New Zealand Embassy Mexico City

Acquisition of real estate in Mexico

Acquisition of real estate in Mexico

Foreigners may lease and own real estate and other properties in Mexico. However, there are several guidelines that must be taken into account before purchasing real estate.

Article 27 of the Mexican Constitution grants the Mexican Nation ownership of the land and water within the territory and provides that the Nation shall oversee the transfer of ownership rights to individuals, by creating private property.

Although Section I of the above article grants the right to acquire the dominion of land and water only to Mexican individuals and companies, it also gives the State the power to grant the same right to foreigners, subject to the condition that these foreigners agree before the Ministry of Foreign Relations to consider themselves as Mexican nationals regarding the acquired property and not to invoke the protection of their country of origin with respect to the same. If the covenant is breached, all rights to such property shall be reverted to the Nation.

A foreign individual or company may directly own land in Mexico except in what is described by Article 27 of the Mexican Constitution as the "restricted zone," a strip of land within one hundred kilometres of the international border and fifty kilometres of the seacoast.

However, foreign individuals or companies and Mexican companies fully owned by foreigners may purchase real estate for residential purposes within this "restricted zone" through a trust fund for fifty years. In this kind of trust fund the bank will retain the property title but the foreigner is the beneficiary and may use and enjoy such premises and may sell or even inherit the rights to it. However, all operations regarding the property must be notified and approved by the bank.

Note: Mexican companies with 100 percent foreign capital may own property directly in the "restricted zone" for other non-residential purposes.

There are other restrictions to be aware of when trying to acquire property for agrarian, livestock, and forestry purposes: foreign companies may own property for this objective and foreign individuals should observe the land size limitations.

The acquisition of real estate must be conducted before a public notary, judge or property registrar officer and two witnesses when its value does not exceed the equivalent of 365 times the daily minimum wage. For higher values the transaction must be conducted by a Public Notary and registered in a deed. The parties should pay taxes in a real estate purchase.

The acquisition may be undertaken personally or through an agent with representation (power of attorney valid according to Mexican laws).

With the purchase of property in Mexico you will be considered as a Mexican citizen in connection with the property, meaning the diplomatic protection from a foreign government will not be invoked, and you will have to submit to the jurisdiction of the Mexican courts in all cases, under the penalty of losing the property.

On purchase of property in Mexico it should be verified that the property being bought has no mortgage and that the seller has paid the real estate property tax and water contribution fees. For further assistance regarding this matter please contact a lawyer.

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