Puerto Vallarta, Mexico – Our last post from our Tropicasa Tips series explained how to save on your annual water bill with SEAPAL. This week, we’re offering an easy-to-understand answer to one of our most frequently asked questions – what is a fideicomiso and how does it apply to purchasing real estate in Mexico?
A fideicomiso is used in Mexico to allow foreigners to purchase property in coastal areas and near borders. It is a trust structure which allows foreigners to hold property rights in a way that complies with Mexican law, which generally prohibits non-Mexicans from directly owning land in these restricted areas.
With a fideicomiso, the buyer establishes a trust with a Mexican bank acting as the trustee. The foreign buyer, referred to as the “fiduciante,” retains full beneficial use of the property. This means they have the right to occupy, rent, sell, or improve the property as they see fit, while the bank holds the title. The fideicomiso term typically lasts for 50 years and can be renewed indefinitely, providing long-term security for foreign property owners.
The process begins when the buyer and the bank agree on the trust terms, including fees, which can range from $500 to $1,000 USD annually, plus any initial setup costs. Once the fideicomiso is established, the bank will ensure all legal compliance, making the process smoother for the foreign buyer and ensuring their interests are secured.
One of the main benefits of a fideicomiso is the level of protection it provides foreign investors. The trust structure provides peace of mind, as the property cannot be seized or sold without the owner’s consent. Additionally, the fideicomiso allows for estate planning advantages, as the property can be passed on to heirs without going through probate.
If you have further questions regarding the fideicomiso structure, any of our Tropicasa agents will be happy to provide more information. And check in next week when our how-to series will have tips for how you may be able to save more by applying for a special discount card for resident senior citizens.
Tropicasa Realty has been a trusted name in Puerto Vallarta real estate since 1997. Affiliated with top industry associations, including “Who’s Who in Luxury Real Estate”, our agents have over 275 years of combined real estate experience and all Tropicasa agents are AMPI members. Find the expert Tropicasa team at their Romantic Zone Office at Pulpito 145-A, call (322) 222-6505 in Mexico or 866-978-5539 toll-free from the U.S., or visit Tropicasa.com.
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