Owning thru The Fideicomiso

In Los Cabos, foreigners can buy residential property as long as they own it in a trust known as a Fideicomiso. This trust, similar to a living trust, exists to hold title to one piece of property. If the property is within 31 miles from the seacoast and 62 miles from an international border, this is the only way in which you can take title.

In Los Cabos, that defines all of our real estate. But we're not complaining because not only is the Fideicomiso system safe, it offers tax and estate planning advantages.

Yes, you are the deeded beneficiary of a trust (Fideicomiso) inscribed in the Public Registry. It is a stronger document than a Mexican title since it is not subject to embargo or confiscation. The trusts are 50 years at a time and can be renewed indefinitely.

What you need to know are the terms of the trust. In very simple terms, the bank holds the property in trust for you. Legal title is placed in the name of the bank selected by the buyer as his trustee. The bank administrates the property in accordance with the instructions of the buyer/beneficiary. You have the rights to buy, sell, rent, improve, build upon or pass the property on to your heirs without probate. All you have to do is maintain the trust annually with the Mexican bank and renew it every fifty years.

Backing up the trust is your title insurance policy. We have three companies here that offer the same policies you are familiar with in the U.S. and Canada. The company that covers your primary home will provide identical coverage on your vacation home here in Mexico. Unlike the U.S., where title insurance is often mandatory, in Mexico it is an option. However, we always advise our investors to get title insurance. Through this Trust process (Fideicomiso) owning property in Mexico is as secure as owning property anywhere