including the right to enjoy it, rent it, sell
it, or leave to your heirs. This of course is not at all like a leasing transaction.
We expect Trusts to be issued for a period of 50 years. A law put into effect in 1993
makes it renewable for another 50 years upon the request of the beneficiary and this
clause is a part of the contract with the bank. The bank administrates the trust for an
annual fee. There are many advantages to having this trust in place. In particular, once a
purchase agreement is completed, the transfer of the benefit to the buyer is fast and
inexpensive. |
