Can Mexican Government take my property?
The most common fear among people who consider to invest in Mexico for the first time is, Can Mexican government take my property?
Short answer is:
No. If your property was purchased legally, The Mexican government has no legal right to take the property, nor do they want to discourage tourism of foreign investments. Using a Mexican lawyer during your real estate purchase will guarantee you title on the property, making it virtually impossible for someone to seize your home.
Where this fear originates?
It comes from not knowing how Mexican real estate works. There are few points that investor needs to be aware of when it comes to real estate in Mexico
Point #1. There are several types of lands in Mexico. One, called Ejido, is property which Mexican Nationals are given the right to use by the government for living and working, typically farming.
Foreigners cannot own Ejido land and are considered as trespasser. Some crafty locals can pitch you this land for tasty price and even sell, but if you are foreigner you won’t have rights to this land and at any moment government can take it away.
Types of lands you can own:
1) Lands other than Ejido and 30 miles away from the coast
2) Lands that are on the coast or within the 30 miles range with 50 years Trust that’s called “Fideicomiso”
Point #2. Confusion around “Fideicomiso”.
What is “Fideicomiso” anyway?
In the simplest terms, a Fideicomiso is a bank trust that allows you to invest in any Mexican property and own it as a beneficiary. Its main idea is that you have all the rights of real estate ownership while a Mexican bank holds the legal title to it as your trustee. It’s like fee-simple ownership, meaning that the bank cannot place liens on your property or use it in any other way. Representing your interests is the ultimate responsibility of the trustee.
What you need to know about this trust:
The real estate trust is not a lease; it is simply renewed and can be passed on to your heirs.
You have the right to give your estate asset as a pledge and mortgage it by setting up the Guaranty trust. This can be done only if a Mexican bank offers the services of that kind.
A Fideicomiso allows you to leave the real estate as an inheritance to your alternate beneficiaries.
Most important point of all is that you can easily renew your 50 year trust or leave to as inheritance.
Remember These Four Points to Protect Your Investment and your investments will be safe
Make sure you have the title on the property, hire a local real estate lawyer; they will guarantee title and ensure it is free of encumbrances.
Do not buy Ejido land, this type of property is for Mexican Nationals.
Pay your property taxes on time.
Do not use the property for illegal activities.
Get in touch.
Your dream home is much closer than you think.
image shot at Ara Ha