Home Expat Blogs What Is the Fideicomiso?

What Is the Fideicomiso?

Los Muertos beach in Puerto Vallarta, Mexico
Credit: John Youden

What is the fideicomiso? If you are going to purchase property in Mexico, you need to know the ins-and-outs of this important document.

Simply put, the fideicomiso is a long-term irrevocable bank trust. A Mexican fiduciary bank holds the title to the property and cedes the rights to own and occupy, remodel, sell, give away or leave to your heirs.

The fideicomiso is not a lease, but a renewable trust held currently for 50 years (and renewable) by the Mexican government. If you are buying property outside of the Restricted Zone – more on that later – you can hold title to the property.

Now, a little history on the origin of the fideicomiso. Legal ownership of real estate in Mexico for foreigners comes from the Foreign Investment Law that was approved by President Luis Echeverria in 1971. It became law in 1973.

This law exists because notaries and other businessmen in Mexico recognized the huge asset Mexico’s coastline represents. These leaders realized there was an opportunity to attract foreign investment. To have funds for economic development in the 70s was of paramount importance, and U.S. dollars were highly desired. How to make this asset available to foreigners and not violate the Mexican constitution was the dilemma. The key became the fideicomiso, or trust.

The 1917 Mexican Constitution banned foreign ownership of any land within the Restricted Zone, which is land located within 100 kilometers (62 miles) of any national border and within 50 kilometers (31 miles) of any ocean.

The Foreign Investment Law of 1973 allowed a different treatment of real estate within and outside the Restricted Zone. Foreigners can own land outside the RZ without the need of a trust. Chapala and Guadalajara are locations where a number of foreigners own with a simple escritura or deed. Land inside the RZ would be within a fideicomiso trust.

The investment trust program was very successful, and in 1989, the Mexican government signed into law the ability for foreigners to have successive extensions of the trust thorough a simple application process when time for expiration of the original trust period came due.

In 1994, the new Foreign Investment Law allowed a beneficiary to have a trust for 50 years, with the application for extension or renewal still intact.

The trust is privately held in a Mexican bank authorized to act as a trustee. The trusts are not assets on the books of the bank, nor are banks allowed to take any action without written instruction from the beneficiary of the trust. The bank holds title to the real estate in trust, and the foreigner is designated as the holder of the beneficial rights of the trust, which includes the right to sell, improve, and will to heirs, or exercise any legal right under law.

As beneficiary, the foreigner has the equitable interest in the property through whatever market variations may occur. In other words, any equity or the loss of equity accrues to the holder of the trust, not the bank.

When the actual sale takes place at the office of a notary, the foreign owner may assign his/her beneficial interest in the trust to the new buyer (for a Mexican National, he/she endorses the title in favor of the buyer). The new owner may wish to establish a new bank trust where he/she is named the primary beneficiary. In this case, he/she will issue instructions to the notary for this purpose.

Closing costs for the buyer are normally acquisition tax, city appraisal, foreign permits, bank trust set-up and first year administration fee, notary costs, title insurance or survey, if requested.

Closing costs for the seller include payment of capital gains tax, trust cancellation, if applicable, and real estate fees. Capital gains tax is computed using the declared value of the purchase price in the seller’s deed and the tax value, which form a basis to index appreciation or depreciation, and deduct allowable receipts to arrive at an amount of tax. Each individual case will be different and proper analysis by a qualified professional is necessary. This computation is usually done by the notary closing the sale.

This article is based upon legal opinions, current practices and my personal experiences in the Puerto Vallarta-Bahia de Banderas areas. I recommend that each potential buyer or seller of Mexican real estate conduct his/her own due diligence and review.


  1. I think the elephant in the room is, “How do I spend as little as possible on the Fideicomiso?”
    Its something I never hear discussed in any article on this subject which seems very odd.
    Also it seems to be more of a fixed cost instead of a percentage of the property. So hearing example of the cost of this legal instrument at different price points would be useful. Many fees are adjusted to the cost of what they are servicing. We need examples! Also is it the same general cost all over Mexico or are some areas cheaper?

    • Harriet’s reply: Let me say that a trust has nothing to do with the price of the property. It is a federal trust administered by banks as a courtesy to foreigners who want to live in the restricted zone.So the trust is a fixed rate for 50 years renewable.

      • Yeah, we pretty much know the basics. We come on sites like this to dig a little deeper which means save a little more. Nobody is really going over the numbers. Which is strange because its ALL about the numbers and minimizing them. And for people buying low priced property the Fideicomiso is a real deal killer. Basically it disqualifies coastal Mexico completely because it could hike up the closing costs by 30%. And yes, there are many comfortable houses for sale for that little. You won’t find them on English real estate sites of course. And most require some work but that’s not a problem because labor in Mexico is very inexpensive.

    • The following statements are from my Attorney/Broker. The Fideicomisois fee is $5000.00 to $6000.00

      As far as closing cost for you as a foreigner what you would be paying is:

      1) $800 dollars for administrative documents, survey, appraisal & Lien certificates
      2) $5,000 -$6,000 Fideicomiso & permit so you can own property in México
      3) $500-$600 public registry, to register property in your name and bank
      4) 2% acquisition tax based on sales price
      5) notary fee ? Would have to send info to notary for that fee, normally 2% of sales price.

      To close time wise would be around 4-6 months because of Covid.
      Hope this helps.

      • Aron, Harriet responded to your Comment: “I disagree with this info It is not correct
        Trusts are never that expensive and the state and city in Mexico reflects different pricing.”

        • Maybe it was the area he was in. Maybe a high demand area like Tulum or Playa Del Carmen. Most of them I hear about are about $3000 initially.

  2. I’m curious as to whether buying a vacation property in Mexico thru a Canadian or for that matter, a US makes sense. That way to transfer ownership you would just sell the company not the unit,???

    • Yes, but you still incur the cost of the transfer. I hear its about $1500. Better than the original of course. But the chance of getting a good deal from a foreigner compared to a Mexican….you be the judge. If you buy in a tourist zone, then your chances are much higher of course. Expats are more likely to sell on emotion, especially if one of a couple dies. Hey, a new business in tourist areas: Combination funeral home and real estate investment company! One stop shop!

  3. I’m curious what happens if you buy just the land. Then build later. Is that cheaper in terms of the Fideicomiso?

  4. We closed on our property May 5, 2021, we have not been available to find out what our fidiecomiso cost will be, how and when will we be billed. We vaguely remember being told it would be 2 to 3 years after closing for the first payment. Can anybody help us with this, we are so confused


Please enter your comment!
Please enter your name here