Can foreigners own property in Mexico?

Thinking of Buying Property in Puerto Peñasco, Mexico? Here’s What You Need to Know!

Puerto Peñasco, also known as Rocky Point, is one of the most sought-after beachfront destinations for Americans and Canadians looking to invest in vacation homes, rental properties, or retirement havens. If you’re considering buying property in Mexico, you might be wondering: Can foreigners own property in Mexico? The answer is a resounding YES! However, the process differs slightly from what you may be used to in the U.S. or Canada. Let’s break it all down.

Can Americans and Canadians Own Property in Mexico?

Absolutely! Foreigners, including Americans and Canadians, can own property in Mexico, but there are two ways ownership is structured depending on the property’s location:

Direct Ownership (Fee Simple Title): Available for properties located outside the Restricted Zone, which includes areas beyond 50 km (31 miles) from the coast and 100 km (62 miles) from international borders.
Fideicomiso (Mexican Real Estate Bank Trust): Required for properties within the Restricted Zone, which includes all beachfront properties in Puerto Peñasco.

What is a Fideicomiso (Mexican Real Estate Bank Trust)?

A fideicomiso is a secure and legal real estate trust agreement that allows foreigners to purchase property in Mexico’s Restricted Zone while retaining full ownership rights. Here’s how it works:

A Mexican bank (trustee) holds the title to the property on behalf of the buyer (beneficiary).
The buyer has full control over the property, including the right to sell, lease, remodel, inherit, or transfer ownership at any time.
The trust is renewable every 50 years and can be passed down to heirs.
Trustee banks include BBVA Bancomer, Banorte, Santander, Scotia Bank, and others.

Why Does Mexico Require a Fideicomiso for Foreign Buyers?

Mexico’s Constitution prohibits foreigners from directly owning land in the Restricted Zone to protect national security. However, recognizing the importance of foreign investment, Mexico introduced the Foreign Investment Law in 1972 (amended in 1993) to allow foreign ownership through the fideicomiso system. This trust ensures a safe, secure, and fully legal way for non-Mexican citizens to own property in coastal areas like Rocky Point.

Step-by-Step Process to Buying Property in Puerto Peñasco

Find Your Dream Property – Work with a local real estate expert like myself, to identify properties that match your needs and investment goals.
Make an Offer – Submit a purchase agreement using a standard AMPI contract (Asociación Mexicana de Profesionales Inmobiliarios).
Open Escrow & Due Diligence – Secure your funds in a third-party escrow account while legal checks and property inspections are conducted.
Fideicomiso Setup – Your attorney and a Notario Público (government-appointed notary) will handle the legal process, including:
- Obtaining a Certificate of No Liens from the Public Registry.
- Issuing a Letter of Instruction to the trustee bank to transfer the trust rights.
- Verifying that all permits and zoning regulations are in place.
Closing & Property Transfer – Sign the trust agreement, pay closing costs, and register the deed with the Public Registry.
Move In & Enjoy! – Possession is granted immediately upon signing, even though deed registration can take up to six months.

Understanding Closing Costs in Mexico

Buyers should budget 4-5% of the property’s purchase price for closing costs, which typically include:

2% Transaction Tax (similar to a transfer tax)
Bank Trust Setup & Annual Fees
Attorney & Notary Fees
Certificate of No Lien & Escrow Expenses
Foreign Affairs Permit (paid outside of escrow upfront)

Required Documents for Buyers & Sellers

To comply with Mexican legal and tax regulations (SAT – Mexico’s IRS), buyers and sellers must provide:

Valid Passport (Color Copy)
Driver’s License (Color Copy)
U.S. Social Security Number (for American buyers)
RFC Number (for Mexican residents or citizens)
Marriage Certificate (if applicable)
Birth Certificate & Divorce Decree (if applicable)
Social Security Card
Recent Utility Bill (not older than 3 months, proving current address)

Why Invest in Puerto Peñasco Real Estate?

Booming Tourism & Rental Market – A top vacation destination for Americans and Canadians.
Affordable Oceanfront Properties – Lower costs compared to the U.S. and Canada.
Proximity to the U.S. – Just a short drive from Arizona!
Strong ROI Potential – Ideal for vacation rentals and long-term investment.

Work with an Expert in Puerto Peñasco Real Estate

Navigating Mexican real estate laws can be complex, but with the right guidance, buying property in Puerto Peñasco is safe, straightforward, and highly rewarding. As a trusted local real estate professional, I can help you:

Find the best beachfront and investment properties.
Connect with reliable Mexican attorneys, Notarios, and banks.
Guide you through the entire purchase process with confidence.

Ready to start your journey to owning property in Mexico? Contact me today!

Alicia Villarreal
Broker/Owner, ABR®, APB®
Soluna Peñasco Realty
Tel: 480-300-9707
www.WelcomeToRockyPoint.com