As in any civilized Country, in any part of the World, Laws issued by the corresponding Governments rule the different matters executed between Individuals, Corporations, Governmental Agencies, etc. etc. etc., Mexico is not the exception. You may find that these regulations seem alike to the ones in your Country,and assume that procedures are the same, however in some of these cases
The diference between Mainland and the Baja Peninsula
Well, first of all in what We call the mainland foreigners can own and hold title in their name, as any Mexican Citizen. Nevertheless, the mexican constitution prohibits foreigners to own property directly within 50 kilometers from all coastlines and 100 kilometers from the borders.That, dear friends, means the hole Baja is ruled under this precept. Do not get confused and sometimes assume that you can buy Property in Baja through a simple Property Title. Foreigners in this case shall acquire Property through a Bank trust called "Fideicomiso".
This federal requirement, also called fee title, is a 50-year trust and management of the buyers property and requires good title. Setting up your fideicomiso is relatively inexpensive, with the original fee being generally less than $3,000 dollars. This is followed by a small annual payment of around $450 dollars. (There is a small variation depending on the bank involved).
It sounds complicated!... Not really, let me explain!
The bank trust(Fideicomiso) is similar to a living trust in the United States. In a few words the Property is transfered from the Seller to the Mexican Bank who sets up the Estate in a trust. The Buyer is designated as the primary beneficiary of the trust and has the right to name two heirs who shall continue the trust after the primary beneficiary passes away. At the same time, such heirs are entitle to name their heirs and so on....Ajah, Then the Bank looks like being the Owner!.. NO, and once again No; The Mexican Bank is designated by law ONLY as the administrator of the Property, and the explanation is because you, as the primary beneficiary, are the only one with the right to sell, rent, subdivide, built, and whatever an owner of a Property can do, of course, under the laws and regulations that Mexican Citizens are also able to execute.
Is it really safe to buy Real Estate Property in Baja?
It surely is, but in order to avoid having your interests at risk, its very Important that you seek for Professional Brokers and Counselors before anything to provide You with an overall panorama on Real Estate Transactions in Mexico, and when you make a decission on which Property to buy, Have these Professionals guide You through the specific transaction.
There has been a significant increase in Foreigners buying properties in Baja to use as a second vacation home or as an investment.Moreover, La Paz has seen this increase/demand in buying Property for an income/investment in vacation rentals and retirement pourposes. Lately in Baja the Economy is growing due to Mexican and Foreign Firms focusing with new projects in this Mexican State. The safest way to buy property in Baja, or Mexico, or even in The United States or Canada is to follow the legal process locally applicable.
Some property restrictions of the Fideicomiso are:
a)Ejido Land Be aware that Ejido Land is not allowed to be sold under a Fideicomiso, unless the Owner has acquired full ownership to the land.
What is Ejido Land?...
These are lands that are dedicated to farming cooperatives entitle to the use of Land only,because the cooperative member has use rights only. They cannot sell these lands without permission granted by the Ministry of REFORMA AGRARIA.
Many ejido coastal properties, on the Pacific and the Sea of Cortez, were never suitable for farming. This problem caused that the Ejido Members, changed the use to trailer parks, or agricultural, even when such use was prohibited by Law. But due to the lack of suitable soil and water,in the year of 1993 the Federal Government promoted and was authorized before the Congress to make the corresponding changes in the law to allow ejidos to privatize their lands, acquiring full ownership and use it in the best way to produce or, like most of the Ejido Members have been doing, sell the land.
b)Size and Zoning Also Be aware that restrictions in the size of the lot may apply and not allowed to be bought under a Fideicomiso. Zoning may be a restriction as well due to zoning clasifications and Exclusive Use of such zoning to Mexican Citizens Only.
