Real Estate FAQs
1) How can I, as a non-Mexican, own property in Mexico?
2) Isn’t the Trust just a 99 year lease?
3) Does the Mexican Government have a stake in allowing Foreign Ownership?
4) Can the government just take my property if they choose?
5) Tax notices: Where are they sent? How do I get them?
6) How much are property taxes?
7) How do I know that the title I get is for the property I saw?
8) Ejido Lands?
9) Why are prices of Real Estate in Mexico in US Dollars?
10) Living in Mexico – is it safe?
11) What is this about a new Airport?
12) Is there good golf in the area?
13) I have heard a lot about salt water fly fishing in the area, what’s that about?
14) I heard the beaches were pretty good there?
15) What is the Federal Zone?
16) I hear there is a lot to do? Tell me about it?
17) I hear the delays clearing customs can be a pain, how do I avoid them?
18) I hear that dowtown Playa has a long cobble stone outdoor mall feeling…More like Europe, not like Cabo. What is there to do?
19) Transportation…should I rent a car?
20) What is the history of the Mayan culture and how can I learn about it on my trip?
21) What do I need to bring? Do we need Mexican Currency and how much?
22) What about passports and other docs for kids?
23) What is there for kids?
24) I hear the region is known for small sleepy ports with fun restaurants, mom and pop restaurants and fine 5 star cuisine all in the same region. Where should I go?
25) Everyone talks about the Diving…do I need to be certified, where do I go?
26) I want to Party…is is so laid back you can’t do this?
27) What is 5th Avenue and why is everybody talking about it?
28) What are the good and bad times of the year to go?
29) Do I have to be at the closing?
History of rights as a foreigner
The Mexican Constitution was drafted and passed into law in 1917. Although there have been amendments instituted since its inception, this original document is still the supreme law of the land, just like in the US.
In the Constitution, there is a provision that creates an area known as the Restricted Zone. The Zone is 100 km (62 miles) from the borders and 50 km (or 31 miles) from the coasts. In this Restricted Zone, only Mexicans could own land. After so many years of being a possession of someone else, this provision was done for their own protection, and at the time, it made sense.
However, in the 60s the Mexican Government realized that there was a lot more money outside of Mexico than inside. In1970, inan effort to create foreign investment, a Bill was passed into law which created a legal and viable opportunity. The Bill stated that a trust, called a ‘Fideicomiso’ in Spanish, could be set up with the foreigner as the sole and exclusive beneficiary. Since a Mexican bank must administer the trust, it satisfies the requirements to purchase land in the restricted zone. The beneficiary (foreigner) could control the land. Because of the 1970 Bill, major foreign investment flowed into Mexico. Not only Cancun, but also Cozumel, Acapulco, Puerto Vallarta, Ixtapa, and Cabo-San Lucas began development thanks to this law.
In 1994 the newest Bill was passed pertaining to the Restricted Zone. This law states that a Mexican Corporation, wholly owned by foreigners, can be a legal Mexican entity. Now, you can own a corporation and hold all its assets.
In addition to the confusion that results from the different types of corporations available to form (Limited Liability Corps, S-Corps, Partnerships, to name just a few), there are specific situations in which it is beneficial to own a property through a trust and when the benefits of a corporation are better. The important item to note is with either vehicle, you are completely protected as long as the process is done properly, with guarantees going back to the 1917 Constitution. This is how nearly every American Multinational Corporation has a presence in Mexico.
No. This is a popular misnomer that comes for 2 sources. One is custom in Mexico dictates that within the articles of incorporation for a Mexican Corporation, a specified term of 99 years is stated. This is not law, but nearly always done.
The second source is on the West Coast of Mexico near the California boarder, which has a long history of granting land leases on beachfront parcels used by weekend vacationers. The lack of understanding by these lease holders, coupled with bad information from Mexican sources has culminated in the 99 year lease misnomer that is still perpetuated.
