important points you need to know about it if you are from overseas.

Real estate TRUST; your ally to purchase a property in CABO.

Four important points you need to know about it if you are from overseas.

Mexican laws have restrictions on foreigners who wish to acquire real estate in coastal areas or areas near the border, known as «restricted zones.»

Here we offer you a complete and simple guide to understand how to acquire property on the coast of Baja California Sur, the necessary legal mechanisms, and some practical tips to ensure a safe purchase for you.

What is the «restricted zone» and why is it important for you to know about it?

In Mexico, the Constitution establishes that foreigners cannot directly own property within 50 kilometers of the coast or 100 kilometers from the borders. This area is known as the restricted zone. However, this does not mean that you cannot acquire property in these destinations; a bank trust is the solution for this.

And now that you know that Baja California Sur is in a restricted area, you should know that YES you can buy a property, to do so you have to use a Real Estate TRUST, we will tell you how the TRUST works to protect your property.

How Does Bank Trust Work?

A bank trust is a special contract in which a Mexican bank acts as trustee to manage the property on behalf of the foreigner, who is the direct beneficiary of the trust. Through this mechanism, you can acquire and use a property in the restricted zone with the same rights and benefits as an owner.

Trust Structure:

• Bank as Trustee: The bank acts as the legal owner of the property. This does not mean that the bank can use or sell the property; it is simply the entity in charge of holding title on behalf of the foreign beneficiary.
• Beneficiary: You, as the foreign buyer, are the beneficiary of the trust. This allows you to enjoy the property, rent it out, remodel it, and even sell it in the future.

How long will my trust last?

Trusts are typically established for 50 years and are renewable. At the end of this period, you have the option to renew it for another similar period, thus securing your long-term interest in the property.

How much does my bank trust cost?

The creation of the trust involves an initial payment that covers the preparation of the contract and the notary fees. In addition, there is an annual administration fee that is paid to the trustee bank.

• Opening the trust: The initial cost of establishing a trust in Baja California Sur can vary between $2,000 and $3,500 USD. This depends on the banking institution and the complexity of the property.
• Annual Maintenance: An annual fee ranging from $500 to $1,000 USD, depending on the bank and additional services included, such as administrative management of the trust.

Companies that manage trusts in Baja California Sur.

• BBVA Bancomer: Offers specialized services for real estate trusts in Mexico.
• Scotiabank: With experience in property management for foreigners, it is a reliable option.
• Santander Mexico: Known for providing comprehensive advice on trusts and transparent costs.
• Banorte: Offers competitive rates and an extensive support network in Baja California Sur​.

Buying a property on the Baja Californinia Sur Coast is an excellent opportunity, whether to enjoy it as a vacation home or as an investment. Understanding the escrow and the necessary legal process is essential to ensure a problem-free experience. With the right steps and the right advice, you can acquire your dream property in Mexico and enjoy the benefits of owning a property in a coastal paradise.