Frequently Asked Questions

Click on the questions on the right to view the corresponding answer. Click "Back to Top" at any time to return to this index of frequently asked questions about buying beach lots.

Don't see your question here? Ask us.

Do the properties sold by Trans Caribbean have clear title?
Yes. All properties represented by Trans Caribbean Trust Company have been surveyed, legally registered and are guaranteed to have clear title.
Back to Top

Are the properties buildable?
Yes. TCT has done soil tests on all properties before they are listed and all lots are guaranteed to have soils suitable for building.
Back to Top

How are the properties zoned?
As in the United States, zoning in Mexico varies from one area to another. TCT has verified the zoning of all properties before they are listed so that you can be sure of the permitted use of each property prior to closing.
Back to Top

How can I as a foreigner own ocean front property in Mexico?
In 1917 Mexico drafted a new Constitution. In the Constitution, there was a provision that created the Restricted Zone. This Zone is 100 km (62 miles) from the borders and 50 km (or 31 miles) from the coasts. Originally only Mexicans could own land in the Restricted Zone because it was considered the most valuable real estate in the country.

In 1994 Mexico passed the new corporation law. This law provides that a Mexican corporation, wholly owned by foreigners, can be the Mexican entity required by the Constitution to own property in the Restricted Zone. Now, foreigners can own the Mexican corporation and hold all the papers to it. Your Mexican corporation holds the deed, which means, you get to personally possess the deed. You no longer need to go through the bank to get approvals to build, sell, or improve your property and there are no bank fees.

An added benefit to establishing the Mexican Corporation is that your corporation can own more than one property. You do not need to form a separate corporation for each property, as is the case with the Bank Trust system. Also, if you should decide to sell your property in the future, you can sell your entire corporation, all of your stock, sell part of it, some of your stock, or sell just the property out or it, and keep your corporation.

Also, after you buy land via the Corporation system, you are permitted to file a dormancy election, which means, your company is "asleep", until you decide to activate it. The government intentionally made it very easy for foreigners to own land in Mexico. So much so, that in 1998, the Mexican Government noticed that the revenues from the Industry of Foreign Investment & Tourism, surpassed the revenues from the Oil & Gas Industry. Foreign investment & tourism is now their main source of income and the Mexican government welcomes your participation.
Back to Top

What else does the Mexican Corporation get me?
As an added benefit of owning a Mexican corporation, you can get an FM-3, which is a working visa, permitting you to live and work in Mexico. The FM-3 can be renewed annually and with it you can obtain a Mexican drivers license, open bank accounts, get credit cards, earn an income, and operate a business. There are many benefits to having your own corporation.

When creating your corporation, you also have an option of creating a normal corporation or a limited liability corporation similar to an LLC in the U.S. You are only required to have a minimum of two stockholders in your corporation, but there is no limit to how many stockholders you may have.
Back to Top

As a foreigner, do I actually own my ocean front property?
Yes, but not in your personal name, you own it in the name of your Mexican Corporation. Keep in mind that you own 100% of the Mexican Corporation, so you do own the land. You do NOT need a Mexican national or Mexican citizen to be part of your Corporation. Your Mexican Corporation is recognized by the government to be a legal Mexican entity.
Back to Top

I have only myself and no friends. How do I form my Mexican Corporation if I need two stockholders?
We suggest that you might have your Mexican accountant, or your Mexican attorney hold 1% of the corporation's shares, with the agreement that he / she will not participate in any vote concerning your corporation or in any profit from your corporation.
Back to Top

Is the Mexican Corporation a 99-year lease?
No it is not. It is a legal corporation recognized by the state and federal governments. In the past, every 99 years the corporation's charter had to be renewed, but ever since Mexico implemented the computerized registration system, there is no need for renewal. Mexican Corporations now have an unlimited life span.
Back to Top

Can the Mexican Government take my property after I close?
No. Mexico is a land of laws and there are real estate laws, just as in the United States and in Canada, protecting the rights of property owners whether they are foreign or domestic. Mexico has had a stable democratic form of government for the past 90 years, and has no plans of changing.

