What is the restricted zone
The Mexican Constitution, in Article 27, prohibits foreigners from directly owning real estate in two areas:
- Within 100 km of any international border (US border, Guatemala border, Belize border)
- Within 50 km of any coastline (Pacific, Atlantic, Gulf of Mexico, Caribbean)
This is called the zona restringida (restricted zone). The restriction was enacted in 1917 to protect Mexican sovereignty over coastal and border lands.
What it means in practice
Most of the high-demand foreign buyer destinations are in the restricted zone:
- Tulum, Playa del Carmen, Cancun (Caribbean coast)
- Cabo San Lucas, La Paz, Todos Santos (Baja California Sur)
- Puerto Vallarta, Sayulita, Punta Mita (Pacific coast)
- Mazatlan, Acapulco, Ixtapa-Zihuatanejo (Pacific)
- Mérida and most of Yucatan coast (Gulf)
- San Miguel de Allende — NOT in restricted zone (inland)
- Mexico City — NOT in restricted zone (inland)
- Guadalajara — NOT in restricted zone (inland)
How foreigners can still buy in the restricted zone
Through a fideicomiso (Mexican bank trust):
- A Mexican bank (Banamex, BBVA, HSBC, Santander, Scotiabank — all qualify) holds legal title to the property as fiduciary
- The foreign buyer is the beneficiary with full rights to use, rent, sell, or transfer the property
- The bank issues a 50-year trust, renewable for another 50 years
- Property descends normally to your heirs (Mexican or foreign)
The fideicomiso gives the foreign owner all the practical rights of ownership: you can live in the property, rent it out for income, sell it whenever you want, and pass it to your children. Legally, the bank holds title; practically, you control everything.
Costs of the fideicomiso
| Cost | Amount (2026) | Frequency |
|---|---|---|
| Setup fee (bank) | $1,500 – $3,000 USD | One time |
| Annual maintenance | $500 – $800 USD | Yearly |
| SRE permit (Foreign Affairs) | $400 – $800 USD | One time |
| Notario fees | 1.5%-3.0% of property value | One time |
| ISAI (real estate acquisition tax) | 2-5% depending on state | One time at purchase |
Process timeline
Buying via fideicomiso typically takes 60-120 days from offer acceptance to keys:
- Purchase agreement signed (week 1)
- SRE permit application (weeks 1-2)
- SRE permit issued (weeks 4-8)
- Bank fideicomiso documents prepared (weeks 6-10)
- Closing with bank-approved notario (weeks 10-14)
- RPP registration of the trust deed (weeks 14-20)
Alternative: Mexican corporation (rarely worth it)
Some foreigners hold restricted-zone property through a Mexican corporation (SA de CV) that they own 100%. This avoids the fideicomiso but adds: corporate maintenance ($1,500-$3,000 USD/year), bookkeeping requirements, monthly tax filings even with zero activity, and capital gains complications when selling. For most individual foreign buyers, the fideicomiso is simpler and cheaper.
What's NOT in the restricted zone
Major destinations where foreigners can hold property directly in their own name (no fideicomiso needed):
- Mexico City and all of CDMX
- Guadalajara (Jalisco metro area, but NOT Puerto Vallarta — that's coastal)
- San Miguel de Allende (Guanajuato)
- Querétaro (city and most of state)
- Most of the central highlands (Aguascalientes, Zacatecas, San Luis Potosí)
If you're buying inland, no fideicomiso, no bank, no SRE permit — just standard direct ownership.
Related terms
- Fideicomiso — the bank trust used to hold property in the restricted zone
- PROFECO — Mexican consumer protection agency that regulates self-financing
- No-credit-check financing — how foreigners can finance Mexican property without Mexican credit history