Can Foreigners Buy Real Estate in Mexico?

Foreigners can easily buy real estate in Mexico, and many people from the United States, Canada and Europe have done so without any problems. There are certain restrictions that apply, which can be simply resolved but which should be taken into consideration so there are no surprises.

Restricted Zone for Foreigners Buying Real Estate in Mexico

The ‘restricted zone’ in Mexico for foreigners buying real estate is designated up to 62 miles from the borders and up to 31 miles from the coast. What this means is that foreigners are not allowed to hold the direct titles to land and property in these areas. So how do foreigners buy real estate in Mexico’s beach destinations? Well, that is where Mexico’s “fideicomiso” comes in to save the day. Essential the fideicomiso is a bank trust that holds the title of the land on your behalf in order to comply with constitutional restrictions.

Background to Fideicomiso

Since 1917, in response to the Mexican Revolution when the Mexican Constitution stated that all foreigners were prohibited from holding any ‘fee simple’ titles on property located in the restricted zones, it has not been possible for foreigners to buy property without a fideicomiso. In an attempt to avoid scams in the 1970s where foreigners would have to “borrow the names” of Mexican nationals to open their businesses, Mexico’s Foreign Investment Laws began allowing corporations to own the titles on properties in the restricted zones, but titles for residential properties were still restricted.

Nowadays, Mexican banks support a law that now lets foreigners own and enjoy any property in the restricted zones legally. Foreigners can purchase the property without just being an investor under a fideicomiso trust.

How does fideicomiso work?

The Mexican fideicomiso will permit non-citizens of Mexico to purchase real estate in the restricted zone if they allow the bank to be the trust holder of the property. The Mexican banks would be the Fiduciary of the property or the trustee. The trustee will take the title of the property and hold it to meet all laws governed by the constitution in Mexico. The trustee is not allowed to sell the property, because you are still the owner. You are the beneficiary of the property, and you hold all rights to the property. The bank and trustee just holds the title of the property, so everything is legal.

There is a fee that you will pay to the Fiduciary Bank for the trustee contract, which is usually somewhere in the region of $500 USD per year and you may also be responsible for any maintenance fees and land taxes. As the beneficiary of the property, you own all rights to the property in the restricted zones, and you can sell the property anytime, remodel, and even rent out the property. The Fiduciary Bank has to follow Mexico’s laws, and they cannot sell the property unless they have written consent by you, the beneficiary and owner.

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FAQ – Fractional Ownership and Real Estate at Villa La Estancia

What is a Fractional Ownership at Villa La Estancia?

Fractional ownership is the name given to the shared, deeded, ownership of a property wherein a number of “partners” own a percentage of the same property. Villas in this particular program at Villa La Estancia are fractionally divided into eighths (6 weeks) and quarters (13 weeks) of the year.

Where did the concept of fractional ownership originate?

The idea of fractional ownership itself has been around for a while; friends, families and business associates have been pooling their funds to buy property for hundreds of years! In fact, in the 1990s fractional jet ownership became quite popular!

Is Fractional Ownership the same as Timeshare?

No. Fractional ownership occurs when the buyer purchases a percentage, or fraction, of real estate, rather than units of time or points. Each fraction can appreciate in value according to market patterns and each owner can sell their share of the property whenever they wish to!

How do I know my schedule for use?

When you purchase a fractional property at Villa La Estancia you will be given a schedule of use, so that you can plan years in advance, if you wish. The schedule is a fixed rotatation, so you will be able to calculate easily when your property is free for you to use.

As a fractional interest owner, will I have exclusive use of the property?
During your allocated weeks, you will have exclusive use of your property. No matter if you are using your property or not, the unit will not be occupied by anyone else during your scheduled time, unless you wish to rent it privately or through the hotel. You can leave it empty on some of your days, or turn up halfway through your allotted time, if needs be. It is entirely up to you how much use you make of your time. Only other fractional owners and their guests will use the property during their scheduled times.

Who are fractional properties really for?

This type of ownership is perfect for you is you want the benefits of owning a vacation home but couldn’t afford or justify full ownership. One of the great things about fractional ownership is that you’ll usually be able to get a more luxurious property than you could otherwise afford on your own, likewise you’ll be in a very exclusive and secure community, complete with management services! Owning luxury real estate becomes more affordable.

Once you get the taste for fractional ownership, you will find that every time you visit Villa La Estancia, it feels like you are coming home. You will own a wonderful piece of real estate without having all the responsibilities!

How do Fractional Villas differ from residence clubs or condo hotels?

