FREQUENTLY ASKED QUESTIONS
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If I am a foreigner, do I really own my beachfront property?
Yes, but not in your personal name, you own it under a Mexican Corporation. Keep in mind that you own 100% of the Mexican Corporation, so you own the land. You do NOT need to be a Mexican National or Citizen to be part of your Mexican Corporation. Your Mexican Corporation is recognized by the Mexican Government as a Mexican entity. This requirement is necessary as a foreigner to own a beachfront property in Mexico.
What is better the Mexican Corporation System or the Bank Trust System?
Until recently, the only way to own property on a Mexican waterfront was to form a Mexican trust, usually valid for 50 years, held in a Mexican bank. The bank is the Mexican Trustee and you are the beneficiary. For the privilege of being the beneficiary of this Trust, you pay $300-700 a year in maintenance fees. Also, you needed and still need (if you are setting up a trust) to hire an attorney to do the paperwork. The lawyer will collect around $2,000 US dollars, and then the bank will! Collect another $2,000 U.S. for the creation of the Trust. If you want to sell your land, you need permission from the bank and another trust would need to be formed. Once again, you will need to hire a lawyer, pay him again, pay the bank, etc. If you want to buy another piece of land, you will need to form another trust and go through the same process. It is slow and expensive.
You no longer have to go through all that. Today a Mexican Limited Company can be formed. You need at least two people on the board: you and a colleague, family, member, etc. This corporation may be 100% foreign owned. The Mexican Corporation owns the land, but you own the Mexican Corporation. The Mexican Corporation is a Mexican entity. The usual cost for this is between $2,000 and $3,000 US dollars to set it up.
You do not have to deal with the annual fees to the bank escrow. Also, your corporation may own more than one piece of land. You do not have to set up another corporation. Another added benefit is that with the formation of a corporation, you can obtain an FM-3, which is a temporary resident visa. Valid for one year, but you can renew it for up to five. This helps, especially if you want to bring your car from another country or if you want to bring household items. It can be a real benefit to have this!
You no longer have to go through all of that. Today you can form a Mexican Corporation. You need at least two people on the board-you and a colleague, family, member, etc. This corporation can be 100% foreign owned. The Mexican Corporation owns the land, but you own the Mexican Corporation. The Mexican Corporation is a Mexican entity. The usual cost for this is between $2,000-$3,000 U.S. to set up.
You don’t have to deal with the annual fees to the bank Trust. In addition, your corporation can own more than eleven pieces of land. You do not have to set up another corporation. Another added benefit, is that with the formation of a corporation, you can get an FM-3, which is a temporary resident visa. Valid for one year, but you can renew it for up to five. This helps, especially if you want to bring your car from another country or if you want to bring household items. It can be a true benefit to have this!
How can I own a beachfront property in Mexico as a foreigner?
In 1917 the Mexican Constitution was drafted and enacted. In the Mexican Constitution, there was a provision that created what is called the Restricted Zone. The Zone is 100 km (62 miles) from the borders and 50 km (31 miles) from the coast. In this Restricted Zone, only Mexicans could own land. This was done for his own protection and, at the time, it made sense.
Will the seller negotiate?
Some sellers will negotiate the price and some won’t. The main reason is that they have no reason to do so. When you choose not to pay the sale price, it is your decision and yours alone. You have absolutely no obligation to pay it. However, with all the (already funded) government infrastructure in place, waterfront property values are rising.
What is the price per square meter?
There is no price per square meter. That is NOT the way to value beachfront property. Beachfront property is valued according to the amount of beachfront, the quality of the beach (rock or sand), the elevation above sea level, the quality of the trees and foliage, the shape of the lot, the zoning, the nature of the neighborhood. , the susceptibility of beaches to erosion (avulsion) and flooding, the stability of the seabed, proximity to infrastructure, and last but not least, the sellers’ motivation to sell.
After Purchase Questions
How much are annual property taxes?
The annual real estate taxes in the Yucatan Peninsula in Mexico are truly remarkable. For an average waterfront lot, property taxes will be less than $200 USD per year, and depending on location, can be less than $50 USD per year.
When are real estate (property) taxes due and how do I pay them?
Tax notifications are not sent in Mexico. Upon request, a Mexican attorney can arrange to collect your tax notice each year, pay the tax for you, and advise you of the amount to remind you and handle the payment on your behalf.
Do I have to build within a certain period?
No. Unlike many places where you are required to build within a certain period of time, in Mexico, you can keep your land for generations if you wish.