The Mexican real estate market is attractive to foreigners, but there are key restrictions that regulate the purchase of land in certain areas. This blog focuses on two key issues: restricted zones and ejido land, both of which are governed by laws that seek to protect Mexico’s territorial heritage.
Restricted Zones For Foreigners
The Mexican Constitution, in its Article 27, establishes that foreigners cannot acquire property directly in the restricted zones, which include:
50 km from the coast.
100 km from international borders.
To purchase in these zones, foreigners must establish a bank trust.
What is a bank trust?
It is an agreement where a Mexican bank retains title to the property, but the foreigner has full rights of use and enjoyment, including the possibility of selling, inheriting or renting the property.
Duration: Up to 50 years, with the possibility of renewal.
Legal security: Guarantees control and legal protection of the property.
Examples: In cities such as Cancun, Los Cabos and Puerto Vallarta, properties acquired by foreigners are usually under trust due to their location in restricted areas. According to the National Bank of Mexico, more than 60% of foreign properties in tourist areas are under this scheme.
Ejido Lands
Ejidos are communal lands used for agriculture, managed by ejidatarios. They represent more than 50% of the national territory and are subject to significant restrictions.
Restrictions on ejido lands: They cannot be sold to foreigners unless privatized. Ejido lands cannot be acquired by foreigners until they become private property.
Privatization process involves the approval of the ejidatarios and the National Agrarian Registry. Only after this process can the land be legally sold.
Associated risks: Buying ejido land without privatization is illegal and carries high risks of losing the investment.
Key facts: 30,000 ejidos in Mexico cover more than 50% of the territory.
The privatization process can take years and requires the approval of 75% of the ejidatarios.
Buying property in Mexico can be an excellent investment, but it is crucial to know the legal restrictions and processes. In restricted areas, a bank trust is the safest method, while acquiring ejido land requires a long-term privatization process. According to the Mexican Association of Real Estate Professionals (AMPI), coastal and border areas account for 40% of real estate sales to foreigners.
When considering the purchase of land in Mexico, having specialized legal counsel is essential to ensure a safe investment and compliance with local regulations.