And, since Mexico is part of NAFTA (North American Free Trade Agreement), there are multi-billion dollar foreign trade ties to the United States and Canada. Any dramatic change in the Mexican Government could jeopardize the economic dependency which Mexico has with these two countries. No benefit would accrue to Mexico in taking away property from foreigners who are Mexico's main source of revenue each year.
Back to Top

When are real estate tax notices sent out?
Tax notices are not sent out in Mexico. At your request Mexican attorney can arrange to pick up your tax notice each year pay the tax for you and advise you the amount to remind and take care of the payment on your behalf.
Back to Top

How much are annual real estate taxes?
Annual real estate taxes in Mexico's Yucatan Peninsula are really quite remarkable. For an average ocean front lot the real estate taxes will be less than $200 USD per year, and depending on location, may be less than $50 USD per year.
Back to Top

How do I know the land I am buying is really the land I saw?
This is very simple. You can compare the survey of the land to the legal description on the closing documents. Your Mexican attorney will know if the legal descriptions compare and match up. You can also compare the property survey to the corner markers on the ground. This way, you can determine that the property and the survey are the same.

Additionally, your Mexican attorney will match the legal description on the survey to the deed, and to the legal description in the Notario's books, the legal description in the Land Registration Office, and that the properties tax ID number matches on all documents.
Back to Top

Will the sellers negotiate?
Some sellers will negotiate price and some sellers will not. The main reason that some will not negotiate is that feel that they have no reason to. When you choose not to pay their asking price that is your decision and yours alone. You have absolutely no obligation to pay it. However, with the entire infrastructure going into place at the governments expense, ocean front property values are rising. By choosing not to pay the sellers asking price, you are allowing the seller to continue receiving the benefit of the properties price appreciation.

The question you may want to ask yourself at this point is whether you want to be earning the appreciation, or do you want the seller to continue earning it. Sellers will normally wait and adjust their prices as more infrastructure goes in, and then they usually re-list at a higher price.
Back to Top

What is the price per square foot?
There is no price per square foot. That is NOT the way to value beachfront property. Beachfront property is valued according to the amount of beach frontage, the quality of the beach (rock or sand), the elevation above sea level, the quality of the trees and foliage, the shape of the lot, zoning, the nature of the neighborhood, the beaches susceptibility to erosion (avulsion) and flooding, stability of the sea floor, proximity to infrastructure, and last but not least the sellers motivation to sell.
Back to Top

Can squatters take my property?
Yes it is possible, but it is a long and difficult process for them. It is actually easier in most states in the U.S. for a squatter to take your property, than it is in Mexico. In Mexico, to be granted title to land you do not own, but are living on, or 'squatting on', the squatter must prove to the court that he has been residing on the property for 5 continuous years in an obvious manner. This means that the squatter must make it known to everyone that he resides there. He usually does this by building on the property, farming the property, fencing it, or baring others from entering the property. The squatter cannot simply hide out on the land for 5 years, and then petition the court for the title.

If a squatter is living on your land in this manner, most of the time the owner will know it, because the squatter has to make his presence known to the public. If you notice this adverse use of the owner does not property, the squatter may after 60 months of continuous use, petition the court to be granted ownership of the property.

The court will then require the squatter to also present the court with evidentiary documentation that ownership has been assumed by and / or conveyed by the property owner to the squatter. Such documentation for example, may include a promissory contract of sale between the property owner and the squatter and copies of paid tax receipts paid by the squatter. Failing to meet the above criteria, the squatter’s petition will fail.

If the squatter’s petition meets all of the above criteria, the court must then make every attempt to notify the owner of the squatter’s petition by certified mail and by placing a legal notice in the principle newspaper of the owner’s last known address. Upon receiving such notice, the owner may contact the court and advise them that he does not consent to having his deed transferred to the squatter.

If the owner does not respond to such notices, the court has the authority but not the obligation to transfer the land to the squatter. As you might imagine this type of thing does not happen very often, and has never happened to any of our clients.
Back to Top

What are Ejido Lands?
Ejido Lands are nothing more than a land use grant from the Mexican Government to a cooperative of Mexican families for the purpose of farming and living off of the land. The Mexican government still owns the land, but has granted the use of it to the families of the Ejido. After 30 or 40 years of use, the Ejido members may, if they all agree, petition the government for the actual deed to the property. This is usually difficult because they seldom all agree, and further, the gorvenment is not obligated to grant their request.

They must first prove to the government that they have all agreed on how the property is to be subdivided among the Ejido members. The problem is that Ejido members can and often have bargained away or assigned their rights to their proportionate use of the property to other Ejido members.

However, if they can agree they may begin the process of converting the Ejido land from government ownership to private ownership. The government just does not want to give land to people for free. Ejido members do not have to pay for the land, they just need to be able to prove that they can use the land, and live off of it as a farming community.

