How many times have you heard,  you can’t own property in Mexico, you can only get a long term lease!


Real property ownership is not the same in Mexico article 27 of the Mexican constitution of 1917 decrees that no foreign person may be registered as the owner of any real property that is located within the “restricted” zone.  This zone is an area fifty kilometers (about thirty miles) wide along the coastlines and one hundred kilometers (about sixty miles) wide along the United States and Guatemala, Belize borders.  It covers 43% of the entire country!


It includes our favorite beach cities such as Puerto Penasco, Mazatlan, Manzanillo, Puerto Vallarta, Ixtapa-Zihuatanejo, Acapulco, Cancun and the entire Baja peninsula!


Thus, from 1917 until a presidential decree in 1972, the only way a foreigner could own his dream home on a tropical beach in Mexico was to put it in the name of a Mexican citizen.


Having someone else own your home is always risky business!

Jose, Juan, Manuel or whomever is that sincere and gracious friend who said: “Sure! You can put your house in my name, I don’t mind!”

What happens: if Juan, Jose, Mr. Nice guy wakes up one morning and decides that he likes the property and the riches it represents better than his foreign friend who had trusted him?

Or, as has happened many times, Juan, Jose-the owner of record-passes on to the next life and his children aren’t so happy to honor “gentlemen’s agreements” made before their time?


Mr. Foreigner then finds that the tropical paradise into which he had sunk his life savings is not his, and can never be his.


Luis Echevierria, president of the republic of Mexico in 1972, realized that United States and Canadian tourist and retirement dollars were too important to the economy of his country to allow these ownership abuses to go on any longer.  In 1972, Mr. Echevierria established the Ley de Fideicomiso (The Trust Law) which provided for the naked title to be held by a Mexican bank as trustee and for the foreign purchaser who was then named beneficiary under the trust.


In other words, a trip to the recorder’s office would show Banamex, Bancomer, or any one of several other banks as the owner of record as trustee  and Joe Smith or Jane Doe, a foreigner, would be named as holder of the beneficial interest.


This was the Mexican way to avoid making a constitutional amendment. For the first time since 1917, a foreigner could feel safe buying and occupying property in Mexico and know that his rights and investment would be recognized by the authorities.


And very importantly, the beneficiary of the trust has exactly the same rights of use of his property as any Mexican national.   The property may be sold, rented, modified or even torn down—subject only to the local rules and zoning regulations that any owner must follow.


Don’t be misled! Insist upon having title in your name as the beneficiary of a Mexican bank trust, a Fideicomiso, if you are acquiring property in the “restricted” zone.