Can foreigners acquire property in Mexico?
Naturally, with the passage of time, Mexico has become increasingly suitable for foreign investment, especially in cities in the southeast of Mexico, which have a high development in the real estate sector. Through this article we tell you how foreigners can buy property in Mexico.
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Properties in Mexico.
Mexico has become an excellent investment destination.
Proof of this is the great interest to invest in real estate in Playa del Carmen. Where direct foreign investment in real estate projects exceeds one billion pesos. This makes us think that a foreigner can buy real estate in Playa del Carmen. properties in Mexico without being a company.
This is why we should mention that the purchase of properties in Mexico is not limited to Mexicans. As a foreigner, as long as you meet certain requirements and reach an agreement with the federal government, you can invest in real estate in your own territory.
In this article, we will discuss what you need to know to invest in Mexico's real estate sector, from documentation to possible forms of payment and financing:
What does the law say?
Article 27 of the Political Constitution of the United Mexican States allows, in most cases, foreigners to buy a foreigner's property in the United Mexican States. properties in Mexicoprovided it is private property.
Summarizing the content of Article 27, "Only Mexicans and Mexican born or naturalized companies have the right to acquire the domain of lands, waters and their accessions or to obtain mining or water exploitation concessions".
How does it apply to foreigners?
1993 was an important year for this issue, as the Foreign Investment Law made it possible to acquire foreign investments in the United States. properties in Mexico to be extended to foreigners, despite the existing prohibition in Article 27.
In order for this to be valid, it must be done through certain entities or companies, among which we can mention: bank trust, Mexican companies, among others.
However, there are some limitations to the acquisition of real estate. In a zone of 100 kilometers along the borders and 50 kilometers on the beaches, foreigners may not be able to have direct ownership of land and water. This includes real estate, parcels or ejido land. These are called restricted areas.
Following this guideline means that property cannot be acquired within approximately 50% of Mexican territory, which extends for a large number of miles along the coast and borders.
AN IMPORTANT POINT
It is of utmost importance to clarify that when the purchase interest is based on restricted ownership, it is not possible to obtain direct ownership, i.e., only the rights are obtained in the capacity of trustee.
For this process, a permit must be obtained in advance, which is provided by the Mexican government, which in its contract clearly stipulates that the foreigner is not the full owner of the relevant property. It is done through a trust with a term of 50 years.
In plain English, foreigners can buy homes or land on Mexican beaches because banks hold title to the property through trusts.
The purpose of the amendments to Article 27 was to promote Mexico's economic growth and allow Mexican companies with foreign investment to invest in favor of the country's development.
What is the Calvo Clause?
As we mentioned at the beginning of this article, foreigners seeking to acquire or invest in real estate in Mexican territory must sign an agreement with the SRE (Ministry of Foreign Affairs). This agreement is known as the Calvo Clause.
What does the clause mention?
In order for the State to disclose this right to foreigners, they must reach an agreement whereby they are considered as nationals, that is, as Mexicans, with respect to the real estate that is subject to purchase.
This is to resolve property disputes without invoking government protection, i.e., if there is a risk of loss of property or non-compliance with the agreement, the property or investment will be held for the benefit of the nation.
In short, foreigners can buy properties in Mexico in a restricted area in two ways:
- Through a Mexican corporation, for real estate or land for non-residential purposes.
- Through bank trusts for those whose purpose is for residential purposes.
Are you from abroad and interested in a property in Mexico? At iBrokers we have a wide catalog of the best and most beautiful properties in the states of Quintana Roo, Yucatan and Morelos.
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