Foreigners are legally permitted to own property in México. If you own property outside of the restricted zone (50-kilometers from the coastline or 100-kilometers from the border), you are allowed to own the property fee simple. For all intents and purposes, fee simple ownership of property in México grants you nearly the same bundle of rights you receive when you purchase property in many parts of the world.

Mérida and some areas of the Yucatán are in the restricted zone. To acquire property in the restricted zone you must engage a Mexican bank to execute and hold title to the property with you using an instrument known as a fideicomiso. You and the bank are both listed in the title papers.

FIDEICOMISO

The fideicomiso creates a trust agreement for the benefit of the foreign buyer. The bank has a fiduciary obligation to the owner. The owner retains all the benefits of ownership and has the legal right to lease the property, sell the property, and/or will the property to his heirs.
Fideicomisos are currently 50-year documents. They can be renewed at the end of the 50-year term for an additional 50-years. There is no limit to the number of times the fideicomiso can be renewed. The renewal fee is currently running around $900.00-USD.

Currently, the cost for initiating a fideicomiso is around $2800.00-usd. There is also an annual fee to the bank for maintaining the fideicomiso. The annual fee is based upon a percentage of the value of the home. A ballpark figure for a home in the $100k USD range is around $600.00-USD a year.

FOREIGN OWNED MEXICAN CORPORATION

You may also own property as a share holder of a Foreign Owned Mexican Corporation. It costs around $1500.00-USD to create a Mexican Corporation and legally register it with various governmental entities. You will need to incorporate under the laws of México and report your corporate earnings through an accountant (accountant fees vary between $50-$150-usd a month).

The corporation requires a minimum of two live, individual share holders, that are at least 18-years of age. The principal officer of the corporation is required to have an FM-3 Visa. You can apply for the Visa yourself at the Mexican Immigration office (expect several return visits - they do not speak English) or you can hire an attorney to handle the process for you. It will cost around $500.00-usd. If the property you wish to purchase is larger than 2000-square meters you may want to incorporate. You also may want to incorporate if you are going to be operating a business.

Current law does not allow a fideicomiso for properties larger than 2000 square meters (you can apply for an exception to this law). For more information on Mexican Corporations you can contact our Real Estate Attorney, Enna Baqueiro at ennabaqueiro@meridanotaria55.com or call her at (999) 926-66-68.

One of the greatest hurdles to owning property in the Yucatán is financing. There are few reliable sources of institutional financing for non-Mexicans. If financing is a must, contact: Tom Martin tom@wallstreetassociates.com.mx.

Some property owners are willing to carry short-term notes with substantial down payments. Typically, title will not transfer until the note is completely paid. Interest rates are often high.

We strongly suggest you find a reputable and knowledgeable Real Estate Professional. There are no licensing laws in the Yucatán for real estate agents. Anyone may sell real estate or refer to themselves as real estate agents. There are no oversight committees, no board of realtors, and no real estate commission. There are no good sources for comparable sales and there is no multiple listing service. Buyer Beware.

WARNING!

NEVER WRITE AN EARNEST MONEY CHECK TO AN INDIVIDUAL. WRITE YOUR EARNEST MONEY CHECK TO AN EARNEST MONEY ACCOUNT. GET THE NAME OF THE BANK, A PHONE NUMBER AND AN OFFICERS NAME WHO CAN CONFIRM THAT THE COMPANY HAS A REAL ESTATE EARNEST MONEY ACCOUNT!