Legal Steps to Safely Buy Property in Mexico as an American (San Felipe Edition)

If you’re an American thinking about buying a lot or home in San Felipe, you’re not just choosing a view—you’re making a legal decision in another country.

You’ve probably heard mixed messages:

“Foreigners can’t own land near the beach.”
“You just put it in a Mexican friend’s name.”
“The fideicomiso is risky.”

Most of this is outdated or simply wrong.

The good news: you can safely buy property in Mexico as an American, including in San Felipe, if you follow the right legal steps to buy property in mexico and work with the right professionals.

This guide breaks down the process in clear, practical language—so you know what to expect before you sign or wire money.

1. Understand the “Restricted Zone” and What It Means

Understanding the legal steps to buy property in mexico is crucial for making informed decisions.

Mexico’s Constitution protects certain areas—called the “restricted zone”—from direct foreign ownership:

• 50 km (about 31 miles) from the coastline
• 100 km (about 62 miles) from international borders

San Felipe, sitting on the Sea of Cortez and relatively close to the U.S. border, lies inside this restricted zone. That means as a foreigner, you can’t hold simple direct title in your name the way you would in the U.S.

But that doesn’t mean “no ownership.” It means you must use a legal structure designed for foreigners:

• Fideicomiso (Bank Trust) for residential property
• Or, in some cases, a Mexican corporation for certain commercial activities

For most Americans buying a lot or future retirement home in San Felipe, the fideicomiso is the standard and safest path.

2. Learn How the Fideicomiso (Bank Trust) Works

A fideicomiso is a trust agreement where:

• A Mexican bank (the trustee) holds legal title to the property.
• You, the beneficiary, hold all rights to use, enjoy, improve, rent, mortgage, sell, or will the property.
• The trust is usually valid for 50 years and can be renewed.

Think of it as owning the beneficial rights to the property, with the bank acting like a neutral “title-holding company” under Mexican law.

Key points:

• You can designate heirs/beneficiaries, so the property passes smoothly if something happens to you.
• You can sell your property—either by assigning the beneficial interest or transferring the trust to a new buyer.
• The bank cannot decide to “take your property”; its role is structural and regulated.

This structure has been used by Americans buying in places like Cancun, Los Cabos, Puerto Vallarta, Rosarito, and San Felipe for decades. The risk usually comes not from the fideicomiso itself, but from skipping due diligence or working with the wrong people.

3. Verify the Property Type: Private Land vs. Ejido

Before you fall in love with a view, you must confirm what kind of land you’re actually looking at.

In very simple terms, there are two big categories:

1. Private property (propiedad privada)
   • Can be legally bought and sold.
   • Can be placed into a fideicomiso for foreigners.
2. Ejido land
   • Communal agrarian land, historically used for farming communities.
   • Cannot be directly sold to foreigners unless it has gone through a formal, complete process of privatization and titling.

This is one of the biggest legal traps for foreigners in Mexico:

• If land is still ejido, it’s not ready for a secure fideicomiso purchase.
• You should never “buy” ejido land through side agreements, handshake deals, or putting a property in someone else’s name while “waiting for papers.”

So one of your first legal steps is to have a Mexican attorney and the Notario Público verify the property’s history and confirm it is truly private property with a clear chain of title.

4. Choose the Right Team: Developer/Agent, Independent Attorney, and Notary

Buying in another country is not a solo project. The people you choose around you are a big part of your legal protection.

a) Reputable developer or real estate broker

• Look for a clear track record in San Felipe.
• Ask for evidence of prior projects, current permits, and property documentation.
• Talk to existing owners where possible.

A good developer will be transparent and patient, not pushy.

b) Independent Mexican real estate attorney

Do not rely solely on the seller’s or developer’s lawyer. Hire your own attorney who:

• Reviews all contracts in Spanish and English.
• Confirms land status (private vs. ejido).
• Checks for liens, encumbrances, or disputes.
• Coordinates with the bank and notary on the fideicomiso.

Their job is to protect you—not to close the deal at any cost.

c) Notario Público (Notary)

In Mexico, a Notario Público is a specialized, state-appointed attorney who:

• Confirms and certifies legal ownership.
• Makes sure taxes and legal requirements are met.
• Drafts and records the deed or trust in the Public Registry.

