Americans cannot directly own land within 50km of the coast or 100km of borders. The fideicomiso (bank trust) is the legal solution — but it comes with annual costs, bank selection matters, and there are tax implications on both sides of the border.
Yes, but with restrictions. Mexico's constitution prohibits foreigners from directly owning land in the "restricted zone" — within 50km of any coastline or 100km of any international border. This covers most beach and border towns popular with Americans: Puerto Vallarta, Cancún, Los Cabos, Playa del Carmen, and all of Baja California. In the interior (CDMX, San Miguel de Allende, Oaxaca city, Guanajuato), Americans can own property directly with no trust required.
A fideicomiso is a bank trust where a Mexican bank holds the legal title to the property on your behalf. You retain all rights: you can live in it, rent it, renovate it, sell it, and pass it to heirs. The bank is the legal owner on paper; you are the beneficial owner with full control. Fideicomisos are granted for 50-year renewable terms.
Setup fee: $1,000-2,000 (one-time). Annual maintenance fee: $500-800/year, paid to the bank. These fees vary by bank — the guide compares fideicomiso costs across major Mexican banks (BBVA, Banorte, Scotiabank, Monex) and identifies which offer the best terms.
Owning property in Mexico creates several US reporting requirements. Rental income is taxable by both countries. Capital gains on sale are reported on your US return (with potential Foreign Tax Credit for Mexican capital gains tax paid). The fideicomiso itself may need to be reported on FBAR and Form 3520 (foreign trust reporting) — though the IRS has issued guidance suggesting fideicomisos may not be "trusts" for this purpose. The guide covers the current state of this gray area. FBAR & FATCA details →
Some advisors suggest buying coastal property through a Mexican corporation (Sociedad Anónima) instead of a fideicomiso. This can work but creates additional complexity: the corporation must file Mexican taxes, you have PFIC and CFC (Controlled Foreign Corporation) reporting on your US return, and corporate structures can be more expensive to maintain. The guide covers when a corporation makes sense vs. a fideicomiso.
Mexican property closing costs run 5-8% of the purchase price: acquisition tax (ISR/ISAI, 2-4%), notary fees (1-2%), fideicomiso setup (if applicable), and appraisal fees. The process from offer to closing typically takes 45-90 days. The guide includes a step-by-step timeline and checklist for buying property in Mexico.
Mexican banks offer mortgages to foreigners, but terms are less favorable than US mortgages: interest rates of 8-12%, shorter terms (15-20 years), and 20-30% down payment requirements. Cross-border lenders like Global Mortgage and MoXi specialize in loans for Americans buying in Mexico. The guide compares financing options and when it makes sense to finance locally vs. using US-based equity. Banking in Mexico →
Educational content only — not tax or legal advice. This guide is an orientation document. Tax law is complex and individual situations vary. Always consult a qualified US expat CPA and a licensed local attorney before making financial, visa, or property decisions. Figures are verified as of the date shown and subject to change. Full disclaimer →