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San
Felipe the jewel of Baja - Get in on the next Cabo with San
Felipe Real Estate
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complete San Felipe Real Estate Investment Package:
Todos Santos
- Pictures and Info
on San Felipe Baja California
Real
Estate in Mexico
Foreign Ownership of Property on the Baja
Foreigners
are legally permitted to own property in Mexico. If you own property outside of the restricted zone (50
kilometers – about 31 miles – from the coastline or 100
kilometers about 62 miles from the border) you are allowed to own
property fee simple. For all intents and purposes, fee simple ownership of
property in Mexico grants you nearly the same bundle of rights you
receive when you purchase property in the USA.
To
acquire property in the restricted zone you must either engage
a Mexican bank to execute and hold title to the property for
you with an instrument known as a fideicomiso or create
a Foreign Owned Mexican Corporation.
The
fideicomiso creates a trust agreement for the benefit of the
foreign buyer. The bank has a fiduciary obligation to the owner.
The owner retains all the benefits of ownership and has
the legal right to lease the property, sell the property, and
will the property to their heirs.
Fideicomisos
are currently 50-year documents.
They can be renewed at the end of the 50-year term for
an additional 50 years. There
is no limit to the number of times the fideicomiso can be
renewed.
Finally,
the fideicomiso does offer some additional comfort to those
foreigners that fear that the Mexican Government could
nationalize and claim all property not currently owned by a
Mexican National (a somewhat irrational fear when you consider
the global repercussions to Mexico).
The major Mexican Banks hold literally hundreds of
thousands of fideicomisos and receive substantial annual
income from them. Recently,
many of the largest banks in Mexico have merged or are in
partnership with international banking corporations in fact
over 80% of Mexican banks are now foreign owned: Citi-group
recently merged with a local Mexican bank and the surviving
entity is now known as Banamex and Bank of America just
purchased 25% of Santander Central Hispano Bank. The stockholders of these banking concerns are international.
If the Mexican government were to remand or take
property from the banks, denying them income, and legally
placing them in fiduciary default to hundreds of thousands of
clients, it would cause an international incident.
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