I’ve previously talked about homeownership of foreigners here in Los Cabos and mentioned a fideicomiso, which is the Spanish word for a real estate trust. A real estate trust in Mexico is no different than a trust in the U.S. or Canada. It’s set up with a bank in Mexico, who acts as the administrator of that trust.

The owner of the property, meanwhile, is the trust that you set up. That trust owns the property, but you as the owner are the beneficiary of that trust. This gives you all the ownership rights to buy, sell, and improve the property.

It’s a very safe form of ownership that a lot of our clients back in the states and Canada set up to own their properties because of two main reasons: It allows survivability through your co-beneficiaries (allowing you to avoid probate) and it protects you in the event that you are sued. If you set up this trust, it protects someone from suing you for your property.

This is very commonly done with our clients because here in Los Cabos, we are in a restricted zone. Any property that’s within 100 km of a bordering country or 50 km of the ocean is a restricted zone, which is all of Los Cabos. This means that you have to set up your fideicomiso if you’re a foreigner.

“All foreign homeowners in Los Cabos need a fideicomiso.”

A fideicomiso is valid for 50 years and can be renewed in perpetuity. When you’re 200 years old, you can have renewed it four times. Actually, what ends up happening is that your heirs can renew that fideicomiso.

When a property is already in a trust and gets sold, the buyer (if it’s a foreign buyer), will assume that trust and save about $1,000 in the process. As long as there are a decent number of years left on a trust, I often see buyers assume that trust.

How much does this trust cost? It’s about $2,000 to set up, but every year after that it’s around $500 per year to the bank.

If you have any questions for me about real estate trusts or anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.

Nick Fong, Loscabosagent.com. info@loscabosagent.com, (+1) 619.837.2000 (US) (+52) 624.227.5766 (MX).