Resources : Frequently Asked Questions

Frequently Asked Questions

I’ve heard that I could purchase empty lots for cheap, is that that true?

The answer to that depends on the area- but yes, quite often a person can purchase a lot of land for less than most areas in Canada and the United States. The challenge arises in getting permits to build, zoning, negotiating through labor issues (there are trade unions who may make things difficult for you), water rights, liens, authenticating true ownership of the land, etc. Purchasing the land will not exempt you from taxes and trust fees.

Can I transfer my Mexican property to someone else? Is my Mexican property willable?

Yes! One of the benefits of the fideocomiso, is that you are able to list beneficiaries right in the agreement, or, at any time you may transfer your ownership to another buyer. As mentioned above, you have all the same rights that you would expect traditionally when owning property.

When I buy property in Mexico, can't I just buy it 'under the table'?

With any type of real estate acquisition, foreigners always need to register the ownership at the Ministry of Foreign Affairs. The rights to ownership are granted when the foreigner agrees to comply with Mexican law and to waive their rights to foreign government intervention. By doing so, the foreigner is considered as a Mexican National with the corresponding rights. In the case of acquisition of property in the Restricted Zone, it is the bank that requests the acquisition of the property at the Ministry of Foreign Affairs. If someone is offering to let you buy property without this process – they are not being truthful.

What is transportation like in Veracruz?

Every method of transportation you would expect in Canada or US you will find in Veracruz. Some local resident’s cars are older than you might find north of the border, but the buses, planes and taxis are modern. Buses for traveling out of town are especially more modern and comfortable that what we typically find in Canada and US.

What is the Foreign Retirement Incentive Program?

With an FM2 or FM3 (these designate a type of residency) and proof of address in Mexico, Foreign retirees can qualify for an attractive Seniors discount program similar to the program made famous in Panama. The Mexican equivalent of Social Security, the “INAPAM” provides these cards that foreign retirees over the age of 60 can use to get discounts up to 50% off things like medical, dental, travel, entertainment just to name a few. This program and many other benefits propelled Mexico to be Ranked Number One country to retire by International Living in 2007.

Is Mexico a tax haven?

Many people think that moving to Mexico enables them to avoid taxation. Although some may try, it is illegal, and they will likely be caught. That said there are some significant tax savings for those who become residents of Mexico and notify their government that they are doing so. Fortunately Canada, the US and Mexico have a tax treaty that ensures that you will not be double taxed. The best way to ensure that your finances are arranged properly before you move to Mexico is to find a Certified Financial Planner with extensive experience with clients who live abroad.

Is it safe in Mexico?

Actually, like any place in Canada and the United States, there are areas that are less safe than others. The area around our development consists of small towns which are similar in nature to the small towns in rural areas we are familiar with. People are friendly, eager to welcome you and helpful. Many people walk about late at night without worry as violent crimes are extremely rare. Many of the headlines you may hear of are a result of unlimited liquor in a heavy party environment – a recipe for disaster no matter where you live.

Is a Trust the only way I can own property within the restricted zones?

Another way a foreigner can own property in the restricted zone is to incorporate a company in Mexico with the intension to gain rental income from the property. A foreigner can incorporate a Mexican company which owns the property.

I heard you can’t own property in Mexico, is that true?

When it comes to the Restricted Zone (Restricted zone is the area within 50km of the Coast and within 100km of Mexico’s boarders) foreign ownership is only permitted through an irrevocable Foreign Real Estate Bank Trust (Fideiocomiso). The Foreign Investment Act and the North American Free Trade Agreement allows this secure method of purchasing Real Estate in Mexico. The buyer can appoint the Mexican bank of their choice to act as a trustee on their behalf. As a trustee, the bank will actually legally own the property. However, all the rights to the property will exclusively be held by the buyer. This means that the buyer will be able to use, improve, rent or even sell the property as though they directly owned the property. The bank is not permitted to interfere with the activities of the buyer. In addition, international laws provide additional protection for foreign investors/home owners.??Please note that most Mexican banks have been purchased by foreign conglomerates, so that if your trust comes from Banamex, you are actually dealing with Citibank. In the case of Santander, the bank is a subsidiary of the eponymous Spanish financial group in the case of Scotiabank it is a Canadian organization, etc. This situation can make some buyers more comfortable. If you would like to work with a reputable Mexican institution, Banorte is the largest independent Mexican bank.