Important information that you need to know

The fideicomiso is a long-term irrevocable trust established to encourage foreigner investment in Mexican properties within the restricted zone. The restricted zone consists of 50 km from the coast and 100 km from the border and is intended to be sold only to Mexican citizens. This process allows foreigners to invest without violating the Mexican constitution.

By purchasing property through the fideicomiso, the bank holds your property in trust with you as the beneficiary. The owner has absolute rights over the property; they may rent, renovate or sell.

A common fear is that the fideicomiso is only a lease since it is set in 50-year renewable increments, but this is not true. Although the Mexican bank is authorized to act as a trustee, the trusts are not assets of the bank. They are not permitted to take any action without the written authorization of the beneficiary (owner). There are other precautions a buyer needs to take to avoid losing their investment, but the fideicomiso is a safe way to purchase real estate.

There is a fee to set up the trust and a yearly fee paid to the bank that holds the fideicomiso. These fees depend on the bank and the property and will be determined before closing. Like anything else, always hold on to your proof of payment.

Some buyers may choose to take over an existing fideicomiso, Assignment of Rights (Cesión de Derechos), depending on the new setup fee versus the assignment fee.

Be aware the fideicomiso has nothing to do with yearly property taxes (predial), which are paid separately to the municipality.

Missed fideicomiso payments will not cause you to lose your property, but you will incur interest; all fees must be up to date before selling the property.

If the property is your only asset in Mexico, you do not need a will as the fideicomiso allows you to designate beneficiaries in case of death. The fideicomiso overrides a will in the event there is a conflict of benefactors. The property will be transferred to the heir without going through probate proceedings.

The only alternatives to purchasing through a fideicomiso are becoming a Mexican citizen or creating and purchasing through a Mexican corporation. Foreigners can own 100% of a Mexican corporation.

The fideicomiso is not required for foreigners purchasing property outside the restricted zone; in that case, foreigners can hold a simple property title.