Open Mexico the real estate market for foreigners

Mexico cannot be called a popular place for buying real estate among Russian investors, which is understandable: in order to get to the country, you need to cross the Atlantic Ocean. Mexico is also not a popular holiday destination among Russians, which is completely undeserved given the fact that Mexico is one of the most popular tourist destinations and ranks 23rd in tourism revenue according to the UNWTO report. The country is washed by the Gulf of California, the Gulf of Mexico, the Caribbean Sea, the Pacific Ocean; has a warm north-tropical climate. Mexico has many resort areas - such as, for example, Costa Alegre, Puerto Vallarta, Manzanillo. The islands and groups of islands also belong to the territory of Mexico: Guadalupe, Revilla-Jihedo. Apart from the remoteness, there are other reasons for the lack of great demand among Russians for Mexican real estate - complicated Mexican legislation that does not allow investors to buy land in coastal zones, as well as communal ownership of most of the land. Buying land in Mexico is a costly and troublesome business, which can only be undertaken by a foreigner with a very strong desire to live in this country. Nevertheless, apparently, the country will face serious changes in legislation that directly affect the real estate market. Article 27 of the Mexican Constitution Today, in order to acquire real estate in Mexico in the coastal zone, a foreigner needs to use a special trust of the Mexican bank, which is called "Fideicomiso". Direct purchase of real estate by foreigners in the so-called "ban zone" (50 km from the ocean and 100 km from the state border) is not allowed by Article 27 of the Mexican Constitution. The constitution was adopted in 1917 after the Mexican Revolution. Article 27 of the constitution is a reminder of the country's colonial past, when until 1821 it was dependent on Spain. Hence the suspicious attitude of the Mexicans towards any permanent settlement of foreigners in the coastal zone and the territory close to the borders. Moreover, an example of the separation of a part of Mexico as a result of the settlement of the territory by foreigners in the history of the country already existed - this is Texas, which was once a Mexican province. However, in April last year, there was an encouraging development: Congressman Manlio Fabio Beltrones of Mexico's ruling Institutional Revolutionary Party proposed a bill to amend Article 27, allowing foreigners to freely purchase non-commercial property in the coastal zone. After this news, many foreign investors, especially from the United States, prepared themselves for profitable investments in the new market. In Costa Alegre, at the moment, there are already many luxury villas owned by both Mexicans and foreigners. The resort area is expected to invest over $ 1 billion in new projects. According to Beltrones, the lifting of the ban on the purchase of property by foreigners in the coastal zone will attract a significant amount of investments necessary for the country. The lower house of parliament has already approved the bill. The law requires approval from the upper house and most legislatures of Mexico's 32 states. However, the bill has already sparked protests among Mexicans. About 88,000 people signed an online petition against the ban. In their opinion, the unhindered admission of foreigners to the land of the coast will lead to the fact that most of the coastal zone will be bought up by foreigners and will be inaccessible to local residents. Fideicomiso Banking Trust At the moment, a foreigner can purchase non-commercial real estate in the "ban zone" by issuing a trust deed in a Mexican bank. This became possible thanks to a law passed in 1973, when the country needed foreign investors. Formally, the owner of the land in the “banned zone” is the bank, while the buyer is registered as the beneficiary. The buyer's right is renewed every fifty years. Outside this territory, the foreign buyer does not need a trust deed. To register a bank trust, the buyer requires an initial payment of $ 1000 to $ 2000 and interest depending on the value of the property. In addition, an annual fee is assumed for the services of the bank as a principal. The main disadvantage of trust holding, in addition to additional fees, is that if a will was not drawn up after the death of the beneficiary, then a special order of the Mexican court sent to the bank may be required to re-register the ownership of real estate by the prospective heir. In such a case, it can take several years and thousands of dollars to settle all legal issues. At the same time, it is important that the real estate purchased is not commercial, that is, it is purchased only for housing. Reforms in Mexico Mexico is one of the world's ten largest oil exporters. Following the official inauguration in 2012, Mexican President Enrique Pea has launched comprehensive economic reforms. During his election campaign, Pea promised to reform the oil and gas sector, end the monopoly of the state-owned Pemex corporation and allow foreign companies to participate in the oil sector. For this, at the end of December 2013, the president signed an amendment to the already mentioned 27 article of the constitution. Thus, a precedent has been created for changing the constitution in order to attract foreign investment. It is obvious that the Mexican government has embarked on a course of reforms and the next step can be expected - the lifting of the ban on the purchase of real estate by foreigners on the coast of Mexico. It is also understandable why the president is in no hurry to implement another important reform, which could provoke protests from the conservative part of the population, and so not too happy about the energy reform - the completely nationalized oil sector in 1938 was a matter of special national pride for the Mexicans. In any case, the news about possible changes in the legislation, which should significantly simplify and reduce the cost of buying real estate in Mexico, caused a great stir among investors around the world last spring. Despite the fact that plans to reform the land legislation have temporarily disappeared from the official agenda, the possibility of opening a promising new market forces potential investors to closely follow the news from Mexico. A promising new market cannot fail to attract the attention of buyers even from such a country as far from Mexico as Russia. Daniil Burygin, HomesOverseas.ru