The Government has made it very easy for foreigners to own land in Mexico. So much so, that the revenues from Foreign Investment & Tourism now surpasses the revenues from the Oil & Gas industry. It should be noted that in Mexico the government owns the monopoly, PEMEX, which controls all oil & natural gas in Mexico. The revenue it collects is from the DIRECT sale to the public. However, the taxes from the industry of foreign investment and tourism exceed those of oil & natural gas. Foreign investment & tourism – is now their cash cow and the Mexican government welcomes your participation.
No. Mexico is a land of laws, and there are very exact laws for real estate. Prior to closing, your attorney will have reviewed the title history and when you close on your property, you (your Corporation) will hold clear title to your property.
Just like in the U.S., if you don’t pay your real estate taxes the government may claim your property after due process. But they will not just take your property. In this modern day of instant worldwide communication, there would be a quick halt to foreign investment if there was a chance that the government could seize your property. And that is not what Mexico wants. Mexico is enjoying the billions of dollars that flow into the country each year from foreign investment.
Tax notices are not mailed to property owners. Your attorney will get them directly from the government office for you each year and advise you the amount due and handle the payment for you.
Annual real estate taxes are quite remarkable. Typically they are about ¼ of what you would pay in the US, per value of the property.
Just as in the USA, property in Mexico is surveyed and legal descriptions are written and recorded with the government. Your attorney will match the legal description on the survey and on the deed to the legal description in the Notario’s recording book and the legal description in the Land Registration Office and the tax ID number.
Ejidos are a complicated part of Mexican history. An Ejido is land which Mexicans are given the right to use for living and working (usually farming). The land cannot be sold, leased or transferred to anyone not an Ejidatario. The permission to use the land can be transferred to other Mexicans, but not to non-Mexicans.
When Ejidos were originally granted, they were placed in non-prime locations at the time, usually in places where the towns weren’t. Nowadays, you can find Ejidos situated on beautiful and highly desirable beach locations. Non-Mexicans see these beautiful beach front properties being used by a few Mexican peasants and offers are made to purchase the property. Money changes hands and often homes are built by the non-Mexicans. Tough luck for these non-Mexicans who didn’t consult with a qualified and dependable Mexican real estate attorney about a title search and what is Ejido land and who is eligible to own it.
All non-Mexicans who occupy Ejido land are illegal trespassers on that land, because only Mexicans are allowed to use the Ejido land. Before buying property in Mexico, make certain you are buying property which you can legally own.
Following the currency crisis of 1995, Real Estate in Mexico, especially Real Estate that is marketed to Foreigners, is denominated in USD. This is done to protect against any currency devaluations against the Mexican Peso. As long as you still want dollars at the end of the day, it is a great system.
Ask any of the “ex-pats” living here and you will get the same answer: “Mexico is a great place to live.” It is not the dangerous place sometimes portrayed on US television.
There is a distinction here that needs to be made. Boarder towns such as Ciudad Juarez, Tijuana and Mexicali are dangerous. But those places have as much to do with this area as inner city LA has to do with Des Moines, Iowa.
The construction of a new international Airport in Tulum has been announced and is already under construction. The site has been purchased by the Government, the brush has been cleared and the runway is visible from Google Earth maps.
Recently the President of Mexico, Felipe Calderon, was in town to announce the official bidding process for the construction of the airport, with full federal support. The completed airport will have the capacity to welcome 3 million visitors a year and create another entry and exit point for the southern portion of the Riviera Maya.
Great Golf in fact. Not (yet) known as a golf destination, we currently have 15 operating golf courses with the only PGA Event outside the US and Canada (The Maya Koba Classic) and a number of other important tournaments. The most recent addition is the Bahia Principe course which is located about 10 min south of our site. Designed by Robert Trent Jones, the course is a Masterpiece in golf course design and construction, truly world class.
Some of the best salt water fly fishing is only a short drive to our property. The Sian Kaan (Mayan for where the sky meets the sea), a UN Biosphere Reserve located south of Tulum has some of the best salt water fly fishing in the world. The fishing lodges located there have gained international acclaim with their expert guides and knowledge of the vast fishing areas within the reserve.