No serious real estate transaction should bypass the Notario. If someone suggests you “don’t need a notary for this part,” that’s your cue to slow down and ask more questions.

5. Due Diligence: Documents You Want to See

Once you’ve identified the property and agreed on a price in principle, your attorney and notary will run checks and assemble documentation.

Typical items include:

• Title documents / deed (escritura) of the current owner
• Certificate of no liens (libertad de gravamen)
• Property tax receipts, proving payments are up to date
• Land use/zoning information (uso de suelo)
• Subdivision and development approvals, if it’s part of a larger project or gated community
• Any condominium or HOA regimes and bylaws

The goal: confirm that the seller really owns what they say they own, that they’re legally allowed to sell it, and that there are no surprises attached to the land.

This is where you must resist the urge to “rush” because of a discount or limited-time offer. No deal is a good deal if the foundation is shaky.

6. Request the Foreign Investment Permit (SRE Authorization)

Because you’re a foreigner buying in the restricted zone, the Mexican government wants a formal record of your purchase through a permit from the Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores, SRE).

Practically, here’s what happens:

• Your attorney or notary requests the permit on your behalf.
• The permit confirms the government authorizes you, as a foreigner, to acquire rights to the property through a fideicomiso.
• This becomes part of the trust documentation.

You don’t handle this alone; your professional team does. But it’s one of the official legal steps that must be completed before closing.

7. Set Up the Fideicomiso with a Mexican Bank

Next, the bank trust (fideicomiso) is drafted.

You will:

• Choose a bank (often one recommended by your attorney/notary with experience in these trusts).
• Provide personal information and identification (passport, etc.).
• Designate co-beneficiaries (spouse/partner) and substitution beneficiaries (heirs).

The bank will:

• Draft the trust agreement including the property description, your rights, and the duration of the trust.
• Charge an initial setup fee and an annual trust fee (usually a few hundred dollars per year).

You’ll review the trust terms with your attorney to make sure:

• Your rights and heirs are clearly documented.
• You understand your obligations (fees, taxes).

Only when the trust document looks right to you and your attorney should it move forward to be signed at closing.

8. Closing at the Notary: What Actually Happens

When all checks are done, and the trust and contracts are ready, you’ll go to the Notario Público’s office to close.

At closing:

1. The notary explains the trust deed and purchase agreement (often in Spanish, with summary or translation for you).
2. You sign the documents, along with the seller, the bank representative (or their delegate), and any co-buyers.
3. You pay:
   • Remaining balance of the purchase price
   • Closing costs: notary fees, registration fees, some taxes, and bank trust setup fees
4. The notary then registers the trust/deed with the Public Registry, making your ownership rights official under Mexican law.

After registration, you’ll receive copies and, in time, the fully recorded deed/trust documentation.

9. After Closing: Ongoing Legal Responsibilities

Once you legally own the property through your fideicomiso, you have a few ongoing legal responsibilities:

• Annual fideicomiso fee to the bank
• Property taxes (usually modest but must be kept current)
• Any HOA/condo/community fees
• Compliance with local regulations if you build, rent, or modify the property

You should also discuss with your attorney and financial advisor how the property fits into your estate planning, especially if you have heirs in different countries.

10. Red Flags: When to Slow Down or Walk Away

Here are some signs you should either pause or walk away:

• Someone suggests you can skip the notary to save money.
• You’re told the property is ejido but “will be titled soon, don’t worry.”
• The developer or seller pushes you to send large deposits before your attorney or notary has checked documentation.
• Contracts are only in Spanish and you’re not given a clear explanation in English.
• There’s resistance to you hiring your own independent attorney.

In any of these cases, it’s better to lose an opportunity than lose your security. The Mexican legal framework is robust when followed properly—but it does require patience and disciplined steps.

Final Thoughts: Safe Purchase Is a Process, Not a Shortcut

Understanding the legal steps to buy property in Mexico isn’t about learning every statute. It’s about:

1. Using the fideicomiso correctly.
2. Ensuring the property is private, titled land.
3. Letting an independent attorney and a licensed notary do their jobs thoroughly.
4. Taking your time with due diligence and documentation.

If you do that, buying property in San Felipe can be not only safe, but one of the best decisions you make for your retirement or long-term lifestyle.