As a foreigner in Mexico, Ejido lands are not something you can or want to get involved with. Ejido members do not own any of the land. They simply have rights to use the land. As a foreigner in Mexico, you have NO RIGHTS to use Ejido lands, even if Ejido members say that you can.
Back to Top

What happened in Baja California?
In Baja California the property in question was owned by the Mexican Government, and was at the time in the Ejido system. The Ejido members decided that they would lease the land to a group of Americans who wanted to build vacation homes there. Upon discovering that there were foreigners on the Ejido lands the government noticed to the foreigners to cease and desist with their occupation. Instead of complying with these notices the squatters circled their wagons and continued to build homes thinking that they could call the government's bluff. Each year the government would again gave notice to the squatters to leave the property. They even asked the U.S. Consulate to serve notice the squatters that they were in violation of federal law. The squatters ignored these notices.

Finally, after 10 years, the government lost patience with the squatters and forcibly evicted them from the land they were occupying. The Ejido members petitioned the government on behalf of the squatters with the false hope that they could obtain titles for them. They could not. The government did not 'take' any land from the foreigners. The foreigners never owned it or legally leased it in the first place. The biggest mistake the foreigners made is that they were never represented by Mexican legal counsel. Their so called leases were illegal and unenforceable. Remember, Ejido land is a 'use' grant, not a land grant, and it is ONLY for Mexican nationals who are members of the Ejido system.
Back to Top

How are capital gains computed on the sale of real estate?
Capital gains are computed based on 'Stated Values' that are provided by the Notarios at the time of sale. The actual transaction price, therefore, is not a matter of record and is not recorded in the land registration office as it is in some other countries. In Mexico, the government does not depend on the revenues from real estate taxes nearly as much as in most other countries. The 'Stated Values' are usually very nominal. 'Stated Values' can vary widely depending upon location and may be anywhere from 4 % to 14 % of the actual transaction price. Remember that the actual transaction price is known only to the buyer and to the seller - it is not a matter of record, and has nothing to do with the stated values.

As an example, let us assume that we purchase property at an actual price of $100,000 USD and the ‘Stated Value’ provided by the Notario is $10,000 USD. Let us further assume that we sell the property the following year for $200,000 USD. and the ‘Stated Value provide by the Notario is $20,000 USD. The capital gain will be computed as the difference between the two ‘Stated Values’ ($20,000 - $10,000 = $10,000 capital gain). Assuming a tax rate of 27%, the tax on the capital gain will be $2,700 USD. Since the actual capital gain is $100,000 USD and the tax we pay is $2,700 USD, the effective tax rate on our actual gain is 2.7%. It seems indisputable that this tax system is user friendly.
Back to Top

Is there a conflict of interest for TCT to represent the seller and the buyer?
Not really. The sellers are familiar with Mexican procedures. If the sellers wish to hire an attorney they can. We do list the property for them and must respect their asking price for the property. However, they understand that we have an obligation to represent the people who buy the property. With this in mind we must advise them prior to listing their property, once the price is agreed upon, our interests lie with you, the buyer, and not the seller. This is why we want to have the best real estate lawyers represent you. And this is why our customer referral rate is 41% (including repeat purchases).
Back to Top

What do I do about water when I build my house?
The limestone substrata underlying the entire Yucatan Peninsula is honeycombed with a fresh water aquifer. This aquifer is running gradually toward the sea. Well water can easily be obtained at depths starting from 15 to 25 feet. Because the aquifer is not very deep, the water is not recommended for drinking purposes unless you have a water purification system installed in your home. Many people, when building, have a residential reverse osmosis system installed by their plumber. These systems are extremely popular and very affordable.
Back to Top

What is a cistern?
A cistern is an underground cement water tank that is used to store water from your well. Water from a cistern is pumped into a pressure tank, and then pumped throughout your house.
Back to Top

How much does it cost to build?
Our customers have found that the average cost of building in the Yucatan Peninsula is between $55 and $75 USD per square foot. At this price, you can expect to have the following amenities: Solid concrete construction footed into the bedrock, marble floors, 10 foot ceilings, marble kitchens and baths, and standard fixtures.

