The Restricted Zone
Under Mexico's Constitution (Article 27) and the Foreign Investment Law, foreigners cannot directly own land within the "restricted zone":
- 50 kilometers (31 miles) from any coastline
- 100 kilometers (62 miles) from any international border
🗺️ Restricted Zone Coverage
Most popular expat destinations fall within the restricted zone, including:
Cancun • Puerto Vallarta • Playa del Carmen • Los Cabos • Mazatlán • Tijuana • Ensenada • Tulum
💡 Unrestricted Areas: Popular interior cities like Mexico City, San Miguel de Allende, Guadalajara, and Oaxaca are outside the restricted zone. Foreigners can own property directly there.
Fideicomiso (Bank Trust)
To own residential property in the restricted zone, foreigners must use a fideicomiso - a bank trust where a Mexican bank holds legal title while you retain all ownership rights.
How It Works
- Mexican bank is the trustee (holds legal title)
- You are the beneficiary (have all rights to use, rent, sell, inherit)
- Trust is valid for 50 years and renewable indefinitely
- You can sell, lease, or will the property as you wish
- Bank cannot take or use the property - they're administrators only
Costs
- Setup fee: $500-2,000 USD (one-time)
- Annual fee: $500-800 USD (varies by bank)
- Permit fee: ~$2,000 USD (SRE foreign investment permit)
⚠️ Choose Your Bank Carefully: Shop around. Annual fees vary significantly between banks. Some expats have reported banks increasing fees substantially after setup. Get fee schedules in writing.
Ejido Land - CRITICAL WARNING
Ejido is communal/agricultural land that CANNOT legally be sold to foreigners. Any "purchase" is void. You will lose your money with zero legal recourse.
What is Ejido?
Ejido land is communal property held by rural communities since Mexico's agrarian reform. It was designed to be inalienable - meaning it cannot be sold, especially not to foreigners.
Why People Get Scammed
- Prices are often 50-80% below market rate (too good to be true)
- Sellers claim land has been "converted" or "regularized"
- Fake documents may look official
- Some notarios (notaries) are complicit in fraud
- You may occupy the property for years before being evicted
Recent Cases
Our Enforcement Tracker documents multiple cases of Americans losing $100,000+ on ejido properties in San Miguel de Allende, Tulum, and Oaxaca. In every case, the buyer lost everything.
💡 Protect Yourself: ALWAYS hire an independent lawyer (not recommended by the seller) to verify land status in the Public Registry of Property. This costs ~$300-500 and can save you everything.
Buying Process
Find Property & Make Offer
Work with reputable agents. Negotiate price. Sign promissory agreement (promesa de compraventa) with deposit (usually 10%).
Due Diligence
Hire independent lawyer. Verify title in Public Registry. Check for liens. Confirm property is NOT ejido. Verify seller's identity and ownership.
Obtain SRE Permit (Restricted Zone)
Apply to Foreign Ministry for foreign investment permit. Takes 2-4 weeks. Required before fideicomiso can be established.
Establish Fideicomiso (Restricted Zone)
Choose bank. Submit documents. Bank reviews and approves trust. Takes 4-8 weeks typically.
Close with Notario
All property transactions must be done through a notario público (licensed notary). They verify documents, collect taxes, and register the transfer.
Registration
Notario registers deed in Public Registry. You receive escritura (deed). Process complete.
Closing Costs
Expect to pay approximately 5-8% of purchase price in closing costs:
- Acquisition tax (ISABI): 2-4% (varies by state)
- Notario fees: 1-2%
- Registration fees: 0.5-1%
- Fideicomiso setup: $500-2,000 USD
- SRE permit: ~$2,000 USD
- Legal fees: $1,000-3,000 USD
- Appraisal: $300-500 USD