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 Puerto Vallarta Real Estate | April 2007 
Owning a Luxury Vacation Home in Mexico - Risks and Alternatives
 Helium Report
Can foreigners own property in Mexico? Helium Report researched the details of property ownership in Mexico to understand the challenges associated with buying a fractional quote in a development or a vacation villa.
Foreigners can own property in Mexico, but not in the so called "restricted zones," which include all land located within 100 kilometers (about 62 miles) of any Mexican border, and within 50 kilometers (about 31 miles) of any Mexican coastline. To allow foreign direct investment in these areas the Mexican government created the "Fideicomiso," which is a bank-held trust where the foreigners are beneficiaries. The Mexican bank must be designated as trustee, while the trust beneficiary retains all rights of ownership - including renting, bequeathing, selling, or loaning the residence.
When buying a fully-owned vacation property in Mexico, Helium Report urges you to retain a Mexican attorney to draw up the contract and to review the conditions and terms of sale. This will be in addition to any professional services you decide to employ in your country of residence. Real estate agents and brokers are not legally licensed in Mexico. Consequently, a foreign buyer cannot always depend on the normal safeguards that would be applied to real estate transactions in the United States.
How is the fractional ownership transaction different? Dealing with a US-based company, your only interface will be in the United States, while the developer side will deal with the bureaucracy on the Mexican side. This will somewhat expedite the process and simplify things for the buyer.
In the end, Helium Report found that despite the heavy regulations and the bad reputation real estate ownership in Mexico has, buying a fractional property in Mexico is a very similar experience to buying elsewhere in the world. In particular, the currency risk and political instability factors should always be considered whenever acquiring properties abroad. To receive Helium Report’s Decision Guide to Private Residence Clubs please send an email at tips@heliumreport.com and they will email you the PDF. |
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