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  • Writer's pictureSergio Madero

Demystifying the Trust: Your Guide to Buying Property in Mexico

Investing in real estate in Mexico as a foreigner may seem like complicated territory, but escrow is a key tool that makes this process accessible and secure. Here, we will immerse you in the concept of escrow and how it works in the context of purchasing property in Mexico.

What is a trust in Mexico?

In Mexico, the Foreign Investment Law allows foreigners to acquire property in areas known as "restricted zones" through a trust. This trust is established with a Mexican bank, which acts as trustee, to legally hold the property on behalf of the foreign buyer.

How does the trust work?

Choice of trust bank:

When selecting a property in a restricted area, the foreign buyer chooses an authorized Mexican bank to act as trustee. This bank will be responsible for maintaining and managing the trust.

Creation of the trust:

The bank creates a trust in which the property is legally transferred to the trustee, but the foreign buyer retains full control and enjoyment of the property. The foreigner is designated as the "beneficiary" of the trust.

Trust duration:

Initially, the trust has a duration of 50 years, automatically renewable for additional 50-year periods. During this time, the beneficiary can sell, inherit or transfer the rights to the trust.

Maintenance and payments:

The beneficiary is responsible for all aspects related to the property, such as maintenance and taxes. The trustee facilitates these payments and ensures compliance with legal obligations.

Legal protection:

The trust offers an additional layer of legal security for the foreign buyer, since the property is safeguarded by a trusted Mexican bank.

Inheritance and transmission:

It facilitates the inheritance of property, since successive beneficiaries can be designated. In addition, the trust simplifies the transfer of property in the event of a sale.

Financial flexibility:

The foreign buyer has the right to sell, rent or mortgage the property, providing financial flexibility.

Automatic renewal:

Automatic renewal of the trust eliminates the worry of losing the property after 50 years, as long as legal requirements are met.

Conclusion: The trust in Mexico is an ingenious tool that makes foreign investment in real estate accessible and safe. By understanding this process, foreign buyers can embark on the exciting adventure of owning property in this beautiful country, taking advantage of the opportunities offered by the real estate market in Nayarit, Mexico. Welcome to your new life in Mexico!

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