A common question asked by tourists who visit our paradise off the Sea of Cortez, “Is it possible to own property in Mexico and how does that work?” The great news is YES as a foreigner traveling or living in Mexico you can purchase property through what is known as a bank-trust or Fideicomiso in Spanish. Let’s explore what’s a bank trust, how does it work and why do we need one in this article.

Mexico’s Restricted Zones
Mexico’s current constitution was enacted back in 1917 and it set up restricted zones which forbid direct ownership of land by a foreigner within 100KM (62miles) of an International Border or 50 KM (31miles) from any seashore. Puerto Peñasco falls into both categories because we are roughly 45 miles from an International Border, and we are within the 50KM of seashore.

The reason restricted zones were set up was to protect Mexicans from invasions or encroachment of borders by foreigners. Armies often landed on the coasts of Mexico, established a base and Mexico would lose land mass, i.e., the Spanish Invasion. So, the constitution was designed to ward off this threat and protect the country.

Over the years, it is less and less probable that a military attack would occur so rather than amend the constitution the Mexican people, through their government, designed a system through which foreigners could enjoy all the benefits of property ownership in the highly desirable restricted zones, hence the Bank Trust or Fideicomiso was created.

The Bank Trust
A bank trust is an agreement where the bank acts as a trustee and manages the ownership of the land along with any improvements and names the purchaser or anybody you choose to be as the beneficiary.

If you ever decide to sell the property, the bank’s trust department is instructed in writing through the closing coordinator that you are transferring ownership to another party. Those new buyers can either assume the current bank trust you have in place or they can initiate a new bank trust. A new bank trust can range from $4,000 to $6,000 depending on the bank. The cost of your bank trust is part of your closing costs which typically can range 4 to 6% of the purchase price.

Bank trusts are written for up to 50 years and they are renewable for any number of additional 50-year periods. If you assume an existing bank trust, make sure that there are enough years left in the trust that is satisfactory to you. There is annual fee for a bank trust which varies depending on the bank from $400-$800.

The Market
Now that you understand how ownership for a foreigner works in Mexico, let’s talk about the State of the Market. The current real estate market here in Puerto Peñasco is very strong, some would call it hot, and 2021 is off to a fantastic start. Just in the first two months of 2021, $10.76 million of inventory has been sold and the average days a property remains on the Market has dropped by nearly 50% from January to February. The demand for a condo, home or vacant lot is high and as inventory slowly drops prices will start to rise. This means if you ever dreamed of owning a vacation property here in Puerto Peñasco now is the time to make your move so contact one of our many qualified real estate advisors who will be happy to show you how you can own a piece of the dream.

About the author: Joseph Sanchez is president of Rocky Point Home Builders a design/build contractor specializing in custom home design, construction and engineered renovations and a real estate agent with RE/MAX Legacy. He resides here in Puerto Peñasco with his wife and three children and is originally from Chicago. For more information email him at sales@rockypointhomebuilders.com.


Playa Encanto – If you ever dreamed of owning a vacation property consider this home priced at only $149,000 and newly remodeled. (Photo Courtesy Flexmls #20-795)

Casa Miguel – Owning a home in Mexico is possible and consider this $104,000 beach front palace where you can be a 1/8 owner for a fraction of the cost. (Photo Courtesy of Flexmls #21-1640)

San Besitos –Own New construction underway currently in the Mirador from the low $100s. Visit SanBesitos.com for more information.