Can a foreigner own property in Puerto Escondido, Mexico
The real estate market in Puerto Escondido
There is an increasing number of foreign people looking to buy a property in Mexico or invest in one and Oaxaca is one of the main tourist destinations and also for large and newly initiated investors.
Puerto Escondido is one of the places in Mexico with the greatest boom since the pandemic has affected thousands of people who have decided to look for better places to live. It is also one of the areas within the planet in which it is possible to have a better quality of life and that also allows us to enjoy natural attractions that benefit our mental and social health.
The good news is that if you are a foreigner looking to take over a property on the Oaxacan coast it is completely legal for you to do so, but there are a series of steps and considerations that you should take into account when starting your process as an investor.
Mexico has something called a “restricted zone”, which refers to the space that is located within the first 50 kilometers closest to the coast or 100 kilometers from the international land border. It was not until 1973 that Mexican laws were modified to encourage foreigners to also invest in Mexican land and until 1993 that the law was formalized. This allowed that Bank Trusts or fideicomisos could legally be created to buy properties within the restricted zones since in the Mexican Constitution article 27 mentions that it is forbidden as a foreigner to acquire direct ownership of lands in “restricted zones”.
The creation of a Bank Trust allows that as a foreigner you can buy properties that cannot be sold without your written consent. The creation of a Bank Trust makes it possible to own multiple properties, inherit property, build on the land you buy, or sell the property to another buyer/investor.
You can only get a trust for a private land, that is, a property with a public deed.
What is a trust or fideicomiso?
In general terms, a fideicomiso acts as a legal entity that allows foreigners to deed lands / properties by means of a permit granted by the Ministry of Foreign Affairs and is regulated by the General Law of Titles and Credit Operations. This process works through a bank to ensure its operation. We can say then that it is a financial tool that helps estate acquisition planning with the help of a third party that maintains assets or investment in safe keeping.
A trust is renewed every 50 years and grants control of that property. As a foreigner, you can buy more than one property and they cannot be sold without your written permission.
Other considerations you should have when buying property in Puerto Escondido:
Ejido Lands: Few areas of Puerto Escondido and Huatulco are considered private and those that are not are considered communal land. There are more than 1,602 communities in Oaxaca who are legal owners of these lands and cannot be sold unless the agrarians assign through an act of possession the rights to these lands to individuals or legal entities.
Accompaniment of a notary: He will be in charge of accompanying in the process of drafting official papers and contracts for the sale and acquisition of land. He will be the representative of the foreign buyer throughout the entire procedure until the purchase title is transferred and written off.
The experience of acquiring or investing in Mexican lands, particularly in Puerto Escondido can be a simple process if carried out in the right way. It is always advisable to follow the entire process accompanied by the necessary legal advice to make sure that both the deeds and the prices and the entire process are being carried out in the best way. The advice does not have to be only in the hands of a lawyer, there are real estate agencies that can also guide you from the moment you are considering buying, this can be a great facilitator within this entire purchase process.