Both vacation home models offer luxurious accommodation and great services; however, fractional ownership Villas offer a greater sense of permanency! When you purchase membership at a residence club, you are signing up for a like for like unit at a resort rather than a specific residence that you will use each time you arrive. Instead, you enjoy suites with a similar, or the same, floor plan. With fractional ownership, you stay in the same residence every time, so you really cultivate a sense of belonging, and, as an added bonus, when the property appreciates you are entitled to your share!

Can I have guests stay at the property?

You can have any guest you wish at your property during your allocated time! During this time it is, essentially, your home so you can invite whomever you wish, whether they be family, friends or business partners. In fact, if your schedule is too hectic, you can allow others to use it in your stead. Guests, however, are your responsibility and will be required to respect the bylaws, rules and guidelines at Villa La Estancia.

Can I rent out my unused time?

Of course you can! If your schedule is too tight to allow you to make use of your priority time then you can rent it out to make a little money for your next vacation! Some Villas will qualify for exchanges, and tax benefits. Your tax advisor will be able to determine what these might be for you.

Do I have the same tax considerations with fractional ownership as with purchasing the entire property exclusively?

When you have the benefit of fractional deeded ownership of a property then you gain the same privileges and responsibilities that come with owning any other piece of real estate. You will experience potential appreciation, depreciation, interest and expenses just as you do with your first home, and you may sell or rent your priority time whenever you so choose. You should discuss your individual tax circumstances with your professional tax advisor, however.

Can I finance my purchase?

For a limited time, the developer at Villa La Estancia is offering financing, with a typical deposit of 25%, for up to 10 years. Most owners choose to pay entirely in cash, or to pay for their share with equity from their primary home.

Who maintains the property?

The property manager will oversee the maintenance, housekeeping and care of your Villa on an ongoing basis. The expense fees that you pay cover this cost, as well as the cost of repair and replacement of items damaged through wear and tear. The real estate fractional property will be kept clean by a professional housekeeper, who will in turn be supervised by the management team.

Any specific damage caused by accident, or otherwise, by owners and their guests is the responsibility of the owner of the priority weeks when the damage occurred. Local professionals will maintain the pool and gardens on a regular basis and any painting and repairs required for the Villa at large will be provided as and when needed.

Can I sell my share in the future?

Certainly; while we hope you will want to keep your fractional share permanently, you may sell it whenever you wish to do so. Resale shares are generally listed with a local real estate agent who will promote and oversee the sale of your share. You can also advertise in publications such as magazine and newspapers to sell your share just as you would any other real estate property that you own. If a fraction of the property you have invested in comes up for sale, you could also opt to buy that section of the villa, too.

Reasons to Retire in Mexico

Retiring in a foreign country has long been the fashion in the United States, Canada and Europe since the first wave of baby boomers began to take early retirement; so why is retiring in Mexico such as popular choice for North Americans?

There are so many reasons that make retiring in Mexico such a great choice. Whether you have retired early in your 40s or 50s, are reaching the state retirement age or are a fighting fix octogenarian looking for a location where you can afford to grow old in style, Mexico has so much offer. Let’s take a closer look at why you might retire in Mexico.

Warm Weather

Many people choose to retire in Mexico looking for warmer weather conditions, avoiding harsh winters and enjoying the sunshine throughout the year. For this reason, the popular locations for retirement in Mexico tend to be on the coast, locations such as Puerto Vallarta, Cabo San Lucas and Cancun, for instance; although many retirees opt for temperate climates in land which boast eternal springs rather than eternal summers. Living in locations that boast warm weather and sunshine throughout the year can do wonders for our health, skin and moods thanks to increased levels of vitamin D and serotonin from the sun.

More Affordable

Your pension and savings will go a lot further in Mexico and you can expect a higher standard of luxuries on a lower budget. Real estate is more affordable and many who choose to retire in Mexico can afford to keep their house back home as well as their second home in Mexico to escape the winters. Likewise, more luxurious properties become more accessible and you can spend out on amenities like swimming pools, jacuzzis and maid services, which all enhance your quality of life.

Excellent Private Medical Care

Excellent private medical care is available in Mexico, which has seen a huge rise in the popularity of medical tourism for both essential healthcare as well as cosmetic surgery. You will find that you will be able to afford a better health care plan for less in Mexico, or indeed discover that your health care coverage from home is extended over the border. On another note, home staff and caregivers are much more affordable in Mexico, so you might find that care for elderly members of the family can continue at home, without having to resort to using a residential or care home.

Making the Most of Life

Many retirees feel more at home in Mexico than in the US or Canada due to the spirit and warmth of the Mexican culture and people who so appreciate foreigners and their investment. The hospitality of Mexico is renowned and setting up home in the major tourist areas will offer you the chance to live that warmth firsthand. Retirement is the time of life when you should live your dreams and try those things you have always wanted to do but had too many responsibilities back home. Mexico’s laid back attitude and vibrant culture is the ideal stomping ground for those looking to let their hair down and live life to the full.

