FOREIGN BUYERS IN BAJA CALIFORNIA MEXICO





How Foreign Buyers Can Purchase and Own Land for Personal Use and Real Estate Developments in Baja California, Mexico


Baja California, Mexico, has become an attractive destination for foreign investors looking to purchase land for personal use and real estate developments. Its stunning coastline, proximity to the U.S., and growing real estate market make it an ideal investment opportunity. However, Mexico has specific laws regarding foreign ownership of land, particularly in coastal and border areas. This guide explains how foreign buyers can legally acquire and develop land in Baja California.


Understanding the Restricted Zone

According to the Mexican Constitution, foreign individuals and companies cannot directly own land within 50 km (31 miles) of the coastline or 100 km (62 miles) from international borders. Since Baja California is a border state with an extensive coastline, much of its land falls within this "Restricted Zone." However, foreign buyers can still legally acquire property through two primary legal mechanisms:

  1. Fideicomiso (Bank Trust)
  2. Mexican Corporation

Acquiring Land Through a Fideicomiso (Bank Trust)

Foreign investors planning large-scale real estate developments or commercial ventures may prefer to establish a Mexican corporation, which can legally own land outright, even in the Restricted Zone.

  • The corporation must be legally registered in Mexico and have at least two shareholders.
  • The corporation can be 100% foreign-owned but must be used for commercial purposes (not solely for personal residence).
  • The corporation allows for greater flexibility in real estate development, including subdivisions, construction projects, and rental income operations.
  • Business entities must comply with Mexican corporate tax laws and regulations.

Steps to Purchasing Land in Baja California

  1. Conduct Due Diligence – Verify property ownership, title, zoning regulations, and any restrictions.
  2. Hire a Real Estate Attorney – A local lawyer familiar with Mexican real estate law can guide the transaction and prevent legal issues.
  3. Open a Fideicomiso or Establish a Corporation – Choose the right ownership structure based on the intended use of the property.
  4. Sign a Sales Agreement – Ensure the contract includes all terms, conditions, and price agreements.
  5. Obtain a Foreign Affairs Permit – Required by the Mexican Ministry of Foreign Affairs for foreign buyers.
  6. Finalize the Transaction with a Notary Public – In Mexico, a notario público is a government-appointed official who certifies real estate transactions.
  7. Register the Property – Ensure the property is recorded with the local Public Registry of Property.


Taxes and Fees Associated with Real Estate Purchases

Foreign buyers should be aware of the following costs:

  • Acquisition Tax (around 2%-4% of property value)
  • Notary Fees (varies by transaction value)
  • Bank Trust Fees (initial setup: $500-$1,500; annual fees: $500-$1,000)
  • Capital Gains Tax (if selling property in the future)
  • Property Taxes (low compared to U.S. and Canada)

Conclusion

Foreign buyers have multiple legal options for acquiring and developing land in Baja California, Mexico. Whether through a fideicomiso for personal use or a Mexican corporation for real estate development, the investment potential is vast. Proper due diligence, legal guidance, and compliance with local regulations are crucial to a successful and secure real estate transaction.

By understanding the legal framework, foreign investors can confidently purchase and develop land in Baja California, taking advantage of its growing real estate market and strategic location.


By


ALBERTO LLORENS

TERRAX

CEO

email:  Director@Terrax.mx


Calzada del Valle 151 pte

San Pedro Garza Garcia, NL

México 66220


www.Terrax.mx



Alberto LLorens

Architect and Civil Engineer 

Real Estate Developer

Massachusetts Institute of Technology 

Monterrey Tec 





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