Buying in Mak Nuk Village
Mak Nuk Village is being developed and will be operated by Mak Nuk Development S DE RL DE CV. The land on which Mak Nuk Village is located is a deeded property with all proper title searches completed and registered by a qualified Notary. The property is unencumbered by liens, taxes, prior owners or any government encumbrances. All required permits and approvals have been obtained for development of Mak Nuk Village.
Buying in Mexico, How can I as a foreigner own property in Mexico?
In 1989, regulations were passed to "promote Mexican Investment and Regulate Foreign Investment". Just recently, those regulations also became law and included significant and beneficial changes. The most beneficial change increased the length of the renewable trusts to 50 years. Now foreign owners can extend their trusts for an indefinite number of 50 year terms. The relaxed political environment has given non-Mexicans their first real access to pristine coastal property.
As a result of Mexico's commitment to tourism, and the recent relaxation of its Foreign Investment Law, resort properties in Mexico are expected to develop at a rapid pace. What once may have been seen as a complex form of property ownership is quickly becoming familiar to non-Mexican buyers.
Mak Nuk Village ownership will be through Fideicomiso Bank Trust. We have set up the purchase of Mak Nuk Village condominium units through our attorney and a Notary Public and the Bank of Santander for establishing your Fideicomiso Bank Trust. Of course you may prefer to have a Mexican Attorney and Notary of your choosing to handle or review these items.
Here are some frequently asked questions about buying property in Mexico:
Q: I have always heard non-Mexicans cannot buy coastal property in Mexico. Is that true?
No. While it was once true, times have changed. Prior to 1973, foreigners were not allowed to hold legal title or to exercise direct titles to real property in an area located within 64 miles of Mexico's borders and 32 miles of its coastlines. But laws passed in 1973 and 1993 (NAFTA) have made it possible for foreigners, foreign firms and Mexican firms with foreign participation to acquire interests in coastal real estate through a bank trust (Fideicomiso).
Q: Who is involved in this bank trust?
Three parties. The seller in the property is the Trustor. The bank is the Trustee (Fiduciario), and the buyer, or Beneficiary, is the Fideicomisario.
Q: How does the trust operate?
Title to the property is transferred to a trust to a Mexican bank acting as trustee. The trust agreement is formalized by the issuance of a permit from the Mexican Ministry of Foreign Affairs. The lot or home buyer is designated as a Beneficiary in the Trust and the Beneficiary rights are recorded in the public record by a Notary Public.
Q: What is the role of the Notary Public?
The Notary Public is the most important person you will deal with when you make a property investment in Mexico. Do not confuse the role of the Notary Public in the US or UK with its counterpart in Mexico: they are quite different. In the USA for example, almost anyone can become a Notary Public. Not so in Mexico where the role is appointed directly by the State Governor, the highest office in the State.
The Notary Public has the power to witness and certify important business documents which require absolute authenticity. The appointment also holds responsibility for the management and secure storage of original records. Notary Publics must be Mexicans of at least 35 year in age, they must have a degree in Law, have 3 year's work experience at a Notary Public office and they must pass a stringent exam. Those who pass, in time, are appointed as Notary Public by the State Governor. Under Mexican Law, the deed to the property must be prepared by a Notary Public. The Notary Public will ensure that all documentation and permits are in order so that the transaction can proceed.
Q: What are my rights as a buyer?
You have the right to use, lease, improve or sell your property without restriction. You may also transfer your rights to a third party, or pass it on to named heirs.
Q: Is the trust renewable?
Yes. According to the Foreign Investment Law passed in 1993, trusts can be renewed for an indefinite number of successive 50 years periods. In effect they run in perpetuity.
Q: How are closing costs calculated and who pays for them?
Closing costs are determined by the declared value which is usually the same as the sales price. The value becomes the basis for all related taxes and fees. Generally, the seller pays for real estate fees, the buyer is responsible for the transfer tax and the cost of establishing the bank trust (if it isn't already in existence), notary fees, registration fees, tax appraisal fees and trust permit fees. The purchaser's total closing costs average 5% of the purchase price.
Q: How much will I be charged for property taxes?
Mexico's annual property taxes are .25% of the assessed value for tax purposes.
Q: If at a later date, I decide to sell my property, can anyone buy it?
Yes, if the new buyer is also a foreigner, you simply assign your beneficial interest. If the new buyer is a Mexican National, you can instruct the bank to endorse the title in favor of a buyer.
Q: If the buyer is a foreigner, is his interest limited to the balance of my 50 year trust?
No, upon application, a foreign buyer automatically receives his own renewable 50 year permit.
Q: Do many foreigners currently own coastal property in Mexico?
Today, thousands of foreign owners enjoy their Oceanside resort property, many have benefited from property appreciation.
Q: Is there capital gains tax on your property in Mexico if you sell?
With a 'Fideicomiso' and your home being your primary Mexican residence, you are exempt from capital gains when you sell.
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