BajaPro Real Estate Sales | Las Gaviotas Rosarito Beach, Baja Mexico

Owning Property in Mexico
There is a lot of misinformation about holding property in Mexico – we will try and clear up some of the misunderstandings. Contrary to popular belief, foreign citizens can own property fee simple in the interior of Mexico. Land that runs along Mexico’s coasts and border areas is a restricted area that was established under the Mexican Constitution and extends 100 kilometers (about 62 miles) deep along the coasts. Most of Baja is included in this restricted area. The Rosarito Beach area requires a Mexican Bank Trust for a Foreigner to enjoy owning a home in “The Baja” as is the case along any of Mexico's costal areas.

The Mexican Bank Trust
The Mexican Bank Trust was created in the early 70’s to promote tourist and retirement investments along popular coastlines by Mexican President Echeverria, which authorized the 30-year Bank Trust program. This is the most secure method to hold real estate in Baja California. Your Bank Trust must be established at an authorized Mexican Bank in their Trust Department. In 1989 President Salinas mandated the 30 year Trust be extended for an additional 30 years. Then, December 27, 1993, President Salinas extended the Trusts from 30+30 year arrangement to the new 50+50 year time period. The property you hold in a Bank Trust is yours to improve, build, sell, leave to your estate, etc. You’ll enjoy all the same rights you have in your U.S. fee simple real estate via the Bank Trust. Your Family Trust in the USA can also be the owner of the Bank Trust if you so desire. There are several Subdivisions in the area that were set up as a Master Bank Trust by the developers 30 years ago. Two of those subdivisions in the Rosarito Beach area are San Antonio Del Mar and Las Gaviotas. They both had the original 30-year Trusts, which expired March 2003. All the owners requested their new 50 + 50 Year Bank Trusts and those new Trusts have now been issued. When you decide to sell your home, in all probability, another foreign person will be purchasing your Bank Trust Rights. You will write a letter of instruction to the Bank that will include your new Buyer’s name and beneficiaries. The new Buyer can assume the remaining years of the Bank Trust or they can apply for a new 50 + 50 year Bank Trust. It is the Buyer’s choice. If you sell your Trust Rights to a Mexican National, he has the option to take title in his name in the Trust or remove the property from the Trust and take title in “Escritura” (Mexican National form of Ownership). Sometimes the Mexican National will opt to pay the annual Trust fee and stay within the Trust, especially, if his most likely buyer would be another foreigner.

The Mexican Land Lease
Many people ask, “Can I get a 99 year land lease?” A land lease for more than 10 years is not legal and never has been. Not the 10 + 10 + 10 year arrangement, either. If you enter into a 10 + 10 + 10 agreement with a Mexican landowner and at the end of the first 10 years the landowner decides he does not want to recognize that second ten-year lease you thought you had, he does not have to do so. You have no recourse, because you entered into that agreement which was designed to circumvent Mexican Law, thereby giving you no legal status to use the Mexican Court System in such cases.

Property Taxes, Trust Fees and Homeowner’s Insurance
The annual property taxes are so low that when we tell buyers that a home with a value of $350,000 is $200.00 a year, they think we’re nuts! It’s true. There is a one-time tax that is paid at closing that is an acquisition tax. Your annual fees on a $300,000 home would look something like this: Annual Bank Trust fee @ $550.00, Property Tax @ $200.00, Homeowners insurance @ $350.00, and HOA maintenance fees at $150.00 a month for an annual expense of $2,850 for the year.

How does a Mexican Property Purchase Closing Work?
The laws in Mexico provide very well for Foreign Buyers. The system is clear and there are a lot of checks and balances that are in place to protect your real estate investment. When an offer is made and accepted by all the parties, then we set about to obtain the survey, current appraisal, Letter of Instruction from the Seller to the Bank that holds the Trust to place in the new Buyer’s names, which includes naming their beneficiaries. We open the file with a Notary or "Notario". A lien waiver certificate is required at closing, a letter from the bank stating the Bank trust fees are current, the property tax receipt for the current year and a letter from the Home Owner’s Association that all fees are current and there are no pending assessments either with the Association or the Federal Zone. The Notario verifies the “Chain of title” and will not sign the document until all the required documents are in order and are within the required dates of no longer than 6 months old for the appraisal and survey.

Who is a "Notario" in Mexico?
A Notary in Mexico is NOT the same as a Notary in the USA. The Mexican Notaries are held in high esteem and are the only non-government person who has the right to use the Seal of Mexico. All Notaries must be Lawyers and in order to qualify as a Notary. Frequent Continuing Education courses are required for all Notaries by the Mexican Government. There are only about 20 Notaries between Tijuana and Rosarito Beach and they must “sign off” on every marriage, will, real estate transaction, etc. When you close a transaction with a Notary, the fees are paid to his office and after the Buyers and Sellers sign and the Seller is paid, then the recording of your documents are completed by the Notary both in the local municipality and in Mexico City. The Notary pays the acquisition tax in the Buyer’s behalf and when your Trust Deed is finished by the Notary, all the documentation that was required for your closing is bound in a legal size book for your safe keeping including the tax return showing your taxes were paid as required by law.

What happens to my Bank Trust Property if I die?
You list your beneficiaries in the Bank Trust document when the Bank Trust is placed in your name. Should something happen to you, your heirs will need to take an official copy of the USA death certificate and have it translated into Spanish. You will then take those two documents to the Secretary of State from your State and request an Apostle which is an internationally recognized document that the attached death certificate is authentic and will be recognized by the bank to place the Bank Trust in your heir’s name. This fee is $26.00 in California & in Arizona it is $3.00. You can also have a Mexican Will for other assets.

Is Title Insurance Available in Mexico?
Yes! BajaPro works together with Stewart Title Insurance of Baja to provide Title Insurance.