Buying Real Estate in Mexico
Foreigners may acquire real estate in Mexico, and they have the same rights as Mexican citizens except for three principal restrictions:
• They cannot own mineral or water rights, or property for agricultural or forestry purposes.
• They must apply for a permit to own land.
• They may not own property within a 100-km band along the borders or a 50-km zone along the coasts.
All foreigners must obtain an additional permit from the Mexican Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores, or SRE). Indirect foreign ownership of land within the border and coastal zones can be arranged using a fideicomiso – a bank trust with a 50-year term. The bank holds legal title to the property, but the buyer is the beneficiary and may use and enjoy the property. A fideicomiso can also be used outside the restricted zones to establish multiple owners or successor rights. To prevent the assembly of large estates, Mexican law restricts property size, depending on the type of land involved. For example, the limit is 100 hectares for irrigated land and 300 hectares for non-irrigated land. Mexican real estate transactions can be complex, and foreigners should research potential property purchases carefully. Real estate agents are not licensed or regulated. Zoning laws may restrict the use of some properties, and financing is not generally available. It can be extremely difficult to evict existing tenants. Closing costs are usually borne by the buyer and include agents’ commissions and transfer taxes. The buyer also pays the fee for a notary public (notario), who must handle all real estate transactions.
Buying Time Shares in Mexico
Reports of problems with time-share arrangements (including the cancellation of contracts) have increased. Exercise caution whenever approached by persistent time-share representatives, since they may use pressure sales techniques, such as an offer of a free tour, breakfast or gifts. Salespersons may also approach you at the airport, on your way to your hotel. If you do attend a presentation on time-share opportunities and decide to make a purchase, carefully review the contract to ensure that promises made are confirmed in writing. Anything not included in the contract may not be honored. Do not reveal personal information nor show your passport or plane ticket. Only provide your credit card if you are certain you wish to make the purchase. Time-share companies have been known to request that their clients sign a waiver that prevents them from cancelling the contract. Such practices are illegal. Mexican law stipulates that consumers are legally entitled to cancel a time-share contract without penalty; however, the cancellation must be done within five working days starting from the day following the original date of purchase. Cancellations of contracts must be done in writing and must be presented directly to the time-share company. Keep copies of any correspondence. If you experience any difficulties in Mexico with a time-share company, you should immediately contact the Mexican consumer protection agency, Procuraduría Federal del Consumidor (PROFECO). Further information on PROFECO, including points of service throughout Mexico, can be found on their Web site.