Buying Land in Mexico - Travel Article

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By:Mark Shead

A lot of people have heard that people from the U.S. can't buy property in Mexico. This isn't entirely true. In fact the only real regulations are on the near the border and coast. These areas are called the "restricted zone". The "restricted zone" is the area within 100 kilometers of any Mexican border and within 50 miles of any Mexican coastline.

Originally the "restricted zone" was created to protect Mexico from foreign attack. The goal was to keep any foreigner from owning land that could be used to bring in an army and launch an attack on Mexico. This was written into the Mexican Constitution in article 27. The constitution was signed in 1917 and made a lot of changes to who could own property.

From briefly look at this section of the Mexican constitution from 1917, it looks like it took a lot of land away from people. It changed the concept of land ownership to one where the government actually owns all the land and even though they sell it to individuals for use, the government can get it back if they want it. From what I've seen this doesn't happen very often and when it does it is similar to what happens in the U.S. when they put in a highway through an area that used to be private property--the government has to pay a reasonable price for the land.

Other than the "restricted zone" foreigners can own land subject to Mexican law. Just because you are a U.S. citizen doesn't mean the land becomes U.S. property. It is treated just like a Mexican citizen owned it.

If you are looking to buy property in Mexico keep in mind that there is no type of real estate license required. Anyone can sell real estate and there isn't any type of code of ethics that they all agree with. You will want to work with someone trust worthy.

If you want to purchase property in the "restricted zone" there are ways to do it. The Mexican government knows that selling land on the coast is a great way to bring in money not just for the sale of the property but for the local economy. U.S. citizens coming to Mexico and spending lots money are a great way for the country to profit financially. However since the law about the "restricted zone" is written into the constitution it would take a lot of political work to change.

The Mexican government came up with a way to work around the constitution. You can create a legal entity in Mexico and use it to buy the land. Since the land is owned by a Mexican entity, this fulfills the constitutional requirements. If this entity is a trust, a foreigner can be named as the beneficiary. The trust is administered by a Mexican bank which is obligated to act on the behalf of the beneficiary of the trust.

A Mexican corporation can own land and Mexican corporation can be 100% owned by a foreign investments. This should allow a corporation to buy land in the "restricted zone". However the corporation can only by land that is not for residential use and there are other restrictions on what the land can be used for. It appears that if you created a corporation and bought a shop that had living quarters above it, you might be able to live in above your shop, but I'm not sure.

If you are looking to buy land in Mexico make sure you find someone who you can trust who can help you through the process. Law change and just because something is legal to do doesn't mean it is the easiest way to go about purchasing property.

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The Mexico 501 site offers insights into living and running a business from Mexico. You can find more helpful articles at http://www.mexico501.com. You can find more information about purchasing real estate in mexico at Mexico501.com as well.