Whether you’re seeking a vacation home, a place to retire or looking to expatriate for other reasons, Mexico is an obvious choice. However, moving to a new nation, even temporarily, is an undertaking few people are familiar with offhand. Buying land is a complicated process when it’s right down the street, but what about another country? Are you even allowed to purchase a property if you’re not a citizen? There are so many questions, and answers can be challenging to find. I’ll walk you through the answers step by step, so you know everything that matters before you look at investing. Fortunately, with this uncomplicated guide, you’ll have a path to purchase your ideal Mexican home. Everything you need to understand is right here, laid out so you can get from point A to the final destination as quickly as possible.
Can Americans own land in Mexico? Americans can own land in Mexico. However, before nineteen seventy-three, no foreigner was allowed to hold property within Mexican borders. Fortunately, times change, and so do the laws governing property ownership. Although there are numerous steps to achieve your goal, you’ll find the process isn’t as tricky as it once was.
How to Buy Land in Mexico
Back in nineteen-seventeen, the Mexican government declared all land Ejido, or communal land to be used by all (citizens), effectively making it illegal for anyone, American or otherwise, to own property. However, like most places, Mexico has evolved and changed a lot in the past century-plus. Citizens were allowed to own land before foreigners.
In nineteen-seventy-three, Mexico passed the first Foreign Investment Law. This limited land sales to non-restricted zones, but also opened up some of the lands to foreign purchase. Restricted Zones are purchasable since another change in nineteen-ninety-three, but there are limitations.
Those seeking to buy land in Mexico will find there are numerous possibilities. Additionally, the investment value is well worth the purchase price of any parcel. However, the type of land you buy matters a great deal as different properties have differing standards for foreign investors.
It’s vital to check the land you’re interested in to ascertain it’s status. If the property is Ejido, you cannot own it. Likewise, if it’s in the Restricted Zones, some additional rules apply. We will get into that later.
Steps to Buy Land in Mexico
It is always a good idea to hire a real estate attorney before buying land in a foreign country. They will know all the pertinent details about these steps and can assure you of a clear title. When you purchase property with a disputed claim, you may find yourself in a tricky legal mess later if a previous claimant tries to press their rights to the land. In general, follow the following simple steps to acquire your property.
- Find and thoroughly research the parcel of land you wish to purchase. Make sure you find a parcel that is neither Ejido nor within a Restricted Zone. You can own Restricted Zone Land differently, but for now, we’re discussing purchasing regular land.
- Find a real estate agent. This step may be optional, but since you’re not a citizen, it’s vital to make sure you get everything handled legally. Otherwise, you may find yourself wasting time and money without any property to show at the end.
- It’s a good idea to visit and see the land firsthand if you plan to purchase. While this step is also optional, and sometimes impossible at the time, whenever it’s feasible, you should always see what you’re buying in person.
- Make an offer for the land. Although Mexican law allows verbal contracts, proving they exist is difficult. Instead, put everything in writing. If the offer is accepted, then you are ready to buy that land.
- Have a notary write up the sale contract. Your real estate agent should be able to help with this process.
- If you plan to pay outright in cash, you will do so at this point. Otherwise, you need to finalize your mortgage with the bank. In the case of Restricted Zone purchase, this part is called a Fiediecomiso, and it’s a little different.
- Sign your paperwork and take possession.
Assuming you can travel, you can now build, vacation, or live on your property, depending on its features and zoning. Naturally, you need a resident card to stay long-term, but that’s a whole different article. However, it’s worth noting that when you invest a certain amount of money in Mexico, it may make you eligible for a residency card.
The Restricted Zone
Mexican law, previous to nineteen-seventy-three, did not allow foreigners to purchase any land in the Restricted Zones. These zones are comprised of all the property within a hundred kilometers of foreign borders and the areas within fifty kilometers of the ocean. This legal provision was intended to prevent foreign invasion and to keep Mexico in the hands of its citizens.
Sadly, the laws meant to protect the land also contributed substantially to slowing development. Since tourism boosts the economy, adjustments were finally allowed twenty years after the initial allowance, mostly to bring in investors from outside the country. As a result, you can now own land in the Restricted Zones indirectly.
This type of land ownership is a trust established between a Mexican Trust Bank and the purchaser. Essentially, through a Fiedeicomiso
, the direct ownership remains with the bank, but you have sole use of the property through a long term irreversible contract.
There are incredible investment opportunities everywhere in Mexico if you know how to look for them. Whether you wand agricultural land, a retirement home, or a retail business, any type of property you want is available.
Can Your Spouse or Children Inherit
One of the essential questions for American landowners is what happens to the land they purchase in Mexico after they pass on. Hopefully, that won’t be any time soon for you. Nevertheless, inheritance is the number two concern, right after how to buy in the first place.
Investing in your future most often means investing in the future of your spouse and legal children as well. Do they still inherit if you own land in a foreign country? According to Mexlaw, “A foreigner with property in Mexico who dies will have their property distributed to their legal heirs, depending on whether they die without a Will (ab intestate), with a Mexican Will, or with a foreign Will.”
It’s essential to lay out your wishes in a will. Doing so allows lawyers to establish inheritance per your desired outcome clearly. Although a person with no signed will may reasonably expect their heirs, including their married spouse and legal children, to receive equal portions of any property they leave behind. International borders can cloud the issue somewhat.
Not only does paperwork need to be exchanged across borders, but the estate has to be managed in the meantime. Moreover, if your heirs are not all of legal age, then they require representation. In short, it can take more than a year and cost quite a lot of money to sort out who gets the land if you don’t make that clear before you die.
Additionally, it may not suit you to have a small parcel distributed equally. For example, if you want your husband or wife to have your property, then you need a will that states this very clearly. I recommend having a lawyer draw up an International Will as soon as you sign the final paperwork to purchase property in Mexico.
Tips & Safety Considerations for Land Owners
Owning land in Mexico doesn’t need to be a huge hassle. If you’ve engaged a lawyer and real estate agent, and followed the steps I laid out with due diligence, then you should have no trouble. As for safety concerns, they are few and far between.
Foreign nationals who plan to live on their property may want to consider the following. First, you need a residency card or appropriate travel paperwork to stay in most places in any foreign country. This includes Mexico. Secondly, as in any country, some areas are safer than others.
Mexico City and Guadalajara are the largest and most populous areas. Resultantly, they also have the highest crime rates. However, that does not mean they are unsafe places to live. With common sense and sound research, you’ll find the traffic is more dangerous than the crime rates in most of Mexico.
Buy With Your IRA
Under some circumstances, you can purchase an investment property with your IRA. The process is more involved, and you cannot live or vacation on this property. An investment made in this way must remain an investment. Your family also might not be able to rent from you, and any income you generate must go back to your IRA.
Buying property in Mexico is a solid investment in the future. You can save for retirement by making an IRA purchase. Renting out a property you own is a surefire way to make certain you have sustainable income well into your golden years.
Final Thoughts
Anyone, or almost anyone, can buy land in Mexico. That unquestionably includes American citizens like you. Once you’ve applied for all the correct paperwork and hired an excellent lawyer to handle the legal details, you’ll find the process moves along quickly.
Getting a home in Mexico isn’t the hard part. Choosing the ideal property for you is going to take time. There are so many architecturally stunning homes. You might spend longer looking at listings than you do getting the deed.
Alternatively, you can opt for merely picking up a parcel of land to build on yourself. Either way, building your dream home in a gorgeous country like Mexico is a realistic goal.