Thinking about a home near the Sea of Cortez and hearing the word “fideicomiso” everywhere? You are not alone. If you are a non‑Mexican buyer looking in San José del Cabo, you will likely use this bank trust to hold title. In this guide, you will learn what a fideicomiso is, how it works, what it costs, and how to set it up with confidence.

Let’s dive in.

What a fideicomiso is

A fideicomiso is a Mexican bank trust that allows you, as a foreign buyer, to acquire residential property in the country’s restricted zone. The bank appears on title as trustee, and you are named as the beneficiary with all practical ownership rights. The trust agreement spells out your rights and any specific conditions.

In daily life, you treat the home as your own. You can live in it, lease it, remodel it, sell it, or place a mortgage on your beneficial interest, subject to the trust terms and Mexican law. A Mexican Notary Public prepares and certifies the public deed, and the trust is recorded in the Public Property Registry.

Why it exists in Los Cabos

Article 27 of the Mexican Constitution restricts direct foreign ownership of land within set distances from borders and coastlines. The restricted zone generally covers land within 100 kilometers of an international border and 50 kilometers of the coastline. Los Cabos sits within this coastal zone, which is why the fideicomiso exists.

Under Mexico’s Foreign Investment Law, a Mexican bank can hold legal title as trustee for your benefit. The Secretariat of Foreign Affairs authorizes acquisitions by non‑Mexicans, and banks typically handle the filings as part of the trust process.

What rights you have

As the beneficiary, you hold robust rights. You can use, possess, and enjoy the property. You can rent it, remodel it, and sell or transfer your beneficial interest. You can also grant a mortgage if the trust allows encumbrances.

You may name successor beneficiaries so your interest passes smoothly if you pass away. Estate planning still matters, especially for cross‑border heirs, so consider naming successors in the trust and coordinating with your will.

What the bank and notary do

The trustee bank holds legal title in its name, executes official actions that affect title, and keeps trust records current. The bank’s administrative role means your transactions, like a resale or mortgage, will run through the trustee.

A Notary Public in Mexico is a senior legal officer who certifies real estate transactions. The notary prepares the deed that transfers title to the trustee for your benefit, oversees taxes and fees at closing, and ensures registration with the Public Registry.

Typical terms and renewals

Most fideicomisos start with a 50‑year term. You can renew in successive 50‑year increments. The trustee usually handles the renewal with the foreign affairs authority once you request it and pay the fee.

It is important to renew before the end date to avoid complications. Ask your bank to calendar renewals and tell you what they need from you well in advance.

Setup steps and timeline in San José del Cabo

Here is a common workflow you can expect in Baja California Sur:

1. Choose the property and sign a purchase agreement. Your contract will usually include a contingency for the bank trust setup and clear title.

2. Select a trustee bank. You can choose from authorized Mexican banks. Developers sometimes recommend a specific bank. Your choice can affect fees and the wording of the trust.

3. Bank trust application and authorization. The bank drafts the fideicomiso and submits any needed filings to the foreign affairs authority. You provide a passport, basic personal information, the purchase contract, and property documents. A survey or appraisal may be required.

4. Notary preparation. A Mexican notary prepares the public deed that transfers title to the bank as trustee for you. The deed and trust are recorded with the Public Registry of Property.

5. Closing and registration. At closing, you pay the purchase price and closing costs, sign the trust documents, and the notary files everything. The bank issues evidence of your beneficiary rights.

The timeline from contract to completed registration typically runs about 4 to 12 weeks. Complexity, title cleanup, or processing delays can extend this.

Costs to expect in Baja California Sur

Your closing costs will include several components. Exact amounts vary by bank, notary, municipality, and property value, so request written estimates early.

• Bank trust setup fee. This one‑time fee ranges by bank and by transaction complexity.
• Notary fees and deed costs. These are often one of the larger line items and include registration expenses.
• Transfer or acquisition taxes and government fees. Baja California Sur has its own rates collected at closing.
• Title due diligence. Surveys, appraisals, and title searches are common in bank due diligence.
• Legal representation. Many buyers hire a Mexican attorney to review the trust and perform title checks.

In addition, you will pay an annual trustee maintenance fee to the bank. Industry sources place total buyer closing costs in Mexico, which include trust setup, notary, taxes, and registration, at approximately 4 to 7 percent of the purchase price. Your actual number could be lower or higher, so get precise quotes for San José del Cabo.

