BajaNomad

Mexican Proposal to Allow Foreigners to Own Coastal Property

mrfatboy - 4-10-2013 at 03:05 AM

Someone posted this on trip advisor- puerta vallarta and I wanted to pass it along.


Representatives of the Institutional Revolutionary Party (PRI) in the the Chamber of Deputies, the lower house of Congress, are proposing a constitutional reform that would allow foreigners to own property along the country's coasts, which has been banned based on the argument that this protects national territory.*

The coordinator of the PRI deputies, Manlio Fabio Beltrones, said the constitutional reform will end feigning, subterfuges and even acts of name lending (prestanombres) used by citizens of other countries in order to acquire a beach area residence.

Beltrones said that the goal is to amend Article 27 of the Mexican Constitution in order to give [foreigners] legal certainty, insofar as it is an evident and known fact that foreigners legally purchase properties through trusts [fideicomisos] or corporations/partnerships because they cannot own them as individuals.

The Sonoran politician said that the reform would only allow the acquisition of properties for family use.

This would encourage investment, he said, and municipalities would benefit additionally from the collection of property taxes.

Beltrones said that currently a foreigner can buy a residence in Puebla, in central Mexico, or next to the National Palace, but he/she cannot own an apartment at beaches such as those in Huatulco, Veracruz, Sinaloa or Guerrero.

"This just seeks to legalize what [is now being] done, insofar as it is obvious [and] because we must not close our eyes. Not effecting this reform is to legitimize a means, through trusts or corporations, that does not give legal certainty," Beltrones explained at a press conference.

* MEXIDATA.INFO NOTE: Article 27 of the Mexican Constitution, in the concluding sentence under point I, states: "In a zone of 100 kilometers [inland] the length of the [nation's] borders, and 50 kilometers on the coasts, under no circumstances may foreigners acquire direct control/ownership of lands or waters."

The proposed amendment thereon, as just submitted in the Chamber of Deputies, reads: "In a zone of 100 kilometers [inland] the length of the [nation's] borders, and 50 kilometers on the coasts, under no circumstances may foreigners acquire direct control/ownership of waters. In the case of lands, they may be acquired when they are exclusively for non-commercial residency use."

This latest initiative is cosponsored by deputies of the PRI and PAN (National Action Party), including Manlio Fabio Beltrones (who has long been a highly important player and influence in Mexican politics and The System). For both reasons, it would seem to up-the-odds that this decree, and constitutional reform, could be ratified.

http://mexidata.info/id3588.html

schwlind - 4-10-2013 at 05:28 AM

Thanks... we'll have to see if anything comes of this..

Linda

redmesa - 4-10-2013 at 06:25 AM

This could bring on many changes. Good, bad, and....

dtbushpilot - 4-10-2013 at 07:18 AM

What are the chances that this "opportunity" won't cost current fide holders additional money? What are the chances that this process will be streamlined and at a reasonable cost?

The questions are rhetorical of course, no answer required....

DianaT - 4-10-2013 at 07:32 AM

Quote:
Originally posted by dtbushpilot
What are the chances that this "opportunity" won't cost current fide holders additional money? What are the chances that this process will be streamlined and at a reasonable cost?

The questions are rhetorical of course, no answer required....


Those were my first thoughts. I am just guessing we would have to buy our way out of the fideicomisos and then maybe pay additional transfer fees? And would the existing bank trusts still be legal?

Also, they mention buying it strictly for family use, so I wonder if those who have Mexican corporations and use their property rentals, etc., if they would still be legal.

It certainly will be interesting and for new buyers, it should greatly reduce their buying costs, if they are buying it for family use.

Lots of those rhetorical questions hanging around -- :yes:

dtbushpilot - 4-10-2013 at 07:38 AM

I try not to be cynical about these things but it can be difficult. I chalk it up to the price of living in paradise.....there's no free lunch...

dtbushpilot - 4-10-2013 at 07:44 AM

I really do hope that the fide process can be replaced with a simple title process. It will be a little late for us but it could really boost foreign investment in MX. We have 4 fide's, we didn't plan it that way but that's what we have. On our last property purchase the cost of the fide was more than the price of the lot....no, really. I know a lot of people that would like to buy and build in Baja but won't take the risk on a title process that they don't understand.

Let's keep our fingers crossed...

DianaT - 4-10-2013 at 07:48 AM

Quote:
Originally posted by dtbushpilot
I try not to be cynical about these things but it can be difficult. I chalk it up to the price of living in paradise.....there's no free lunch...


Yes, I agree. I find this one statement very interesting and wonder what might have been lost in the translation.

""This just seeks to legalize what [is now being] done, insofar as it is obvious [and] because we must not close our eyes. Not effecting this reform is to legitimizea means, through trusts or corporations, that does not give legal certainty," Beltrones explained at a press conference.

Ni modo, we just have to wait and see. The PRI certainly has changed over the years.

Islandbuilder - 4-10-2013 at 08:11 AM

And of course the banks will just shrug and kiss the millions they make from trusts goodbye. And the lawyers who cut and paste trust documents will find another way to make free money?