The reason that home construction is so inexpensive here compared to the U.S. is that labor cost, which is usually 50% of a homes price, is only 82 cents per hour here in the Yucatan Peninsula. Additionally, beautiful Mexican marble is available at only a fraction of the price of high priced flooring in the U.S. Also, with the mild climate and emphasis on outdoor living, expensive insulated windows and other insulation necessary in more northern climates is not required in the Yucatan Peninsula.
Back to Top

What is included in closing costs?
Closing costs include EVERYTHING needed to place you in legal ownership of your property. This includes the formation of the Mexican corporation, registration with the Ministry of Foreign Investment, transfer taxes, Notario fees, and legal fees for your attorney. Anything and everything is included. There are no closing costs with Trans Caribbean.
Back to Top

Who owns the property?
Generally speaking these properties have been owned by a variety of Mexican families some of whom have had them in their families for generations. This is the main reason they are often unwilling to move off of their asking prices. They have owned the land so long that it is now like new found money. If they have to wait another 6 months to get their price, they don't care. If you have owned it for 50 years, what's another 6 months?
Back to Top

How safe is it to live in Mexico?
Mexico is now considered by many of those living here as ³the land of the free². It is not the Tijuana depicted by Hollywood. There are no handguns in Mexico - they are illegal. If you are caught with a handgun or handgun ammunition, you will be placed in jail. They have zero tolerance for pistols. Rifles and shotguns for the purposes of hunting are legal, but must be registered.

Customers sometimes ask if there is a drug problem in Mexico. The answer is YES, there is a drug problem. The problem is that you usually cannot get them. They are all headed for Miami or for the U.S. border. They are worth multiples in the U.S. of what they are here. Plus, the general population here in Mexico cannot afford them. The drugs running through Mexico are doing just that, passing through on their way to the lucrative U.S. market.

With these two issues alone, yes, I feel safer in this part of Mexico than anywhere I have been to in the U.S. or Canada. When you get to know the people of this area, you will find, as others have, that they are for the most part loyal workers. There is not be a lot of money among the common working class, but there is a lot of pride.
Back to Top/p>

Who owns Trans Caribbean Trust Company?
Trans Caribbean Trust Company is a Mexican corporation with a variety of stockholders. We operate as close to an American brokerage firm as possible.
Back to Top

Can I have references?
Trans Caribbean is pleased to provide references to our clients. We pride ourselves on our references and hope that you will be one as well.
Back to Top

Do I have to come back to close on my property?
You do not need to return for the closing if you don't want to. In fact, if you would like to save the cost of the return visit, you may close in absentia. The closing is handled via FedEx by your attorney.

You may, just as in the U.S., authorize your attorney to execute the final documents for you to close in absentia. This is a common practice, and about 70% of our clients chose to close this way.
Back to Top

Do I have to build within a certain time period?
No. Unlike many places where you are required to build within a certain period of time, in Mexico, you may hold your land for generations if so desired.
Back to Top

What happens after I sign an offer to purchase?
The process is easy. After you choose your lot and sign a contract to purchase the property, you will need to send a deposit to hold the lot. If for any reason you are unable to close the purchase, your deposit is 100% refundable. Once your deposit is received, the property is taken off the market pending settlement and your attorney is notified that we have received your deposit in escrow.
Your offer and personal information is transmitted by TCT to your attorney who will then contact you to answer any questions you may have and confirm the arrangements for closing. If you do decide to close in absentia, your attorney will provide you with the necessary documents for your signature and return to his office. TCT will continue to coordinate with you and your attorney and to assist with any questions or information during and after the closing process.
Back to Top

What is the Federal Zone?
The Federal Zone extends 66 feet (20 meters) back from the high tide mark. The federal zone is exactly what it says it is. It is an area on the beach which is owned by the federal government. Since it is owned by the federal government, you may not build your house in the federal zone. On inland bodies of water such as lakes and rivers the federal zone extends 33 feet (10 meters) from the high water mark. The federal zone is uniform throughout all 32 states in Mexico.
Back to Top

Can the federal zone move?
Since the federal zone on the coast is always 66 feet (20 meters) wide, the federal zone is migratory. That is, if the property sustains erosion and is partly washed away over time, because the federal zone never changes and is always 66 feet, the federal zone will move back with the shoreline and the beach lot will shrink. Conversely, if the property sustains accretion and the shoreline moves out, the federal zone will also move out and the beach lot will grow in size. This is why it is extremely important when selecting beachfront property to work with a professional company who has evaluated the beach classification of the property being purchased.
Back to Top

What is a beach concession?
The beach concession is a permit which can be obtained by your attorney after closing. This permit enables a property owner who owns property adjacent to the federal zone to use the zone, for example, for the construction of a boat dock, a patio, deck, or gazebo. It does not permit the property owner to construct any part of his house in the federal zone. To keep the beach concession an annual fee must be paid each year.

Back to Top