What are the Risks of Buying Real Estate in Mexico?
What are the Risks of Buying Real Estate in Mexico?
Many of us have had the dream of buying real estate in Mexico. It's a wonderful and tempting idea! Whether the dream involves retirement on the beach in Playa del Carmen, a condo in vibrant Merida, or anything in between, there's nothing quite like the fantasy of trying out something new. Imagine packing your winter coats and boots into long-term storage? It's almost too good to be true!
However, as you would for any major investment, it's important to do your due diligence before a purchase. And one of the first questions someone might ask themselves is: "Is it safe to buy real estate in Mexico?"
If that question sounds familiar, we have some good news. It is safe to buy property in Mexico!
Foreigners can buy and sell property with ease, there are only a few special rules you need to follow when buying property, and strictly from an investment point of view, Mexican real estate has a great deal of upside potential.
In fact, buying one of the available houses for sale in Mexico could be one of the best decisions you ever make!
Can Foreigners Buy Property in Mexico?
Yes they can. Anyone that is not a Mexican citizen is permitted to purchase property, as long as they adhere to the conditions contained in the 1993 Foreign Investment Law of the United Mexican States. As far as property is concerned, foreigners can purchase, live in, rent, sell, and even will their property to their heirs, as long as they use a fideicomiso.
A fideicomiso is a bank trust sanctioned by the Mexican government, and a trust in Mexico works the same way a trust does in Canada. Under this arrangement, the title to the property is held by an authorized Mexican financial institution. As the beneficiary of that trust - just as it is in Canada - you cannot have your property be sold or modified without your express written permission.
So why does Mexico use a trust system for foreign buyers? Mostly as a way for the Mexican government to enable foreign property investment without having to rewrite their entire Constitution, which previously forbade foreigners from buying property in the “Restricted Zone,” which is defined as any area within 50km of the coast or 100km from the national border.
Today, these trusts operate on 50-year terms, are renewable and transferrable, and hold a number of advantages that you can read about in our other blog called: "How to Buy Mexico Real Estate." The main takeaway is that foreigners can buy property anywhere they want by using a fideicomiso, even in the Restricted Zone.
Can I Lose Ownership of My Property in Mexico?
No. Unfortunately, this question is more common than it should be, since the risk of having your property taken away from you is nothing more than an enduring myth. This idea may have originated from a time before Mexican real estate laws were liberalized in the early 1990s.
In the past, foreign buyers were not allowed to purchase land that fell within the Restricted Zone. However, those laws were changed almost 30 years ago, and it is completely legal and safe for foreigners to buy Mexico real estate.
Rest assured, as long as you followed the law and used the services and advice of a reputable real estate group that knows the Mexico real estate market well, the Mexican government will never take ownership of your land or property in Mexico.
Always Use a Reputable Real Estate Professional
In Mexico, property rules and regulations are a little bit different than they are in Canada or the United States. For that reason, it's always a good idea to work with an experienced real estate company that is familiar with Mexican law so that you are protected with the most accurate and up-to-date information.
For example, did you know that the only binding contracts in Mexico are those written in Spanish? That means that any sales contract, no matter how official it looks, is not valid or legally enforceable if it is written in English. Also important to note: if a contract is written in both languages, they must be an exact translation of each other. If discrepancies exist, only the clauses in the Spanish version are valid.
Another interesting difference of Mexican property rules has to do with the sale of planned developments. Mexican real estate developers are not required to capitalize their developments prior to offering them for sale, which is slightly different than it would be in Canada or the United States. For this reason, foreign buyers are always better served by using an experienced property team that knows the ins and outs of the law, is familiar with any potential construction-related challenges buyers can face.
This is another reason why you should work with a group you can trust like Zisla. When considering buying any condos, villas or land in Mexico, knowledge is power, and Zisla is a team with a lot of it! Their experience helping their clients buying property in Mexico is second to none, and they only work with developers they trust, and that have a history of success.
Get in Touch with Zisla Today
For the best advice - and for access to the Mexico real estate experts with the most experience - call or email the professionals at Zisla today. They can help demystify the process and help you learn everything you need to know about buying property in Mexico.
The goal at Zisla is to help you feel safe and secure in your investment, and to help connect you with the dream home in Mexico you've always wanted! Call at 1-800-558-1768, or email the team at [email protected].