The Fideicomiso: How Foreigners Legally Own Property in Los Cabos

Can a foreigner legally buy property in Los Cabos?

Yes, and the ownership is real ownership. A foreign buyer acquires the property through a Mexican bank trust called a fideicomiso, and holds the right to occupy it, remodel it, rent it, sell it to whomever they choose, and leave it to their heirs.

The reason the trust exists is constitutional, not commercial. Article 27 of the Mexican Constitution bars foreigners from taking direct title to land within 50 kilometres of the coastline or 100 kilometres of an international border. That boundary dates to 1917 and was drawn to keep strategic land under Mexican control. All of Los Cabos — Cabo San Lucas, San José del Cabo, the Corridor, the Pacific side, the East Cape — falls inside it.

The Foreign Investment Law of 1993, passed alongside NAFTA, created the route around the restriction: a Mexican bank takes legal title as trustee, and the foreign buyer is named beneficiary and holds every economic and beneficial right in the property.

What does the bank actually control?

Very little, and that is the point most buyers get wrong. The property is not an asset on the bank’s balance sheet, it is not exposed to the bank’s creditors, and the bank cannot sell, encumber, or occupy it. The trustee acts on the beneficiary’s written instructions, within the terms of the trust and Mexican law.

What the bank does is administrative: it holds title, keeps the trust in good standing, and executes the beneficiary’s instructions when the property is sold, transferred, or passed to a successor.

The beneficiary is named in the trust deed, and so are the substitute beneficiaries — which is how a fideicomiso transfers on death without probate in Mexico. That is a genuine advantage over direct title, and it is worth naming your successors carefully at closing rather than fixing it later.

How long does a fideicomiso last?

The maximum initial term is 50 years, and an extension may be requested.

You will read everywhere that the trust “renews automatically” and is “effectively perpetual”. Be careful with that wording. The law does not guarantee automatic or indefinite renewal. Extension is applied for, and in practice it is granted routinely — but a routine administrative outcome is not the same thing as a legal entitlement, and a page that tells you otherwise is selling rather than informing.

What this means practically: diarise the expiry, and apply in good time rather than at the end.

When you buy a resale property from another foreign owner you have two paths: assume the existing trust for its remaining term, or have a new trust issued in your name. Which one is cheaper depends on how many years are left and what the incumbent bank charges. Ask for both numbers before closing — the difference is routinely a four-figure sum and it is rarely volunteered.

What does a fideicomiso cost in 2026?

Exactly one number here is fixed. Everything else is quoted, and pages that print a tidy total are guessing on your behalf.

Fixed by law. The federal permit from the Ministry of Foreign Affairs (SRE) to establish a restricted-zone trust is MXN 21,650 under article 25 of the 2026 Ley Federal de Derechos. It is set in pesos, so its dollar cost moves with the exchange rate — quote it in pesos and convert on the day.

Everything the bank charges is the bank’s own pricing. There is no legal tariff, no published schedule, and no national rate. Conflating the SRE duty with the bank’s fees is the single most common way buyers get surprised at closing.

What matters more than a number is knowing what the bank is allowed to bill you for, so you can ask for each line before you choose a trustee:

• Acceptance of the trust — a one-time charge for taking on the trustee role.
• The first annual fee, commonly prepaid at closing.
• Annual administration in every year that follows.
• Amendments to the trust deed.
• Substitution of beneficiaries — including adding or changing your heirs.
• Assignment of your beneficial rights, which is what happens when you sell.
• Cancellation of the trust.
• IVA at 16% where it applies.

Annual fees are commonly tiered by property value, so a higher-value home does not pay what a condo pays, and the fee schedules differ enough between banks to be worth comparing. Ask for the schedule in writing, itemised, and ask specifically what the assignment fee will be — that is the one you meet on the way out, when you have no leverage left.

These are the trust costs only. They sit on top of the acquisition tax, notary and registry costs that every buyer pays — see closing costs in Los Cabos, where the legally fixed items are separated from the quoted ones.

Is a Mexican corporation a better option?

Sometimes, and it is oversold. A Mexican corporation can hold restricted-zone real estate directly, which is why it is the standard vehicle for commercial property and for buyers assembling a genuine rental business across several units.

For a single home or condo bought to live in or to rent occasionally, the corporation usually costs more than it saves: it carries monthly accounting, annual filings, and tax obligations that continue whether or not the property produces income, and it forfeits the residential capital-gains treatment available to individuals. See capital gains tax when you sell.

The honest answer is that this is a question for a Mexican tax professional who has seen your numbers, not a question a real estate agent should answer for you.

What to verify before you sign

• Certificate of no liens (certificado de libertad de gravamen) issued by the Public Registry, current as of closing — not one pulled months earlier.
• Who the trustee bank will be, its setup fee, its annual fee, and how that annual fee escalates.
• The named beneficiaries and substitute beneficiaries, spelled exactly as in the passports.
• Property tax (predial) paid current, and any HOA balance — unpaid dues follow the property, not the seller. See HOA fees.
• Boundaries and construction permits matching what you were shown, particularly on lots and on recently built homes.
• Whether the existing trust is assumable, and what each path costs.

All of this runs through a notario público, who in Mexico is a state-appointed attorney with far more authority than a US notary. How that works, and how your money is protected in the meantime, is covered in escrow, title and the role of the notary.