Have you been dreaming about becoming a homeowner in Mexico? If so, you’re not alone, so many people have the dream of having a vacation home, especially in popular coastal destinations in Mexico such as Cabo San Lucas or Puerto Vallarta.
Did you know that many foreigners are purchasing beachfront real estate in Mexico that they couldn’t afford in their own countries? It’s true. Some people buy a vacation home, and some even decide to retire full time in Mexico. While foreigners cannot hold title on properties near the coast or border, they can purchase real estate properties on the borders or coast legally through a Fideicomiso or Bank Trust.
A Fideicomiso or Bank Trust gives foreigners the ability to purchase property and the title will be held in a bank, and the homeowner is the beneficiary. In the meantime, keep reading below to learn more about bank trusts in Mexico.
What is a Fideicomiso?
To begin with, in Mexico there is a law that says only citizens of Mexico can purchase land that is near the coast or border. This law prevents foreigners from owning real estate property near the coast or border with the title being held in their name.
However, with a Fideicomiso or bank trust, a foreigner can buy real estate in Mexico. Also known as a Bank Trust in English, a Fideicomiso is the legal way and official process for non-citizens of Mexico to be able to buy real estate by the coast or border.
The deed is held through the bank trust and the bank is the trustee, and the beneficiary is the homeowner. Bank Trust owners have the same rights as citizens of Mexico. The property goes to the beneficiary, and if they pass away, it is able to be passed down to their heirs.
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How Does the Bank Trust Work?
A Notario will organize the Bank Trust or Fideicomiso. The bank trust will have a time term of fifty years, then it will automatically renew for another fifty years once it concludes. It is very simple to set up a Fideicomiso and it is affordable as well. In addition, a Fideicomiso gives the homeowner the right to designate a second beneficiary in the event of the homeowner’s death.
The heirs don’t have to go through probate, because the title is held in a bank trust legally. Non-citizens of Mexico can own coastal real estate in Mexico legally. You should only work with a reputable real estate agent or developer. When an offer has been accepted, the title company will hold the escrow funds, then disperse them at closing.
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Location is Important
One of the most important things to consider when you are purchasing real estate in Mexico is the location. You can upgrade your property or elegantly furnish it, but you can never change its location. Some of the most popular and sought out properties are on Mexico’s beach and top tourist destinations such as Cabo San Lucas or Puerto Vallarta.
There, you can find all types of real estate including older homes, condo’s, villas, and brand new developments for homebuyers. However, you should always work with a developer that is reputable if you are purchasing a new construction.
You should remember if you purchase an older home, you can expect to do many repairs, which can be very expensive over time. You should always have a house inspection done before you make an offer on the property.
For this reason, many people decide to invest in new homes that will have less repairs and maintenance issues.
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You have just learned that foreigners can legally purchase beachfront real estate in Mexico through a bank trust or Fideicomiso. Make sure you work with a reputable real estate agent or developer.
Cabo San Lucas and Puerto Vallarta are great options because of the area’s natural beauty and excellent weather. If you want to check out a great property, come visit us at Villa La Estancia.
We have lovely properties in Cabo San Lucas and in the exclusive neighborhood of Nuevo Nayarit which is just 15 minutes north of the Puerto Vallarta Airport. There, our luxurious hotel-concept properties are ideally situated on the best beaches in Mexico which homeowners absolutely adore.
In addition, our home owners love their spacious beachfront residences that are elegantly furnished and designed. Also, homeowners have access to our world class amenities and services, too.
Ready to learn more? Contact us today at Villa La Estancia!