Purchasing property in Mexico is not the same as in other parts of the world. It is important that you have a good understanding of how this system works and what to expect when considering an investment in Mexico. Most important is that you should make sure you are dealing with a reputable Real Estate company that is registered to operate in the area you are looking to make a purchase. 

Recognizing the demand for ownership of real property by foreign interests in the restricted zone, an area 100 km. along any border or 50 km along the coast, the Mexican government implemented a series of Foreign Investment Laws to allow foreigners the ability to acquire ownership through a special land trust known as "fideicomisos". Current law requires that title to the property be transferred to a Mexican bank, as trustee, in the establishment of trust and the bank handles all of the paperwork including filing for all of the necessary permits with the Ministries of the Interior and Foreign Affairs. In general, the bank has the responsibility to the government to ensure precise fulfillment of the Trust agreement, assuming full technical, legal, and administrative supervision in protecting the interests of the beneficiary (purchaser).  Ownership is evidenced through a deed prepared by a Mexican Notary, signed by the representative of the trustee bank and duly registered with local authorities.

The Foreign Investment Law of 1989 stipulates a term of 50 years for the Trust with opportunity for multiple renewals. By requesting renewals every 50 years, a property may be held by a family or business entity for generations. Since by law Mexican banks enjoy government protection against bankruptcy, the Trust is indirectly guaranteed by the government. Because of this special protection, many foreigners prefer to hold their property in Trust even in unrestricted zones.

All real estate transactions are processed through the office of a "Notario", a government appointed lawyer who acts on behalf of the government to ensure the proper transfer of all real estate transactions. Among this official's duties is registry with the appropriate government agencies the deed for transfer of rights of the beneficiary. This is the single most important step in protecting a foreigners investment in Mexico, since it remains the ultimate proof if ownership if a property ever becomes a question.

The purchase/sale document, which includes either deed of rights or transfer of rights of beneficiary in a property, contains a description of the property, price to be paid to the seller and any special terms or conditions of the sale. It will not provide valid notice to third parties unless it is recorded in the Public Registry office of the municipality in which the property is located.

Until the buyer is formally named as a beneficiary in a public document before a Mexican Notary, title to the rights in the property remain with the last legally registered owner, which would be the seller. While the seller holds title to the property it is his asset; he may mortgage it or sell it again; it may be attached in satisfaction of a judgment; he may die without a will. In such a situation, there may not be any remedy for the purchaser who neglected to correctly register his deed - his interest, his investment may be lost.

To ensure proper registry of the property, an official appraisal of the property, notarized bank instructions, a property tax certificate, and no-liens certificate must be obtained. Sellers Capital Gains Tax and Buyer's Acquisition Tax must be paid and the deed transferring rights to the buyer must be registered and stamped by both the tax office (Treasury) and the Public Registry. If this process is not completed the buyer is not fully protected.