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Real Estate in Baja California Sur: Market & Myths

by 2seasWP on October 24, 2018
Real Estate in Baja California Sur: Market & Myths

Home pictured, Casa Horizonte, Querencia

Our Market in Los Cabos continues to improve, and especially real estate in Baja California Sur. It’s getting stronger every year. Cabo’s Real Estate association has worked tirelessly in developing strong standards of practice and adopting the Code of Ethics from the National Association of Real Estate. We have a comprehensive Multiple Listing Service, with accurate information.

Buying property in Los Cabos can seem like a daunting task. By dispelling some widely disseminated myths, we prove that the process is not very unlike buying property in the United States or Canada, albeit with some obvious differences in terminology.

Foreigners Can’t Own Property in Mexico

NOT TRUE. In most of Mexico, foreigners can own land outright with a fee simple title, which is the same in the United States. Only in restricted zone – 50 km (31.05 miles) from the ocean and 100 km (62.1 miles) from the borders – is it true that foreigners can’t hold fee simple title. But the solution to this is an elegant and solid one.

The entire Baja Peninsula is considered a “Restricted Zone” so that includes Real Estate in Baja California Sur. When a foreigner buys property in the Restricted Zone, title to the real property is transferred to a Mexican bank, which holds it in trust for the foreign buyer as the beneficiary. Foreign buyers, however, have all the rights of ownership. What they own under a bank trust (called “Fideicomiso”) is the right of ownership rather than the real estate itself. It is good to be aware of this legal distinction, although in practice it makes virtually no difference.

MYTH # 2
A Bank Trust (Fideicomiso) is a Lease Agreement

NOT TRUE. Under a bank trust (Fideicomiso) the beneficiary (buyer) has all the rights of ownership: the right to buy, sell, lease, use, bequeath, improve, transfer and encumber. At lease grants only the right of use.

The Mexican Government can take away Foreigner’s property at any time

NOT TRUE. The bank trust is established by the national government and gives foreigners the same rights to ownership as Mexican citizens. The only difference is that they never receive the actual fee title. It is held in trust for them by a bank for a term of 50 years, and is renewable in increments of 50 years.

Do you have more questions? Please contact us today so we can answer any questions you have.

Looking for real estate representation regarding either buying or selling a Los Cabos property? Please reach out to our team of 2 Seas Los Cabos agents at:

Tel: +52 624-105-2547

Tel: +1 520-204-5450



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