The Mexican Constitution prohibits direct property ownership by foreigners within 50 km of the coast and 100 km of borders — known as the restricted zone. Los Cabos, as a coastal destination, falls squarely within this zone. However, since 1973, the Mexican government enabled an elegant, fully legal mechanism to resolve this limitation: the bank trust, or fideicomiso.
A fideicomiso is a real estate trust administered by an authorized Mexican bank (such as BBVA, Scotiabank, or Banamex) on behalf of the foreign buyer. The bank acts as trustee — the legal titleholder of the property — while the buyer is the beneficiary, with all rights to use, rent, sell, improve, and inherit the property. In practice, you own the property in every sense that matters.
The process begins with obtaining a permit from the Secretaría de Relaciones Exteriores (SRE), a procedure that typically takes 2 to 4 weeks and costs approximately USD 1,000. The selected bank then establishes the trust in parallel with the notarial closing, a process that takes 30 to 60 days from the signing of the purchase agreement.
The annual maintenance cost of the fideicomiso — the fee the bank charges for administering the trust — ranges from USD 500 to USD 1,000 annually, depending on the bank and property value. This is the only recurring cost of the mechanism and is fully deductible if the property generates rental income.
The fideicomiso has an initial term of 50 years, renewable indefinitely before expiration. It does not automatically expire or revert to the government — it is simply renewed, generally for a modest fee. This unlimited renewability makes it an instrument of perpetual tenure in all practical effects.
A few myths worth dispelling: the bank cannot sell your property, use it, or make any decisions about it without your instruction. You can sell, rent, or inherit the property with complete freedom. The fideicomiso does not affect your ability to obtain financing — Mexican banks and several international lenders offer mortgages on trust-held properties. And finally, you do not need to be a resident or hold a resident visa to buy.
At Montealegre Luxury Homes, we work with the finest notaries and real estate attorneys in Los Cabos to ensure every transaction is flawless from day one.
Frequently Asked Questions
Is it legal for a foreigner to buy oceanfront property in Mexico?
Yes, it is completely legal. Because the coast falls within the restricted zone (50 km from the sea), the purchase is made through a bank trust — a fideicomiso: the bank holds legal title and you, the beneficiary, hold all rights to use, rent, sell, and inherit.
How long does a fideicomiso last, and what happens when it expires?
It lasts 50 years and is renewable indefinitely, with no cap on renewals. It does not expire automatically or revert to the government: renewal is an administrative process before the SRE.
How much does it cost to maintain a fideicomiso per year?
The annual fee charged by the trustee bank ranges from USD 500 to USD 1,000, depending on the bank and property value. It is the mechanism's only recurring cost.
Sources
Keep reading
Montealegre Luxury Homes
Are you considering a property in Los Cabos?
Speak with an advisor privately, with no obligation.
Contact an advisorGet the next article in your inbox