The area boasts bone fish, snook, tarpon, and permit, with the ultimate to get all4 inone day, commonly known as the “Grand Slam”.
Pretty good? They are a little better than pretty good.
This area is home to 7 of the top 10 beaches in Mexico. 3 of them have been classified as “Class 10” beaches.
Every seen a Corona Commercial? They are filmed at a place called Xpu Ha, one of those class 10 beaches.
Xpu Ha, is (pronounced Ish-poo-ha) is the Mayan word for the beautiful sandy beach located between 2 rocky points about 14 miles south of Playa del Carmen. The Mayan word means “The Estuary of 2 Waters”, probably named for the many cenotes that are in the area.
In English, for those in the know, including the editors of Forbes Magazine last year, Xpu Ha means one of the most beautiful beaches on the planet.
Ever watched the Travel Channel? They rated Maroma, another of those class 10 beaches, the best beach on the planet (2002).
We could go on and on, by why not come and see for yourself..
All beaches in Mexico are public. The Mexican Government owns the first 20 meters (66 feet) from the high water mark inland. No one is allowed to restrict access to this area. A beachfront property is your property up to the Federal Zone. Just because you do not own the Federal Zone, does not mean you cannot use it. Special provisions are made so the owner of the property behind has the first right to the concession to the beach area. Just ask us for more details.
There is so much to do down here it could fill volumes. In fact it does. See the email “Things to do” for more info.
Like any International Destination there can be delays at customs coming in. These mostly happen when a number of flights arrive at the same time, so although there is no way to eliminate them entirely, they can be minimized. Here are a few suggestions:
1. Don’t fly in on Saturday afternoon. This is when we have had the majority of our complaints.
2. Do try to get in on earlier flights if possible. The bottlenecks seem to happen more in the late afternoon than in the early afternoon.
3. Stay positive. Remember the officials at the airport are just doing their job, and they want to get you through as quickly as possible. You are coming here to be on vacation, so go with the flow and you will get through with plenty of time to spare.
4. If you are going to rent a car, do it ahead of time on the internet. This makes life a lot easier and moves things along faster.
5. If you are going to take a taxi, be sure to buy pay for it before you leave the airport. There are set prices in the airport for taxis around the entire Riviera, so feel confident in buying your pass inside.
Playa is a really special place. Tourism wise, we are about 40% American / Canadian, 40% European and 20% South American. This means that the City itself has a cosmopolitan mix of cultures not found anywhere else in this hemisphere.
If what you are used to in Mexico is Cabo, prepare for a surprise (we think it will be a good one).
Some people do like to have their own vehicle though, so if you would like to rent a car do so before hand on the internet. You will get a better deal this way. Also know that insurance is optional here, but still very important to have so please make sure to sign yes to the insurance.
This area is steeped in History. Our suggestion is take a day and go on a guided tour of the Coba ruins. It is the largest Mayan city found to date and is a great day trip to learn a lot about the culture.
For further reading we suggest: A Forest of Kings: The Untold Story of the Ancient Maya by David Freidel and Linda Schele
Bring some cash with you. Although most places do take credit cards, all do not, and American Express is particularly expensive for vendors outside the US, so many will not accept it.
Although US Dollars are taken nearly everywhere in the Riviera Maya, we suggest you use Mexican Pesos when you are out and about. In addition to getting a much better exchange rate at a change house or a bank than you are going to get with dollars, it is Mexico and that is the official currency, so it helps to break the “Ugly American” sterotype.
All ATM”s in Mexico distribute Mexican Pesos, that is the easiest way to get it.
Everyone who comes into Mexico needs a passport. In fact the US airlines will not let you leave without one, no matter their age. This is actually less to do with Mexico and more to do with the US will not allow back in the country without one.
There is a ton to do for kids in the area, depending on their ages. Check the “Things to do section” for more specific information.
