Playa Del Carmen is just amazing to live in. For more info go here: Playa Del Carmen vacations blog. Every year the property values and tourism rates are going up in Playa Del Carmen. There is a lot of confusion out there about owning property in Mexico. Especially when it comes to owning owning property in the “restricted zones” like close to the beach, and near the borders, Playa Del Carmen included.
As experienced real estate owners in Mexico, let us clear up a few misunderstandings about owning International Real Estate. Having been down this road before, we will make this process as seamless and pleasant as possible. We pretty much know how the process works and understand the reasons for this method of property ownership, so here is a partial explanation for the trust method of property ownership in the “Coastal Zone” of Mexico.
Many people are still under the impression that the ownership of property in Mexico is not available to foreigners. It’s still not unusual to have someone emphatically exclaim that “you can’t own property in Mexico”, or that “you have to have a Mexican partner on title to own property in Mexico”. Let us show you the facts to clear up any misconceptions that you may have.
Don’t believe any of it. Here is the truth:
At one time the Mexican Government prohibited foreign nationals from owning land in the restricted border zones (within 50 km. of the ocean, border etc.) because they were concerned about being taken over by foreigners. Land Trusts (Fideicomisos) have been put into the Mexicn Constitution, and cannot be altered. This period of time is what spawned many of the confusions and fears for owning land in Mexico, as many who tried were burned badly.
Obviously, people were not too happy about this. The government introduced the solution with the Fideicomiso system, allowing land to be purchased and owned inside the restricted areas. Paradise was suddenly within reach of gringos everywhere. Not unlike a trust created in Canada or the USA where assets are lodged in the trust and held for the exclusive use of the beneficiary, your Mexican trust holds the property deed for the sole benefit of you, the beneficiary. You have the right to do anything with the property (within the law of the local jurisdiction of course). You can occupy, rent, sell, develop, lease, etc. at your discretion. One advantage of the trust is that when creating the trust document for a specific property, you lay out your beneficiaries upon you death, eliminating the need for a Mexican Will.
The down side to all this is you end up having to pay a slightly increased price to create the fideicomiso, although not much more than nationals do, and you also have an annual fee that you must pay to the bank who holds the trust. I look at this fee (tax on us) that Mexican’s do not have to pay, as a part of the price we pay to enjoy all that Playa Del Carmen has to offer. This ‘payment of yearly trust fee’ certainly makes for good discussion at margarita time.
To clear up any confusion, you aren’t required to live in Mexico to purchase or own Playa Del Carmen real estate. The laws governing property ownership are certainly different from ours, but the result is nearly the same. You can rest easy knowing that despite the inconvenience, the land trust program makes sure you and the seller are both protected legally on all fronts. When the time comes, make sure you use a good Notary that adheres to the proper procedures. Ask questions!
Ideally this article cleared up more questions than it raised. There is lots of information on trusts in different publications and on the internet, most of which is factual. We sincerely hope that this process is as clear and trouble-free as it should be. Owning land in Playa Del Carmen is not difficult. Owning Real Estate In Mexico is within your reach!
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