Mexico has long prohibited foreigners from directly owning property along its coasts and international borders, but a change in the country’s constitutional law is expected to create a buying frenzy. The current law requires foreigners to enter into contracts with banks to use and manage coastal properties due to Mexican law that’s been on the books since 1917. The amendment, which has been proposed as a way to usher in more foreign capital, will allow foreigners now buy these properties outright and speculation has already begun as developers and businesses scour the coasts and borders for deals that could earn them a fortune. For more on this continue reading the following article from Global Property Guide.
Since word got out that foreigners may soon be allowed to own Mexican beachfront houses, property developers, investors and buyers have been scouring Mexico’s Pacific coastline for hot deals.
Foreigners cannot now own land within 50 kilometers of the coast or 100 kilometers of an international border in Mexico, because of a 100-year old restriction written into the country’s 1917 constitution. To exercise property rights they must partner with a Mexican bank and sign a fideicomiso agreement, which has a 50-year term, annually renewed. The bank holds title, but the foreigner is given authority to manage and control the property. Getting into a fideicomiso is complicated, and foreigners typically dislike the process.
In May, Mexico’s House of Representatives approved a constitutional amendment removing restrictions on foreign ownership of residential property along coasts and borders. Sponsored by both the Institutional Revolutionary Party and the National Action Party, the amendment is now with the Senate.
President Enrique Pena Nieto is pushing for freer entry of foreign capital into Mexico, and the amendment is part of this. He has also supported opening Pemex, the state-owned oil company, to foreign and private investors. The president seems likely to muster the needed votes to push through the constitutional changes.
Americans and Canadians have long favored Mexico, which is near, and has a lower cost of living. With the beachfront property restrictions removed, Mexico will become even more attractive.
This article was republished with permission from Global Property Guide.