Tuesday, September 28, 2010
How To Buy Real Estate In Mexico
If you are interested in purchasing property outside the restricted area (32 miles from the coast or 63 miles from the borders), you can do the same way you can do it anywhere else in the world, with a simple deed.
To purchase a property that is within the restricted area, which includes Mérida and most other popular areas of Yucatan, you will need to sign a trust contract with a Mexican bank. Such contract is called a "fideicomiso", and both your name and the bank's appear in the "escritura" (contract).
The contract creates a trust for the benefit of you, the foreign buyer. The bank has a fiduciary obligation to the owner. The owner retains all the benefits of ownership and has legal rights to rent, sell or inherit property as they see fit. Normally these contracts expire after 50 years, but they can be renewed at the end of those 50 years for an additional 50 years. There is no limit on the number of times the fideicomiso contract can be renewed. The 50 year renewal cost is currently about $900 USD.
Currently, the cost to start a trust is approximately $2000 USD. There is an annual fee to the bank for maintaining the trust, which is based on a percentage of property value. For a house in the range of $100,000 USD, the fideicomiso maintenance cost is approximately $ 600 USD a year.
Currently, the law only allows trusts for properties of less than 2000 square metres (about 21,520 sf). You can apply for an exception to this law.
Owning a Mexican company
If your property is over 2000 square meters, you can create a Mexican corporation to buy the property. The cost to create a legally-registered company is approximately $ 1500 USD. You need to be incorporated under the laws of Mexico and all the proceedings must take place under the supervision of an accountant. The cost of the accountant varies from $ 50 to $200 USD per month, depending on how much activity takes place in your corporation.
To form the company requires at least two partners who are at least 18 years of age. The legal representative of the company must be in possession of an FM-3 Visa. You can apply for a visa yourself in the offices of Mexican immigration or you can hire a lawyer to do it for you. The cost for a visa is about $ 500 USD.
Whether buying a property, starting a business, or creating a corporation, you should always consult with a local lawyer. Our sister company, Yucatan Lawyers, provides legal services for real estate transactions, immigration issues and all corporate issues.