Last week I started a post about frequent questions I get in Mahahual or about Mahahual, and my first post on how to get to Mahahual ended up running long, so I will continue today with some more questions I get all the time. I got this question from a blog reader the other day.
2) Can I own property and land, and can the government take it away?
Yes, Americans and other foreigners may obtain direct ownership of property in Mexico. However, under Mexican law, foreigners cannot own property outright within the restricted zone. Instead, a real estate trust must be set up to hold title for the foreigner.
The Mexican Constitution prohibits direct ownership of real estate by foreigners in what has come to be known as the “restricted zone.” The restricted zone encompasses all land located within 100 kilometers (about 62 miles) of any Mexican border, and within 50 kilometers (about 31 miles) of any Mexican coastline. However, in order to permit foreign investment in these areas, the Mexican government created the “fideicomiso,” which is, roughly translated, a real estate trust. Essentially, this type of trust is similar to trusts set up in the United States, but a Mexican bank must be designated as the trustee and, as such, has title to the property and is the owner of record. The Mexican Government created the “fideicomiso” to reconcile the problems involved in developing the restricted zone and to attract foreign capital. This enabled foreigners, as beneficiaries of the trusts, to enjoy unrestricted use of land located in the restricted zone without violating the law.
A “fideicomiso” is a trust agreement created for the benefit of a foreign buyer, executed between a Mexican bank and the seller of property in the restricted zone. Foreign buyers cannot own real estate in the restricted zone due to Constitutional restrictions. The bank acts on behalf of the foreign buyer, taking title to real property. The bank, as trustee, buys the property for the foreigner, then has a fiduciary obligation to follow instructions given by the foreigner who is the trust beneficiary. The trust beneficiary retains and enjoys all the rights of ownership while the bank holds title to the property. The foreigner is entitled to use, enjoy, and even sell the property that is held in trust at its market value to any eligible buyer.
The second way to buy property in Mahahual and Mexico if you are a foreigner is to form a Mexican corporation. Foreigners purchasing residential property can form a Mexican corporation. Mexican corporations can be 100 percent foreign owned, A Mexican corporation is a Mexican in the eyes of the law. So your rights are no different than a Mexican at that point. The corporation owns the house and the buyer owns the corporation. Also with a corporation, more than one property can be held by the corporation.
Since Mahahual is on the coast and the Mexican Caribbean, it is in the “Restricted Zone”, and you have to buy property by using either one of the two methods I have posted above.
So, to answer the question, Yes. if you are from the USA you can buy homes and property in Mahahual, and the government cannot take it away from you. All real estate transaction in Mahahual are safe and totally legal in the eyes of the Mexican Government.
The only way the government can take land is as the same as it is in the USA, through Eminent Domain, for public purposes. In Mexico if the land is taken by the government, swift and fair market value must be paid, together with accured interest.
Thanks for reading, I hope this answers any questions anybody may have about buying property in Mahahual, and clears up the myths you read on the internet. If you need any more information go to our website. http://www.mahahual-propiedades.com/
Stewart Rogers USA-South Carolina