Yes, a Canadian or USA citizen can own real estate by placing the property in a bank trust. (Fideicomiso)
Yes, laws passed in 1973 and 1993 have made it possible for foreigners, foreign firms, and Mexican firms with foreign participation to acquire interests in coastal real estate through a bank trust.
There are Three parties involved in a bank trust. The seller of the property, which is the Trustor, the bank, which is the Trustee (Fiduciario), and the buyer, which is the Beneficiary (Fideicomisario).
The initial fee is approximately $500 USD for establishing the Trust. In addition, the bank collects the first year's annual fee of about $500 depending on the bank. This information is based on the current fees the bank charges parties opening a Bank Trust.
Yes. There are additional fees for the Bank Trust which is usually between $450 and $600 USD. The bank charges an annual fee to cover its services as a Trustee.
Title of the property is transferred to a trust with a Mexican bank acting as Trustee. The Trust Agreement is formalized by the issuance of a permit from the Mexican Ministry of Foreign Affairs. The property buyer is then designated as Beneficiary in the Trust and the beneficiary rights are recorded in the public record by a Notary Public.
As Beneficiary, you have the right to sell your property without restriction.The Trust is a legal substitute for fee simple ownership, but in many cases, the Trustee is the legal holder of the property. You may also transfer your rights to a third party or pass it on to named heirs.
Yes. The trust is renewable according to the Foreign Investment Law passed in 1993. Trusts can be renewed for an indefinite number of successive 50 year periods. In effect, they can run in perpetuity if you do not change your trust administration bank at any time.
There are normally five players involved in a real estate transaction.
1) Real estate company(ies).
A Public Notary is a government-appointed lawyer that ensures the proper transfer of the property by processing and certifying all real estate transactions including drawing up and reviewing all official documents.
The official documents which are required by law in order to transfer the ownership of property in Mexico include the following :
- A no-lien certificate based on a complete title search from the Public Property Registry.
- A statement from the municipality regarding property assessments.
-Other pertinent taxes that might be due.
- Appraisal of the property for tax purposes.
Yes. If the new buyer is a Mexican National, you can instruct the bank to transfer title to the buyer. If the buyer is also a foreigner, you can simply assign the beneficial rights to your trust. If the buyer decides to open their own new trust with a bank, they also have that option.
Yes and No. For a buyer getting a new trust, they will automatically have a 50-year trust.
If a buyer were to take over an existing trust, they can renew or extend the trust for an additional 50 years after the remaining years expire.
It is common practice that the buyer pays the transfer of acquisition tax and all other closing costs, including the Notary's fees and expenses, while the seller pays his capital gains tax and the broker's commission.
The real estate transfer tax ranges between 2% to 4% of the tax appraisal value, which is generally less than the sales value.
The rest of the closing costs, excluding the transfer taxes, vary from 3% to 5% of the selling price.
The buying process takes from 30 to 60 days when using a Bank Trust. The process usually takes a week for Mexican national buyers.
An Escrow service held by a third party on behalf of the buyer and seller manages the money portion of the transaction.
Yes, a REALTOR is a professional real estate agent who holds membership in the National Association of Realtors through membership in the Mexican Association of Professional Real Estate Agents (AMPI). A REALTOR is held to a higher standard of ethics and strict codes of conduct and continuing education. Ask for an AMPI agent.