This region offers an extensive gastronomic variety. You can find restaurants for all prices and styles of food: Mexican, Italian, French, Spanish, Fusion, Japanese, Thai, International, American, Lebanese, Seafood, even Molecular Gastronomy.
There are cozy and good food places which not all tourists know, fast food or beach restaurants where you can enjoy a delicious dinner and good wine while listening live music, feeling the fresh breeze and enjoying the shine of the full moon over the sea.
You can also find restaurants with good cuisine where you can dance and have fun and there are fancy restaurants in unique environments where both Mexican and Non-Mexican Chefs from all over the world are in control.
Besides all these restaurants there are plenty ice cream and coffee shops.
Truth be told: its seems like every day there is a new restaurant popping up so we recommend visit the a few websites:
Where the information is updated on a regular basis.
Here in the Riviera Maya we are home to the Great Mayan Reef system, the second largest reef on the planet! Here you find living coral reefs, fish of all shapes and colors, and exotic marine life that most people only experience on the Discovery Channel.
You do need to be a certified diver to SCUBA, but if you are not certified you can also do so at any of a number of locations, taking a basic introductory course usually takes about 5 hours.
If you don´t have a favorite dive shop we have a few we work with and have never had a complaint, be sure to ask us for a recommendation if you don´t have one in mind.
Playa del Carmen is where you can always find nightlife. Off 5th Ave on Calle 10 there area lot of great bars and clubs that are quickly becoming famous in their own right.
Along the 5th Ave. in Playa del Carmen you will find a wide variety of restaurants, bars and clubs with live or DJ music, as well as places to dance.
For day partying, there is none better than the Kool Beach Club in Playa. Every year Fashion TV has their annual runway show of the latest swimwear there, and if you are looking for a place to see the beautiful people, it will do anytime. For people watching, there are few places that compare.
5th Avenue is the 30 block long pedestrian street in downtown Playa del Carmen. Started years before there were any cars to worry about in the area, 5th Avenue has created a life of its own by the hip and just plain interesting business that have sprouted up on it.
Although it would be impossible to mention all the places to see here are a few highlights to get you started:
- Swing by Blue Parrot at 11 pm to watch the Fire Dancers (10th and the Beach)
- Try the chocolate mouse at Au Cacao on 5th and Constitution. It is a shop café stocked to the hilt with chocolate cultivated and produced in Mexico. The Mayans were the first people on earth to cultivate Cacao, and that rich goodness is found in all the products is tasted throughout the café.
- Gelato. Our local Italian population has brought their gelato recipes with them as they arrived in Playa with each one saying theirs is the best. I guess the only way to find out is to try them all.
- A martini at Fly Bar (5th and 10th). Just for a minute you think you´re in LA.
- Tequila tasting at the Tequiliaria on 5th between 12th and 14th. Always an assortment of tequilas to sample don´t miss the coffee flavored tequila, Mexico´s answer to Baileys.
- Mayan Coffee at Yac Xe (5th and 22nd). You have to see it to believe it.
These are just some of the highlights. Stroll down this safe beautiful street at your own pace and discover what else is out there!
The best thing about having a place in Paradise, is it is nearly always perfect! The Riviera Maya has one of the sunniest climates in the world. Our ´rainy season´ is end of September to beginning of November, but typically that means a short shower in the morning or afternoon, not all day rain. It is almost guaranteed that you will see the sun every day of your stay.
The perception of the area is since it is nice in the winter, it is very hot in the summer. This is not accurate, in fact until a few years ago enjoying the area in the summer was a secret known only by those ín the know´.
These days there are a lot more people in the know. Summer has turned into high season for families and Europeans, who traditionally get a few weeks off in the summer. Over the last few years the locals in Playa have changed the name in August from Playa del Carmen to Playa del Milano, for the influx of Italian Tourists!
It is not necessary for you to attend closing. You may close in absentia. This is done by your attorney via Fed-Ex the necessary documents. Whether the timing is not convenient or just to save the expense of a quick return visit, most buyers choose to close by mail.