The current Mexican constitution was issued in 1917. Within the constitution, article 27 regulates everything concerning the Mexican Territory, ground, underground, sea, waters, natural resources and general rules concerning property. Article 27 also establishes the "restricted area". The restricted area encompasses 100 kilometers along the border and 50 kilometers along the coast. Article 27 also prevents foreigners from "direct" ownership of property within the restricted area. For this reason, foreigners are allowed to purchase property in an "indirect way". The most common is through a Fideicomiso.
There are 3 ways that foreigners can purchase land (and homes) in the San Felipe area.
(1) Foreigners can purchase land in Mexico through a Fideicomiso or "Bank Trust".
With the North American Free Trade Agreement beginning January 1, 1994, the Foreign Investment Act of 1993 was passed by the Mexican congress to promote foreign investment into Mexico. This law allowed foreigners to own 100% of the shares of a corporation and purchase property. As a foreigner, you can acquire irrevocable and absolute ownership rights to property in Mexico through a 50 year perpetually irrevocable and transferable Fideicomiso Trust. This enabled foreigners, as beneficiaries of the trusts, to legally enjoy unrestricted use of land located in the restricted area.
Owning land in Mexico under a Fideicomiso Trust gives you the right to use, enjoy, lease, improve, mortgage, sell, profit, inherit and will the property.
(2) Ejido Land - EPNA
Ejido land is land set aside by the Mexican government to be used by
communities mostly for farming. The Ejido nearest to San Felipe has a perfect view of the Sea of Cortez. Each plot of land (40 meters X 40 meters) was given to Mexican citizens in a lottery system. Each Mexican citizen has full property rights. In this particular Ejido, Mexican citizens have the right to sell their land to Americans and Canadians giving the new property owner full rights to the land. This is why it is so important to buy Ejido land through the Ejido office. Once the property has been transferred to the new owners, the paperwork is signed by the Ejidotaries and is filed in Mexicalli.
Any past problems that people have had in other Ejidos was due to the fact that they did not go through the Ejido office, they dealt directly with the land owner, and the land owner changed their mind and wanted more money. Always go through the Ejido office!
There are several satisfied Americans living in the EPNA.
(3) Leased Land
Leased land can be very affordable. Only purchase your lease from a trusted member of the community. There are several here in San Felipe. The homes on leased land are closest to the beaches. The homes are very good vacation and retirement homes. Only buy in an established area with other Americans and Canadians. Ask around, talk to the neighbors.
We are at your service at any time for consultation.
The first rule of any property purchase in Mexico is, always work with a Real Estate Brokerage firm. Purchasing property in Mexico is different than in other parts of the world and a professional Real Estate Agent is your safest way to success.
We are here to protect your investment and ensure that you are satisfied with your transaction. Our evaluation of a potential property of interest will guide you to determine if that is the right investment for you. Your best interest is our primary concern.
We take the time to show you how Mexico's real estate transactions function and how the supporting legal system has responded to the industry's needs. It is essential that you have an idea of how this system works and what to expect when considering an investment in Mexico.