Bill would lift limits on foreigners owning property
Bill would lift limits on foreigners owning property
BY DAVID AGREN
The News
A new proposal in the Senate would lift rules that prohibit foreigners from buying property in the nation's coastal and border regions.
The bill, sponsored by Sen. Mario López Valdez of the Institutional Revolutionary Party, or PRI, aims to boost foreign investment by scrapping constitutional prohibitions against non-Mexicans owning property within 50 kilometers of a coastline and 100 kilometers of the border.
López Valdez's proposal would allow foreigners to own residential properties, but not commercial developments.
The proposal reflects both a changing attitude toward foreign investment in Mexico and the growing impact of non-Mexicans on the domestic economy. So-called "gringo colonies," populated largely by U.S. retirees, have sprung up in areas such as Puerto Vallarta, Jalisco, and San Miguel de Allende, Guanajuato.
But while expats have been free to purchase homes in inland cities such as San Miguel, they have had to work around the law in costal areas such as Puerto Vallarta by purchasing property through a bank trust.
Some realtors welcomed the bill, though they say the market has flourished in spite of the current rules.
"[Buying a coastal property] is a pretty straightforward deal," said Damyn Young, a sales associate with International Realty in Ajijic, Jalisco.
"The only hassle is that you pay the bank to get in, pay annually to maintain it and pay to get out of it" upon selling, he said.
López Valdez said that 69.8 percent of the 4.3 million vacation properties in Mexico are now owned by foreigners - with many held in trusts. The constitutional change would simply reflect current realities, he said.
José Alfonso Suárez del Real, a deputy from the Democratic Revolution Party, said he supports the idea of modifying the rules, but not while violence flares at the northern border.
"It's not the most secure place to invest," he said. "What we would be opening the door to is money-laundering, not real investors, from the United States."
The rules against foreign property ownership are spelled out in Article 27 of the Constitution, which was written in 1917 and stemmed from painful memories of 19th-century occupations by the U.S. and French armies.