Seems like an obvious way to increase foreign investment, but is it good politics to tick off actual voters in favor of potential investors?

There will almost have to be some sort of quid pro quo to get the banks and lawyers on board, and guess who will be paying for that?

tripledigitken - 4-10-2013 at 08:19 AM

Possibly a good thing for new buyers. Those with fido's could face having to convert their fido's to new title doc before they can sell their properties, at say $5k-$10k.

DianaT - 4-10-2013 at 08:49 AM

Quote:
Originally posted by tripledigitken
Possibly a good thing for new buyers. Those with fido's could face having to convert their fido's to new title doc before they can sell their properties, at say $5k-$10k.


We have had a couple of Mexican citizens interested in our house and we were quoted a fee of just over $2,000.00 to end our trust, but as always, it seems to be different for different banks. Gaining new title is another matter.

It sounds like the new law, IF it passes, would pretty much ban the bank trusts, so if they are no longer legal, well................ so much speculation with which to boggle the mind.

Willian Randolph Hearst is rolling over in his grave. :biggrin:

El Jefe - 4-10-2013 at 09:50 AM

And won't it be interesting if they pass this and set a date in future for it to take effect? Real estate transactions will stop dead until the new system takes hold.

EngineerMike - 4-10-2013 at 05:19 PM

While banks & liars, er, I meant lawyers would lose a small cottage industry, there would be other beneficiaries.
Developers would have a more liquid market to sell condos & property. Local property prices would likely rise in popular areas, and certainly transactions would increase, hence tax collections would go up. Gotta be a lot of municipality workers in favor.

MitchMan - 4-11-2013 at 07:29 PM

I don't see why this proposed change would render currently existing fideicomisos invalid.

I do believe that the banks will definitely charge a fee for having the trustee sign over the property to the fido beneficial owner, and, I think that there will be other required paper filings that will cost money, but the big one is the fee that notarios will charge for their required processing and sign-offs. Should the proposal come to pass, there will probably be the usual "work-out" period where the administrative people learn what to do as they never really get schooled in any official and comprehensive way, so it will be incumbent upon the fido beneficiary to pay for local legal assistance (as if the abogados actually would read sufficiently to know what to actually do in new circumstances).

My guess is, it won't be cheap...but it should be.

DENNIS - 4-11-2013 at 08:30 PM

This foreign ownership ball has been bouncing back and forth since.....forever. It is well traveled lip service to promote investment and confidence, but don't be holding your breath. It may change about the same time we see those promised jurys in court rooms.

CortezBlue - 4-12-2013 at 07:49 AM

Quote:
Originally posted by dtbushpilot
What are the chances that this "opportunity" won't cost current fide holders additional money? What are the chances that this process will be streamlined and at a reasonable cost?

The questions are rhetorical of course, no answer required....


I would be happy to pay a small transfer fee, maybe $500 to $1000 to get out of paying $400 a year every January!!

larryC - 4-13-2013 at 07:57 AM

Quote:
Originally posted by CortezBlue
Quote:
Originally posted by dtbushpilot
What are the chances that this "opportunity" won't cost current fide holders additional money? What are the chances that this process will be streamlined and at a reasonable cost?

The questions are rhetorical of course, no answer required....


I would be happy to pay a small transfer fee, maybe $500 to $1000 to get out of paying $400 a year every January!!


How did you get a $400 fee? Mine is $550 and I thought that was good. Guess I was wrong again.

MitchMan - 4-14-2013 at 10:03 AM

I pay $400 USD plus $44 USD of IVA. I read somewhere that it was possible to 'negotiate' down the fee AT THE TIME OF THE CREATION OF THE FIDEICOMISO during the purchase process...however, no one told me that at the time of the purchase. Also, I understand that Mexican Banks are not the only entities or companies that can be trustees in fideicomisos and that those other entities would most likely charge much less per ongoing years.

My big question is whether I can change my trustee to one of those other entities at this point in order to enjoy a lower annual fido fee without incurring massive costs to do so(?)

CortezBlue - 4-14-2013 at 01:04 PM

Quote:
Originally posted by larryC
Quote:
Originally posted by CortezBlue
Quote:
Originally posted by dtbushpilot
What are the chances that this "opportunity" won't cost current fide holders additional money? What are the chances that this process will be streamlined and at a reasonable cost?

The questions are rhetorical of course, no answer required....


I would be happy to pay a small transfer fee, maybe $500 to $1000 to get out of paying $400 a year every January!!


Sorry, but it is a typo, I think it is a bit over $500, my bad.

How did you get a $400 fee? Mine is $550 and I thought that was good. Guess I was wrong again.

Leo - 4-14-2013 at 03:26 PM

Those Fees are all over the place as mine is 330 per annum. Was 300 originally and is at Bancomer probably going up 10% next year.

woody with a view - 4-14-2013 at 03:51 PM

Quote:
Originally posted by DENNIS
This foreign ownership ball has been bouncing back and forth since.....forever. It is well traveled lip service to promote investment and confidence, but don't be holding your breath. It may change about the same time we see those promised jurys in court rooms.


c'mon BIG D,

we all know that things will change when it is least beneficial to our interests... just the way it is Amigo!