No fideicomiso required by foreigners if bill proceeds
Updated April 25, 2013
A bill that would simplify the process for foreigners wishing to buy real estate in Mexico has passed in Mexico’s lower house. The chamber of deputies voted 356 in favor and 119 against yesterday to change the constitution to allow foreigners to purchase property in the restricted zone without having to do so through a trust, or fideicomiso.
The sweeping change amends a constitutional prohibition that dates back to 1917, and was designed to repel expansionist intentions by the United States.
The restricted zone applies to land with 50 kilometres of the coast and 100 kilometres of international borders. Under the present system, foreigners are unable to purchase real estate outright. Instead it must be held on their behalf by a bank through a fideicomiso, which must be renewed annually.
The amendment, which applies only to residential property, must now receive approval from the senate and from a majority of state legislatures. The bill was introduced by deputies belonging to both PRI and PAN, and opposed by the leftist PRD, Movimiento Ciudadano and the PT.
According to one federal representative, 60,000 fideicomisos were registered in the past 12 years. Banks are among the big beneficiaries of the requirement: those 60,000 trusts are worth more than $30 million (USD) annually in renewal charges.
The amendment will have no effect on ejido or communal lands, contrary to information published here earlier. Those lands fall under the Ley Agraria, which states that only Mexicans can hold them.
The sweeping change amends a constitutional prohibition that dates back to 1917, and was designed to repel expansionist intentions by the United States.
The restricted zone applies to land with 50 kilometres of the coast and 100 kilometres of international borders. Under the present system, foreigners are unable to purchase real estate outright. Instead it must be held on their behalf by a bank through a fideicomiso, which must be renewed annually.
The amendment, which applies only to residential property, must now receive approval from the senate and from a majority of state legislatures. The bill was introduced by deputies belonging to both PRI and PAN, and opposed by the leftist PRD, Movimiento Ciudadano and the PT.
According to one federal representative, 60,000 fideicomisos were registered in the past 12 years. Banks are among the big beneficiaries of the requirement: those 60,000 trusts are worth more than $30 million (USD) annually in renewal charges.
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