Buyer’s Q&A
US buyer buying a Mexican fractional share: how the fideicomiso works
Mexican coastal real estate near borders is held through a fideicomiso (bank trust) for foreign owners. With fractional ownership, you own a real share of the home; the legal set-up is arranged by our partner and explained before you buy.
The short answer: Mexican coastal real estate within ~50km of the coast or border zones must be held by foreign owners through a fideicomiso — a 50-year renewable bank trust where a Mexican bank legally holds the title for the foreign beneficiary. In fractional ownership, you own a real share of the home, and how the fideicomiso fits with your share is part of the legal set-up our partner arranges for each home and explains before you buy. This is well established in popular Mexican fractional markets like Cabo San Lucas and Riviera Maya.
This page describes the structural picture, not personal advice; a US–Mexico cross-border specialist (typically a CPA plus a Mexican notario) confirms your own position.
What a fideicomiso is
Under Mexican law, foreign individuals cannot directly own real estate within the "restricted zone" — defined as land within 100km of any border and 50km of any coastline. This covers most popular Mexican vacation-home destinations including Cabo San Lucas, the Riviera Maya, Puerto Vallarta and most of Baja.
The established route for foreign buyers: a fideicomiso — a trust contract where a Mexican bank holds legal title to the property as fiduciary, and the foreign buyer is the trust's beneficiary with all practical ownership rights (use, sale, inheritance). Fideicomisos run for 50-year terms, automatically renewable.
How the fideicomiso fits with fractional ownership
With a fractional share, you own a real share of the home — an eighth, a quarter — not a right to use it. You can sell it, pass it on to your heirs, and it moves with the value of the home.
For comparison, a US buyer holding a personal fideicomiso of a whole Mexican property pays direct annual fees to the Mexican bank (typically $500–$1,500 USD per year) and their own US reporting obligations. In a fractional home, the fideicomiso fees are shared between the co-owners through the annual fee. Your US reporting follows from the home's legal set-up.
Where Mexican fractional inventory is strongest
| Destination | Profile | Typical 1/8 share price |
|---|---|---|
| Cabo San Lucas (Baja California Sur) | Largest US-buyer Mexican fractional market; deep inventory | $500k–$900k |
| San José del Cabo | Quieter sibling of Cabo; lower density | $450k–$750k |
| Riviera Maya (Tulum, Playa del Carmen) | Caribbean coast; growing fractional inventory; lower entry | $300k–$600k |
| Puerto Vallarta | Pacific coast; established US-buyer demand | $350k–$650k |
Three Mexico-specific points to confirm
First, the fideicomiso is held by a major Mexican bank with an established track record. Second, the annual fideicomiso fees are itemised in the annual fee. Third, the renewal mechanics — when the fideicomiso renews for its next 50-year term, who handles the paperwork and who pays.
Tax position
Mexican capital gains tax and ISR (income tax on rentals) can apply. US side: the relevant IRS reporting forms, US capital gains on disposal, US foreign tax credit for Mexican tax paid. The US–Mexico double-taxation treaty governs the interaction. Estate considerations: US worldwide-estate inclusion and Mexican inheritance handling.
Where to find Mexican fractional listings
Co-Ownership Property's Mexico selection includes fractional listings in Cabo San Lucas and other Mexican destinations.
Further reading
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