If you're not a Mexican citizen, you buy a home or condo in Tijuana and Rosarito through a bank trust, known in Mexico as a fideicomiso: a Mexican bank holds the title on your behalf, and you keep all the rights of an owner. It's a common, secure process with clear rules.
Here's why it works this way, how the trust works, the steps to buy, what it costs and what rights it gives you.
Why Baja California uses a bank trust
Mexico's Constitution sets aside a strip of land 100 kilometers (62 miles) along its borders and 50 kilometers (31 miles) along its coasts, known as the restricted zone. Inside it, foreigners can't hold direct title to real estate. Tijuana and Rosarito are entirely inside that strip.
That doesn't mean you can't buy. It means you buy through a Mexican bank, with authorization from Mexico's Ministry of Foreign Affairs.
How the fideicomiso works
In a fideicomiso, a Mexican bank holds the property's title for your benefit. You're the beneficiary, with all the rights of an owner: you can live in it, rent it out, remodel it, sell it and pass it on to your heirs. The bank can't sell it, rent it out or make changes without your written instruction.
The trust lasts 50 years and can be renewed as many times as you want, for another 50 years each time.
If you're a Mexican citizen, you don't need one
The restriction applies to foreigners. If you hold Mexican citizenship, even if you're also a U.S. citizen, you can take title in your own name like any Mexican buyer, with no trust.
This applies to a lot of people in the region. Children of Mexican parents who were born in the United States are entitled to Mexican nationality and can apply for it at a Mexican consulate. If that's your case, it's worth checking with the notary before you buy.
Steps to buy
- You choose the property and reserve it.
- You sign the purchase contract with the seller or developer.
- A bank is chosen to act as trustee.
- The permit from the Ministry of Foreign Affairs is processed. The bank or the notary usually handles it, and it takes a few weeks.
- You sign the deed and the trust before a notario público.
- The deed is recorded at the Public Property Registry.
One key difference from the U.S.: a Mexican notario público is not the same as a notary public. A notario is a lawyer appointed by the government who verifies that the property is in order and certifies the sale. Every real estate purchase in Mexico goes through one.
If you buy pre-construction, as at RISE, you sign your contract when you reserve, and the trust is set up at closing, when your condo is delivered.
What it costs
The trust has two costs of its own:
- Setup: includes the bank's fees and the Ministry of Foreign Affairs permit. It generally runs between $1,500 and $3,500 USD.
- Annual bank fee: usually between $500 and $1,000 USD a year.
On top of that are the closing costs any buyer pays, Mexican or foreign: the acquisition tax, the notary's fees and recording. Figures vary by bank and notary, so ask for a quote before you sign.
Your family inherits without probate
When you set up the trust, you name substitute beneficiaries: the people who take over your rights if you pass away. That way the property goes to them without probate in Mexico. You can change them later, whenever you want.
Renting or selling
You can rent out your property, short or long term, paying the corresponding taxes in Mexico.
If you sell, the bank signs the sale on your instruction. If the buyer is a foreigner, a trust can be set up in their name; if they're Mexican, title goes to them directly.
What to keep an eye on
- Make sure the purchase always goes through a notario público.
- Make sure the trust names your substitute beneficiaries.
- Pay the bank's annual fee on time.
- Renew the trust before the 50 years are up.
Buying at RISE as a foreigner
RISE is in Tijuana, 10 minutes from the San Ysidro border crossing, and many of the people who ask us about it live or work in San Diego. If you buy with us as a foreigner, we walk you through the whole process: the contract, the bank, the permit and the signing before the notary.
If you're interested, get in touch and we'll explain how your purchase would work, step by step. You can also see the full project on the RISE page.