Yes, absolutely, a foreigner can own land or other real estate in Mexico. They can have title to their property and own it almost fee-simple. (“Fee-simple” means that you have title to your property, as opposed to leasehold or any other manner in which you can hold property.)
The easiest way to explain to somebody who is from the US or Mexico how a foreigner owns land in Mexico is through the concept of a trust that functions much like a family trust would in the US. In that trust you hold your asset, which is your property.
When you hold a trust in Mexico, you hire a bank to administer the trust for you. In order for the contract between the homeowner and the bank to be legally enforceable, it has to have an end date. As a result, here in Mexico, we sign contracts to have a bank administer our trust for us for up to 50 years, with an automatic extension for another 50 years. At any time the bank is administering your trust you don’t like your trust bank and you want to hire another trust bank, you simply cancel your contract with the bank you’re with and take it to another bank to hire them to administer your property.
Sometimes people think that because there’s a 50 year time commitment or a 50 year contract that you sign with your bank that it might relate somehow to a leasehold property that somebody might be familiar with in regard to buying property in Hawaii or in Palm Springs California, but that is not the case. You own the property outright, you have all the rights to the property, and that 50-year contract is just simply the amount of time on the contract for the trust bank to administer your trust for you. Functionally, there is no difference between holding a piece of property in Puerto Vallarta through a trust and holding a piece of property in Los Angeles as you would normally.
The cost to have a bank administer your trust runs between $400 and $550 annually at the present time, for the term of your trust.
Real estate trusts in Mexico have many great benefits for a family. Among the benefits, depending on how you set up a trust, is if you pass away and you leave a secondary beneficiary to your trust, there’s no inheritance tax. As a result, you wouldn’t have to pay any inheritance tax like you would in the US and as we know in the US those percentages are extremely high on the amount of tax that they collect on estate transfers. There is also the added benefit of leaving everything clean for your heirs. In case you pass away it’s a simple process of contacting the trust bank and letting them know that somebody has passed away and they make the secondary beneficiary the primary beneficiary of the trust.
(Casa Alegria, Riviera Nayarit, near Puerto Vallarta, Mexico, pictured.)