abc on property purchase
by foreigners in puerto vallarta
Spending your retirement abroad is a trend that will not disappear soon. After reaching third place last year in the ranking, Mexico jumped to the number one, displacing Panama. More than one million Americans are now living in Mexico, enjoying their lowest cost of living, sunny days and the proximity to the United States. The currency Exchange rate has made the cost of living even more attractive this year.
Real estate in Puerto Vallarta is booming and also along the edges of Bahía de Banderas. The construction rhythm today is higher than at any other time in the past. It starts in the south, past Mismaloya in Jalisco and continues all the way to Punta Mita in the northern Nayarit state.
The developments in Nuevo Vallarta are now breaming with life, new homes, condos, resort hotels and golf courses.
The procedure that foreign persons must take in order to acquire the domain or, as the case may be, the use and enjoyment of real estate property within Mexican national territory is subject to a process on which the most relevant criteria is the location of the property, considering several factors, such as:
- The place where the property is located and its destination (residential or non-residential)
- The nature and nationality of the purchaser of the property.
Finally it is advisable to go to your Notary for advice before any real estate acquisition, reason why we have requested the participation of Lic. Cristina Vilchis and Lic. Juan Carlos Castro, experts in real estate operations in Mexico and Puerto Vallarta with more than 10 Years of experience, both for domestic and foreign, who have helped us solve the most frequent questions on this subject.
Can foreigners legally acquire Real Estate in Mexico?
As a general rule, foreigners can acquire real estate in Mexico, subjected to certain conditions laid down on the law. Such conditions depend on whether the property is within or outside the restricted area (100 km border and 50 Km on beaches).
If the property is outside the restricted area, foreigners may directly purchase any property, by means of an agreement with the Secretary of Foreign Relations in which the foreigner accepts to be considered as national (as if it were Mexican) with respect to the rights and obligations related to the property acquired; As well as agreeing to waive the possibility of requesting the protection of their government of in relation to his Property rights.
If the property is within the restricted area (100 Km in borders, 50 Km on beaches), the foreigner can acquire the rights of the property as trustee, through a trust of restricted area; For which they must enter into a trust agreement with a banking institution acting as fiduciary, which must previously obtain a permit from the Ministry of Foreign Affairs for this purpose.
What is the restricted area?
The restricted area is the strip between the Mexican borderline and 100 km to the interior of the country; Also, between the coastline (beach) and 50 km to the interior of the country.
What is a Restricted Area Trust deed?
It is a trust through which foreigners are allowed to acquire the use and enjoyment of a property located in the restricted area while the fiduciary (banking institution) holds the ownership of the property.
It is important to note that even though the fiduciary (the bank) holds the legal ownership of the property acquired by the foreigner, it doesn’t have the right to dispose of the property without the written permission of the trustee (the Foreigner who acquired the property), so that the foreigner is who in all has the right to legally dispose of the property either to transfer the ownership of the property, give it in guarantee or any other. etc.
When is it necessary to use a restricted zone trust?
A restricted zone trust is necessary when a foreigner intends to acquire a real estate within the restricted area.
How Long Does a Restricted Zone Trust Last?
A restricted zone trust can last for 50 years, which is the commonly period of time established by the Ministry of Foreign Affairs, which can be extended for the same period upon request.
Is it reliable to acquire property through a restricted zone trust?
The answer is yes. Restricted Zone Trust provides total Legal security since they are duly regulated by law, as well as being the best option for a foreigner who intends to acquire real estate.
Can I inherit my Real Estate in Mexico?
Yes, a foreigner may inherit his property in Mexico, whether acquired outside or inside of the restricted area.
What is a Public Notary?
The public notary, is a legal professional, invested with public faith by the State, whereby, it provides legal certainty to the facts and acts in which he acts as a notary, as well as to the acts and documents that are signed before him.
Is it necessary to go to a public notary in order to acquire a property?
Yes, since to formalize the acquisition of any property, either through direct sale or indirect (through a restricted zone trust), it is required to have the Public Notary subscribe and sign the corresponding public deed.
What is the process for buying in Puerto Vallarta by a foreigner?
Firstly, it is important to take into consideration that Puerto Vallarta is located within the restricted area, so that an alien is found unable to acquire a property directly, but can do so through a restricted zone trust.
Do foreigners need to hire a lawyer to acquire a property in Mexico?
To acquire a property in Mexico it is not necessary to hire a lawyer but it might be more convenient; Since having an attorney allows you to have at all times a professional who advises you and represents you throughout your purchase process, with which you acquire your property fully advised and in a more secure manner.
Once considered all of the above, the purchase process in general terms is the following:
- Identify the property to be acquired
- Submit a purchase offer specifying the price offered and the conditions under which the property is intended to be acquire.
- If the offer is accepted, a promise of sale must be signed by both parties, specifying the conditions of the purchase, which should include price, form of payment, property description, delivery of possession, date of deed and public notary information.
- Once the promise of sale is signed, you are also required to present the file for the deed, which is composed mainly of documentation relating to the buyer and seller, the property, the trust agreement and the payment.
- Present yourself at the signing of the corresponding public deed on the day and time indicated in the office of the designated public notary.