Legal Considerations in Costa Maya Real Estate
Foreigners may obtain direct ownership of property in the interior of Mexico.
Foreigners cannot acquire direct ownership of residential property within the area 100 kilometers from the border and 50 kilometers from the coastline. This area is known as the restricted zone.
It is possible, however, to acquire beneficial rights to use, improve and enjoy property in the restricted zone through a Bank Trust or Fidecomiso authorized by the Mexican Government under the Ministry of Foreign Affairs.
The Fidecomiso is established for a 30 year renewable term and grants the beneficiary the right to use, rent, modify or sell the property.
An advantage of the bank trust is the avoidance of probate upon the death of the beneficiary when a substitute is named.
Property acquired for commercial use by foreigners may be owned without the need for a bank trust, provided that the property is held in a Mexican corporation. Depending on the type of business, it is often possible for a foreigner to own 100% of the Mexican corporation.
In a typical transaction, a preliminary sales agreement will be used. This is like an agreement to agree and is subject to a formal sales agreement which will be executed at closing by a Notario Publico.
The preliminary agreement should provide for a price, closing date and terms—generally, cash as bank financing is not readily available but in some cases owner financing is available. Other contingencies may be negotiated and incorporated into the agreement. Xcalak Realty will provide a sales agreement in both Spanish and English if you purchase through us.
Real estate transactions are “closed” by a Notario Publico, an official, highly respected government lawyer who acts as a neutral intermediary. Among other things, the notary is responsible for formalization of the final real estate contract, collection of transfer and capital gains taxes and recordation of the transfer with the Public Registry.
The notary is not your lawyer, however, and as with any investment, you need to seek independent Mexican legal counsel before proceeding. The lawyer representing you should select a notorio to process the transaction.