Best Advice for Things to Do in Puerto Vallarta

Top Ten Activities to Try in Puerto Vallarta

It can be quite difficult to select only ten activities that one should partake in while in Puerto Vallarta. This post simply is not long enough to list out and explain all of the various types of wonderful things to do in Puerto Vallarta. In order to help you get ready for an upcoming vacation to Puerto Vallarta and to make a decision on whether or not you would like to move there, here are the ten favored activities for this area.

  1. Golf
  2. Puerto Vallarta Golf Courses

    The golf courses in Puerto Vallarta are simply gorgeous. You can enjoy world-class courses that allow for you to look out over the ocean. You will not be able to enjoy such luxury in many other places. Learn to play golf in the sunshine for one of the top things to do in Puerto Vallarta.

  3. Sunset Walks
  4. Puerto Vallarta Sculptures on the boardwalk - Nostalgia

    It can be magical to walk along the beach barefoot, putting your toes in the sand and in the beautiful water. Since Banderas Bay is so wide, you will always have a chance to view a majestic sunset. The Malecon boardwalk is another place from which you can look at the sunset while you enjoy an ice cream or frozen yogurt. You even can get a cocktail to sip while you revel in this natural beauty.

  5. Skydiving
  6. Sky Diving in Puerto Vallarta

    Skydiving is a fairly new activity that is popular in Puerto Vallarta, with a brand new skydiving company having opened in Nuevo Vallarta recently. This company has a great reputation, and offers both beginners and more experienced people to jump. You can have a qualified instructor bring you on a safe tandem jump, or go on your own if you have a certification. Train for your skydiving certificate in Puerto Vallarta if you intend on being in the area for awhile.

  7. Whale Watching
  8. whale watching tours in Puerto Vallarta

    During the winter months, you can go on whale watching tours in Puerto Vallarta, and indeed can often see them jumping from the shoreline. Whales arrive to the warmer waters of Banderas Bay starting in November and are typically around until the end of March, when then they head north following the currents and food.

  9. Sports Fishing
  10. fishing in Puerto Vallarta

    This is one of the favorite pastimes that many people in Puerto Vallarta take part in. Numerous people who live in the area fish for the purpose of eating it, and some do just for fun. Book a tour, or you can charter a yacht if you want something that is more private. Look out for fish such as Sailfish, Red Snapper, Marlin, Tuna, and Mahi Mahi.

  11. Zip Lining
  12. Zip line Tour in Puerto Vallarta

    It can be very exciting to travel over the canopies of trees in the jungle, and that is just what you will be able to do when you go zip lining. You also will get to traverse rivers by hanging onto a rope. Have a great adventure when you go out on a zip line canopy tour. It can be truly amazing to view the forests in this way.

  13. Botanical Gardens
  14. Botanical Garden in Puerto Vallarta

    For people who enjoy the calm, the Vallarta Botanical Gardens can provide a tranquil oasis in the midst of the hectic atmosphere that is at the beach and boardwalk and the other surroundings. The Botanical Gardens are located high in the mountains, surrounded by jungle. You can escape the heat and experience quality time by the river, as well as at the shop and restaurant. Spend a whole day there if you wish to be refreshed for one of the most tranquil things to do in Puerto Vallarta.

  15. Marigalante Pirate Ship
  16. Marigalante Pirate Ship Puerto Vallarta

    If you would like to get a chance to experience the Pirates of the Bay, it is a good idea to take a pirate ship cruise. When you purchase tickets, you will get to have a meal and have access to the open bar. There will be family-friendly pirate entertainment to accompany your cruise and, if you would rather go during the day, you can opt for the Pirate Ship Day Tour and have a great time kayaking and snorkeling. This is one of the best family things to do in Puerto Vallarta.

  17. Paddle Boarding
  18. Top things to do in Puerto Vallarta - Paddleboarding

    Paddle boarding has become quite the popular activity in Puerto Vallarta. Many of the hotels actually have paddle boarding equipment that you may borrow. Also, a great number of the beach clubs have boards that you can borrow at no charge or rent at a reasonable price.

  19. Night Out on the Town
  20. Night Out on the Town

    The Malecon is full of a bustling party atmosphere that you are sure to love. You should spend at least one night out in this neighborhood. The nightclubs there are free for you to visit, and anyone who is 18 years of age and older can enter. You do not even have to go into the clubs in order to experience the buzzing night life that is a part of the Malecon; just stand outside and you will hear the music and catch scent of the vibe.