Selling or financing later

You can sell your beneficial interest. The trustee and notary will manage the formalities, and the buyer will step into a trust interest or create a new trust depending on the structure. Build trustee timelines into your sale planning since the bank must sign documents.

Financing is also possible. Many lenders will secure a mortgage against your trust rights. The trust must permit encumbrances, and the trustee will record the lien. If your trust needs updated wording to allow a mortgage, the bank can amend the agreement.

Successors and estate planning

Fideicomisos commonly let you name successor beneficiaries. This is a helpful estate tool because it signals who takes over without a separate court order in Mexico. If you do not name successors, Mexican succession rules will guide the transfer.

For cross‑border families, align your trust with your home‑country plan. Talk with a Mexican notary or attorney about naming successors, and coordinate with your domestic estate advisor.

Alternatives and when they fit

A fideicomiso is the most common route for individual foreign buyers who want a primary or vacation home near the coast. There are a few alternatives that fit certain goals.

• Mexican corporation. A corporation can hold title in the restricted zone. This is typically used for commercial operations, rental portfolios, or multi‑investor structures. Corporations add setup, accounting, and tax obligations.
• Long‑term lease or usufruct. Some deals use long leases or a right to use for life. These can avoid trustee fees, but they are usually less secure and can complicate a future sale or financing.
• Buy outside the restricted zone. If you prefer direct fee simple title, you can buy land located beyond the constitutional distance limits. That said, this usually means moving inland from the Los Cabos shoreline.

Practical tips for San José del Cabo buyers

Use this quick checklist to stay in control of the process:

• Get written fee schedules. Ask the bank for trust setup, annual, and renewal fees. Request notary and government fee estimates specific to Baja California Sur.
• Confirm trust permissions. Make sure the draft trust allows rentals, remodeling, and mortgages if those are important to you. Developer trusts sometimes include extra rules.
• Choose strong local professionals. Work with an experienced notary and consider a Mexican attorney for title due diligence and trust review.
• Gather key documents early. Passport, purchase contract, property records, and any seller title history will help the bank and notary move faster.
• Plan for taxes. Expect property taxes and potential capital gains on sale. A Mexican tax advisor can explain your obligations as a resident or nonresident.
• Set up successors. Name successor beneficiaries in the trust and align with your broader estate plan.

How this plays out in real life

If you are eyeing a Palmilla‑area villa or a surf‑friendly home base near San José del Cabo’s beaches, you will likely enter a standard sequence. You go under contract, the bank drafts your trust, the notary prepares the deed, and you close once the foreign affairs authorization and due diligence are complete. A clean file, responsive seller, and clear bank instructions often keep timelines in the 4 to 12 week range.

The key is clarity. Ask for every fee in writing, verify that the trust includes the uses you want, and keep renewal timing on your radar. With the right team, the fideicomiso is a smooth and well‑tested path to owning your place by the Sea of Cortez.

Looking for a local advisor who can walk you through each step, introduce trusted notaries and banks, and align your purchase with your lifestyle goals? Connect with Dawn Pier for concierge buyer representation across Los Cabos.

FAQs

What is a fideicomiso for San José del Cabo property?

• A fideicomiso is a Mexican bank trust where the bank holds legal title as trustee and you hold beneficial rights to use, lease, sell, and mortgage the property.

Why do foreigners need a fideicomiso in Los Cabos?

• Mexico’s Constitution restricts direct foreign ownership near coasts, so a bank trust structure allows non‑Mexicans to acquire property rights in the restricted zone.

How long does a fideicomiso last and can it renew?

• The standard term is 50 years and it can be renewed in additional 50‑year increments by requesting renewal through the trustee and paying the fee.

Can I finance a home held in a fideicomiso?

• Yes, lenders can secure a mortgage on your beneficial interest if the trust permits encumbrances, and the trustee records the lien.

What happens to the trust if I pass away?

• You can name successor beneficiaries in the trust so they step into your rights, and you should coordinate with broader estate planning for cross‑border heirs.

What are typical closing costs in Baja California Sur?

• Expect a mix of bank setup fees, notary and deed costs, transfer taxes, and registration, plus annual trustee fees, with total closing costs often around 4–7 percent.

How long does it take to set up a fideicomiso?

• From contract to registration, many closings complete in about 4 to 12 weeks, depending on bank and notary processing and the seller’s documentation.

Is a Mexican corporation better than a fideicomiso for a home?

• For a personal residence, a trust is usually simpler; corporations are more common for commercial activity or rental portfolios due to added compliance and tax obligations.