FAQ – All About the Fideicomiso
What is a Fideicomiso?
A fideicomiso is a bank trust; it allows foreigners to purchase property in the restricted zone in Mexico. The restricted zone, described in Article 27 of the Mexican Constitution, encompasses all property within 100 kilometers of an international border, or 50 kilometers of the coastline.
Is the Fideicomiso a lease?
No—it is a bank trust. It allows foreigners to own property in Mexico’s restricted zone as a beneficiary. A fiduciary, most commonly a Mexican bank, holds legal title as the foreign buyer’s trustee.
What rights does the foreign buyer have regarding their property?
The foreign buyer enjoys customary ownership rights—he can sell the property, improve the property, make the property available for rent, and bequeath the property to his heirs.
How long is the term?
The typical fideicomiso term is 50 years and can be renewed indefinitely. The annual fee is due each year on the anniversary of the property closing.
Who are the parties to the Fideicomiso?
There are 3:
- Trustor (or Settlor) – the natural or legal person/entity that transfers assets into the trust (usually the seller)
- Trustee – the legal entity that holds title to the assets in the trust (usually a Mexican bank) and manages them according to the goals and purposes of the trust.
- Beneficiary – the person or entity that benefits from the trust
What are the costs associated with a Fideicomiso?
The costs vary from bank to bank, but will typically average $1,500 to set up the fideicomiso and an annual fee of ~$550 to maintain the trust.
What if the bank that holds the Fideicomiso goes bankrupt?
If this happens, the fideicomiso will be transferred to another bank. The property is not part of the bank’s assets, and the trustee won’t lose the property if the bank that holds the fideicomiso goes bankrupt.
The concept of a Fideicomiso makes me nervous. Can the Mexican government ever seize my property?
No – the fideicomiso is a necessary requirement for a foreign buyer to purchase property in Mexico’s restricted zone. The fideicomiso is a safe, legal trust allowing foreign buyers to enjoy full ownership rights.
Mexican real estate laws exist to protect both foreign and domestic buyers. Under the law, the Mexican government cannot seize your property.
What if I have more questions about buying in Mexico?
If you have specific questions about the fideicomiso, or about buying property in Mexico in general, call the trusted experts at Baja Realty Executives. We can answer any questions you have and guide you through the process of buying your dream home in Mexico.
