While it is a little too soon to celebrate, it looks as if the Mexican Constitution will soon be modified to do away with the fideicomiso or bank trust! This will make it much less expensive for foreign buyers purchasing in Merida, at the beach and everywhere within 50 kilometers of the coast of Yucatan… or anywhere in Mexico. As an foreigner, you will now be able to buy and own outright (which you can already do outside of the protected zone) anywhere in Mexico.
Until proposed amendments are ratified, we still have to set up the bank trust. But once the law changes, as a foreigner, you will be able to simply close down your existing fideicomiso and will no longer have any annual fee.
Here is a translation of an article published recently in the Diario de Yucatan:
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On April 23, the full House of Representatives approved an initiative to reform Section I of Article 27 of the Constitution, which allows foreigners to purchase land housing exclusively for non-commercial purposes in a zone of one hundred kilometers along borders and fifty along the beaches.
PAN deputy from Yucatan, Raul Paz Alonzo, author of the initiative, together with the coordinator of the PRI representatives in the House, Manlio Fabio Beltrones, says that the document was referred to the Senate, which could approve it in brief, and now needs the approval of at least 17 state legislatures.
With these changes, says Paz Alonzo, foreigners (who he says are mainly retirees) will have legal certainty, allowing them to apply for mortgage loans in their home countries in order to acquire a second home in Mexico.
The American retiree market alone is worth $2,500 million pesos, says Paz Alonzo. He believes that Yucatan state will attract some of that market, leveraging the features of the Yucatan, such as climate, security, medical services and facilities such as golf courses, all of which are of great interest to retirees.
Also, explained the deputy, many of the Canadians who come to the Yucatan coast in winter will now be able to buy houses directly with bank loans in their own country. The same will be true for those who plan to open homes for the elderly on the Yucatan Peninsula or those who already have housing developments near the coast or within one hundred miles of the borders.
Under the new law, adds Paz Alonzo, selling Mexican properties in the United States will be easier and will put Yucatan on a par with Florida, increasing the Yucatan’s share with that large market of retirees.
Trusts At a Glance
Until these changes are made, foreigners are not allowed to own land in the “zone”; they can however buy the land through a fideicomiso. In this trust, the banks are listed as “owners” of the property purchased by foreigners.
This situation has led to non-Mexicans, in their capacity as trustees, dealing with high costs of setting up trusts and paying registration fees, as well as fees for paperwork, appraisals, taxes, permits and more.
Therefore, one of the objectives of the initiative is to eliminate the middleman, in this case real estate companies and banks.