Investing

Can You Buy Ejido Land in Mexico?

September 28, 2022
Investing

Can You Buy Ejido Land in Mexico?

Published at : September 28, 2022

Can You Buy Ejido Land in Mexico?

Cautionary Advice for Foreigners Investing In Mexican Real Estate

 

If you’ve made the decision to buy land or property in Mexico, the last thing you want to experience is some form of land title dispute after you’ve already spent your money. 

 

However, this is precisely what can happen if you don’t know what you’re doing, or if you are given bad advice. Although it is extremely rare, if you accidentally purchase the wrong kind of “Ejido” land, it is possible for a Mexican court to invalidate your ownership after the fact.

 

To understand a little bit more about why you should never consider buying property in Mexico without consulting Mexican real estate experts you can trust, let’s get into the history of Ejido land, what it is, and why it was created in the first place. 

What is Ejido Land?

The Mexican Constitution’s Article 27 facilitated the creation and subdivision of agrarian lands in order to benefit their citizens. Beginning in 1917, Mexico began helping its farmers by providing them with a beneficiary interest in government land, which was divided into parcels called “Ejidos.” 

 

Those that chose to live on the land (called “ejidatarios”) were allowed to live, farm, and construct dwellings, and these tracts of land are essentially managed and operated in a similar way to farm cooperatives. However, ejidatarios are not permitted to own the land, just to possess and benefit from it during their lives. 

 

Because ejidatarios do not own the land, they cannot sell the land, or subdivide it.

 

Now, many years later, much of that land is very valuable, as it is near coastlines, borders or rapidly developing areas, which can lead to confusion for inexperienced foreigners that are interested in buying their first dream property in Mexico

Can Anyone Buy Ejido Land?

 

It is actually possible to legally purchase Ejido land by going through a complex and time-consuming process. However, buying Ejido land - even legally - only allows you to possess the land, not own it. From an investment perspective, this would be a poor decision. 

 

The only way you could theoretically purchase a lot of land upon which to build would be to change the status of the land. It is possible to “regularize” Ejido land (thanks to a 1992 amendment to the Mexican Constitution) in order to privatize a parcel of it for sale. 

 

Unfortunately, the several steps involved in doing this, it can take months or years, and depends upon the agreement of large groups of people. That isn’t to say that it is impossible. There are in fact many examples of this kind of land being privatized, but it often involves large-scale developers building residential communities or resorts. 

How Can I Safely Buy Land in Mexico?

 

Don’t worry, foreigners can buy property and land in Mexico, and it’s not as hard as you might think. The process is, however, a little bit different from the process in Canada, the United States or Europe

 

Foreign buyers are required to enter into a bank trust agreement called a fideicomiso to complete a purchase. Using this mechanism, foreigners can purchase, live in, rent, sell, and even will their property to their heirs. 

 

A fideicomiso, which is a bank trust created by the Mexican government, allows the buyer to have the title to the property held by an authorized Mexican financial institution. As the beneficiary of the trust - just like in Canada or the U.S. - your property cannot be sold or modified without your permission.

 

We go into much greater detail in our blogs "Buying a Vacation Home in Mexico" and "How to Buy Real Estate in Mexico," but in the end, your best bet (after reading those articles) would be to connect with a partner like Zisla to take you through the process personally.

 

We are a reputable real estate group that knows the Mexico real estate market well, and we can help demystify the entire process so that you can feel safe and secure in your investment. Connect with us today, and find your dream home in Mexico sooner than you think by calling 1-877-515-ISLA (4752), or emailing our team at [email protected]

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