New Reform on Property Ownership in Mexican Tourist by Foreigners

New Reform on Property Ownership in

Mexican Tourist Areas by Foreigners

A new initiative to reform Article 27 of the Mexican Constitution with regards to the rights of foreign nationals to own property in Mexico, has been launched.  This initiative has been presented by el Diputado Federal (Mexico’s House of Representative’s member) Manlio Fabio Beltrones and has now been approved by a House of Representatives Committee and will now go for a full debate and final vote in the HR (House of Representatives), to then go for a vote in the Mexican Senate.

Article 27 of the Mexican Constitution, excludes foreigners from acquiring property ownership in a 50 kilometers strip along a the Mexican coasts (Mexican beaches) and 100 kilometers along the Mexican frontiers.  Although, at present Article 27 of the Mexican Constitution, does permit foreign nationals to acquire property in those areas through the acquisition of a Trust, or the creation of a Mexican Corporation, whichever the case may be.

This reform will end, as described by the HR Manlio Fabio Beltrones, uncertainty in the present process through the use of simulation, whereby foreign nationals are required the use of a Trust (Fideicomiso) in order to acquire any rights to the use of a property in the above mentioned areas, which in turn has given way to foreigners been abused and taken advantage of by unscrupulous nationals who have used the fiedicomiso requirement to defraud foreigners wanting to acquire property in Mexico.

Although the new reform, as applied to Article 27 of the Mexican Constitution, will still require foreign nationals to register with the Secretary of Foreign Relations offices and will continue to apply the Calvo Clause (http://www.sac-be.com/the_calvo_claus.shtml) as a means of protection to Mexico’s sovereignty rights, it is believed to provide more certainty for foreign nationals as to their actual rights in their investment and property acquisition and avoid a cumbersome Trust (Ficeicomiso) setting up process, and further increase foreign investment in Mexico’s tourist areas.

The new reform will apply to property for residential use only, and not for any type of commercial use.

Rights to the use of waters in coastal areas will not be part of the new reform to Article 27.  Furthermore, registering with the Secretary of Foreign Relations, which would declare them to be considered as nationals and not able to invoke the protection of their governments with respect to their ownership of property in Mexico (see Calvo Clause above), is a must.  Failing to do so, may mean facing the risk of losing their rights to the acquired property.

The modification to Article 27 of the Mexican Constitution are been looked at as an important step towards an increase by foreign nationals in the acquisition of land and tourist residences in our area according to Juan Pablo Mirabent Pizarro, a member of the Tourist Investment State Committee and other elected officials in Quintana Roo.

This article courtesy of Enrique (Henry) Saldana Mexico Realty Solutions moneylendingbus@hotmail.com; www.mexicorealtysolutions; www.mexicohomerealtycenter.  Tel: (984) 147-1305, Cel: (984) 111-8743.