Chayote
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Land Ownership Question
Hey guys and gals,
I'm currently looking at buying myself a piece of land down in Mexico; however, I am in a predicament. I've read from several people here that it is
pretty easy to set up a corp/trust to buy land. But, I am also able to become a Mexican National pretty easy (both parents born in Mexico). I know if
I do become a national I will lose US consulate rights for legal help in case I ever run into legal trouble down there. I don't plan on getting myself
into any trouble but you never know. What experiences/recommendations do you all have about this? Should I buy it with a trust or become a national?
Thank you all.
p.s. I'm addicted to this forum.
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SFandH
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When you say "trust" what you really mean is a purchase using a "fideicomiso". Read about that. There are initial and annual costs involved.
I always advise people to hire a Mexican real estate lawyer to represent their interests.
This guy is in Rosarito Beach. I've spoken with him and recommend you contact him before buying. He can probably help with the decision you asked
about.
https://www.facebook.com/groups/534958289989059/
[Edited on 6-7-2017 by SFandH]
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bajagrouper
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You can be a duel citizen and not loose any of you USA rights, as a Mexican National you do not need a corp. or Fediconiso to purchase property.......
I hear the whales song
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SFandH
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Quote: Originally posted by bajagrouper  | | You can be a duel citizen and not loose any of you USA rights, as a Mexican National you do not need a corp. or Fediconiso to purchase property.......
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These are exactly the types of considerations I would want answered by a lawyer experienced in both US and Mexican immigration/real estate laws.
[Edited on 6-7-2017 by SFandH]
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gnukid
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An attorney is of little help as most don't have experience in the realties of being a dual citizen and their education is limited while rules change.
If it were me, a fidicomiso or corp is a lot of money and responsibility. I would absolutely get mexican citizenship and be able to buy and hold
properties with lower costs and restrictions. You can also give up citizenship in any country if you change your mind later. The USA consulate in
mexico provides very few benefits to you in mexico that being a citizen in mexico does not provide.
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gsbotanico
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A fideicomiso is usually a 50 year lease of the property. It is not the purchase of the property. The property is put into a bank trust. But this
only applies to land in the coastal strip of 50 km and border strip of 100 km. US citizens can purchase land in the interior.
If you can legally gain Mexican citizenship through your parents, this is definitely the route to go. I know someone who did it to buy coastal land.
There is no problem with dual citizenship with Mexico and the US. Both countries now recognize it.
The problem in Baja California is being sure that the person selling the land has proper title to the property. Many parcel newly developed have
clouded titles because the seller gained the property by squatting on it. If a claimant comes forward, often an ejido, there could be big problems.
This happened with Campo López, south of KM 55 and north of La Misión. It's now called Rancho Mezquitito. Señor López wasn't the legal owner.
If you're buying into an area with other longtime US citizens, there shouldn't be any problem. but title insurance is very helpful.
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SFandH
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That's not true. When you lease property the owner does not relinquish ownership, he holds the title. When you buy via a fideicomiso the owner does
relinquish ownership. He's gone. There is a transfer of title. With a fideicomiso the bank holds title to the property and you have a 50 year contract
(the fideicomiso) with the bank for the sole use of the property. You can sell it, will it, and renew the fideicomiso contract.
A fideicomiso is not a taxable foreign trust as defined by US tax law.
Also, Mexican law limits real estate leases to 10 years. You can sign a lease contract for a longer period but it is fundamentally an invalid
contract, it won't hold up in court.
Of course, see your lawyer before buying.
.
[Edited on 6-7-2017 by SFandH]
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charliemanson
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Don't know your total situation, nor would I expect you to go with anybody advice here BUT just know a Mexican attorney is the American equivalent of
a US notary and a Mexican Notario is the law here. Many use attorneys who in turn give everything to the notario and charge you with a percentage to
do so.
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SFandH
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Yikes! A Mexican Notario is a Mexican attorney appointed by the state to perform the job of being a Notario, which is to validate and record real
estate transactions. Like US attorneys, Mexican attorneys have degrees from law schools and are licensed to practice law.
[Edited on 6-7-2017 by SFandH]
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PaulW
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A fideicomiso is not a trust as defined by US law.
False
A couple of years ago the Fid was rules as a trust and not taxable by the US.
Says that on my turbotax and from several messages that posted the actual ruling.
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SFandH
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| Quote: Originally posted by PaulW | A fideicomiso is not a trust as defined by US law.
False
A couple of years ago the Fid was rules as a trust and not taxable by the US.
Says that on my turbotax and from several messages that posted the actual ruling. |
I know about the IRS ruling. My understanding is a fideicomiso was ruled NOT a foreign trust by the IRS and therefore not subject to US tax, as
foreign trusts are:
Tax consequences can apply to the U.S. owners and U.S. beneficiaries of foreign trust, and to the foreign trust itself.
https://www.irs.gov/businesses/international-businesses/fore...
IRS rules that Mexican Fideicomiso (Mexican Land Trust Arrangement or MLT) is not a trust for U.S. income tax purposes. No Form 3520A or Form 3520
filing requirement.
http://www.andersentax.com/pressroom/irs-rules-mexican-fidei...
But we agree on the important issue, a fideicomiso is not a US tax issue.
Hire a lawyer.
[Edited on 6-7-2017 by SFandH]
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MrBillM
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A Question of Conflict ?
Would being a Duel citizen mean you're fighting with yourself ?
Or others ?
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BajaBlanca
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I would become a citizen. It is automatic in your case, you buy the property outright in your name.
Also, no matter what, the US is not ever going to come running to help you out in Mexico...at least I would be very surprised if they did. Even as
an American, you would have to hire a Mexican attorney to review any legal issues.
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Leo
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As most responders say: become Mexican first if it's that easy. Then buy real-estate right out without the cost of Fidecomiso.
But there are more sinkholes in buying real-estate to watch out for, Gringo or Mexican. Several books discuss this. One of them is mine; 'Living or
Retiring in Mexico' is available on Amazon as e-book and hardcover.
The grass is always greener....
and so, there is always a better spot in Baja
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Chayote
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Thank you to all that posted on this. I was in Tijuana this weekend and looked into becoming a citizen. It is going to be relatively easy for me to
become nationalized. They informed me of all the documents I need and told me I can continue the process in Los Angeles. I was scared of the tax
situation but have looked into it and does not seem super complicated(I guess my overpriced Accounting degree is coming in handy).
Leo I'll definitely be looking into getting a copy of that book soon.
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