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New Developments |
Brand New
Pre-Construction Prices |
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Located in The Pedregel
Finest Location in CABO |
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Puerto Los Cabos' Foremost Private Residence Club
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Named one of the hundred hottest communities in the world according to Travel & Leisure
Magazine.
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Owning Property in Mexico |
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Yes…you can own property in Mexico. |
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There are exciting real estate and investment opportunities in Mexico, several here
in Los Cabos. Many people assume that they cannot buy real estate in Mexico.
Cabo Linda Real Estate Sales will guide you every step of the way, from finding
the right property to transferring the utilities. Our commitment to our clients
doesn’t end at closing.
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Owning Property in Mexico:
In Mexico there is what is known as the Restricted Zone. The Mexican
Constitution prohibits foreigners from direct acquisition of land and waterways
within a distance of
60 miles from any border and 30 miles from any coast. These
areas are referred to as "Restricted Zones". This means nearly the entire Baja California
Peninsula is in the Restricted Zone. Given that most foreigners desire property
in coastal areas, Mexico liberated ownership requirements of property in the Restricted
Zone and passed the Foreign Investment Law in 1993.
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Outside the Restricted Zone, foreigners can acquire direct ownership and buy any
kind of real estate they wish provided they abide by Mexican law and waive their
rights to any foreign government intervention in case of legal conflict.
The purpose of the Foreign Investment Law (FIL) is to promote Mexican and foreign
investments in Mexico. It was passed with the intention of encouraging development,
while maintaining Mexico’s economic independence.
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FIL and the Restricted Zone:
The FIL specifies that by establishing a bank trust, known as a fideicomiso; it
is possible for foreigners to obtain the ownership rights of residential, industrial
or tourism related real estate within the Restricted Zone. The rights of ownership
state that foreigners can use, improve,
rent or sell their property as though they
directly owned the property. The fideicomiso is a trust agreement, much like an
estate trust, giving you rights of ownership. The fideicomiso process begins when
a permit is issued by The Department of Foreign Affairs to the Mexican Bank of your choice, allowing the bank to act as purchaser of the property. The bank acts as the "Trustee" and you are the "Beneficiary". The bank does not have the right to
sell,
lease or use your property.
The initial term of the trust is 50 years, and
it can be renewed in 50 year increments,
indefinitely by simple application with
the bank. It was never the intent that these properties pass back to the government
at the end of the trust period. This is a common misconception and fear of most
buyers. In fact at the end of the 50-year period, the owner has an additional 10
years to renew the trust for another 50 years with the bank. If the property you
purchase is already held in a Trust, you have the option of assuming that Trust,
or having the property vested in a new Trust. The entire process can take anywhere
from 30-90 days. |
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With the new laws and the influx of professional real estate agents your transactions
are now safe and protected. Please do not purchase property without the assistance
of reputable professional real estate agents. If you are told by anyone that they
are unable to obtain Title Insurance, that is a red flag indicating a serious problem
such as Ejido (leased land) and you will be unable to obtain a bank trust and
Title Insurance from Stewart, Fidelity or First American Titles Insurance
Companies, who are all offering Title Insurance in Mexico now. Many people are lured
into "cheap beach front property"; remember anything that seems too good to be true
probably is.
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Taxation:
Property taxes are very low in Mexico. The property tax – known as predial is .1%
(1/10%) of the assessed value. Taxes are paid annually, with the assessed value
determined at the time of sale. If you purchase a property in the amount of $200,000.00
US dollars your annual tax rate would be $200.00US dollars. The reason taxes are
so low is because property taxes have never been a major source of revenue for the Mexican
government. |
The Notario:
The Notario is an appointed government official that
represents a high level of legal standing, similar to a judge in the United States.
Their services are required for the transfer of real estate property.
The Notario
is the attorney of record and the unbiased official representative of the government,
with fiduciary responsibility to all parties. He sanctions the contract from a tax
and legal point of view. Notarios must be attorneys, with
continued education
in real estate law. Once these requirements are met, they must then be appointed by the government. |
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