How to Buy Real Estate in Cancun
Acquisition of Land, Houses or Condominiums Located in the State of Quintana Roo, Mexico by Foreign Individuals or Companies
For historical reasons, Mexican law establishes restrictions on foreign individuals or companies that acquire real estate within a 100 kilometer (60 mile) strip of the land along the country’s borders and 50 kilometers (30 miles) from coastal areas. However, there are several legal mechanisms through which these foreigners may use and dispose of this real estate as their own property with the minor limitations and procedures that are described as follows:
Trust
Foreign individuals or companies may hold property through a trust contract signed before a Mexican notary public, designating a Mexican credit institution such as a Bank, Insurance Company or Bond Company as Trustee, who will hold title to the real estate for the duration of the Trust: 20, 30, 50 or even 99 years. These trusts are indefinitely renewable for similar periods of time, if you so wish. The foreign individual or company is designated as the trust beneficiary with practically all the attributes of an owner since they may use the property without limit, rent it or even sell it by instructions issued to the trustee and the property is immediately conveyed to the new owner.
Fees must be paid to the Trustee to set up the trust and the Trustee also charges yearly administration fees, which in practice are not very high, but depend on the property’s value.
Condominiums and villas are sold through this legal figure in what is known as the fractional system, by which up to 12 persons may acquire a property for life, and may even designate substitute trust beneficiaries as their heirs.
Trust Costs
· Acceptance of the Trust by the banking institution $450*
· Annual fees $550*
· Authorization from the Secretary of Foreign Affairs $1,415*
· Filling the agreement with the National Registry of Foreign Affairs $335* *Aproximate prices.
Mexican Company
Under the terms of recent reforms in legislation regarding commercial entities, a Mexican corporation with 100% foreign capital may acquire fee simple title to property in the restricted coastal areas, especially in the state of Quintana Roo. The partners of said corporations have unlimited use of the property and may rent or sell it through the corporation.
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