Fideicomiso vs Fee Simple Ownership: Understanding Property Structures in Mexico
5 Minute Insights | Published October 24, 2025 | By Steve L.
At a Glance
What You'll Learn: The two legal structures foreign buyers use to own property in Mexico—fideicomiso (bank trust) and fee simple (direct ownership)—including when each applies, what they cost, and how both provide full ownership rights with different administrative requirements.
Best For: International buyers, first-time Mexico property investors, anyone evaluating property in the Bajío region or throughout Mexico
Read Time: 5 Minutes
One of the most common questions international buyers ask is: "Will I really own my property in Mexico, or does the bank own it?" This confusion stems from misunderstanding the two ownership structures available to foreign buyers—fideicomiso and fee simple ownership. While they sound dramatically different, both provide foreigners with complete ownership rights. The difference lies in location and administrative structure, not in your actual control over the property.
Understanding which ownership structure applies to your property isn't just legal knowledge—it's essential for confident purchasing, proper budgeting, and long-term planning. Whether you're buying in San Miguel de Allende, Querétaro, or anywhere in Mexico's Bajío region, knowing the distinction between these two structures eliminates uncertainty and helps you move forward with clarity.
What Is the Difference Between Fideicomiso and Fee Simple Ownership?
Foreign property buyers in Mexico use one of two legal ownership structures depending on the property's location. Fee simple ownership allows direct title holding, while a fideicomiso (bank trust) provides beneficial ownership through a Mexican bank trustee. Both structures grant foreigners the same ownership rights—the ability to use, modify, rent, sell, or pass property to heirs—but they differ in administrative requirements and geographical application.
The distinction isn't about trust versus ownership. It's about constitutional requirements that determine how you hold title based on where the property sits.
Understanding Fideicomiso (Bank Trust)
A fideicomiso is a 50-year renewable trust arrangement where a Mexican bank holds legal title to property on behalf of a foreign buyer. Despite the word "trust," you maintain complete beneficial ownership with all practical rights of a property owner.
Key characteristics of fideicomiso ownership:
- Required in restricted zones (within 50 km of coastlines or 100 km of international borders)
- Full ownership rights including use, rental income, sale, renovation, and inheritance
- 50-year term that's renewable indefinitely for additional 50-year periods
- Annual trustee fees typically ranging from $500-$700 USD paid to the Mexican bank
- Fideicomiso holder acts as beneficiary with complete control over property decisions
- Constitutional requirement under Article 27, not a limitation on your ownership
The bank's role is purely administrative. You make all decisions about the property—when to sell, who to sell to, what price to accept, and who inherits. The bank simply holds legal title and executes transactions according to your instructions.
Understanding Fee Simple Ownership
Fee simple ownership (sometimes called "direct ownership" or "fee simple title") means you hold title directly in your name through a Mexican property deed called an escritura, just as Mexican citizens do. There's no bank involvement, no trust structure, and no ongoing administrative fees beyond standard property taxes.
Key characteristics of fee simple ownership:
Available outside restricted zones (most of Mexico's interior, including the entire Bajío region)
Direct title registered in your name in the public property registry
No time limits or renewal requirements
No trustee fees—only annual property taxes (predial) apply
Simpler documentation with one less layer of legal structure
Same rights as Mexican property owners, with identical legal protections
For the vast majority of properties in cities like Querétaro, Guanajuato, San Miguel de Allende, and Dolores Hidalgo, fee simple ownership is the standard. These areas fall well outside restricted zones, allowing foreigners to hold direct title.
Many buyers believe a fideicomiso means "the bank owns your property." This is incorrect. You are the beneficial owner with complete control. The bank is simply a trustee whose role is limited to holding legal title and executing your instructions. You can sell, rent, renovate, or transfer the property at will—the bank has no decision-making authority over your property.
Which Ownership Structure Do You Need?
The ownership structure you'll use depends entirely on your property's geographic location relative to Mexico's restricted zones. Article 27 of the Mexican Constitution limits direct foreign ownership in areas deemed strategically sensitive—specifically within 100 kilometers of international borders or 50 kilometers of coastlines.
If your property is:
- Inside a restricted zone → You must use a fideicomiso (bank trust)
- Outside a restricted zone → You can hold fee simple ownership (direct title)
The entire Bajío region—including San Miguel de Allende, Querétaro, Guanajuato, León, Celaya, Dolores Hidalgo, and Atotonilco—sits well outside restricted zones. This means foreign buyers in the Bajío almost always purchase property through fee simple ownership, holding direct title without any bank trust arrangement.
However, if you're considering coastal property in areas like Puerto Vallarta, Playa del Carmen, or Cabo San Lucas, or land near the U.S. border, you'll need a fideicomiso. Understanding this distinction helps you budget appropriately and know what to expect during the purchase process.
Key Differences in Practice
While both structures provide complete ownership rights, the practical differences matter for budgeting, estate planning, and long-term property management.
Aspect | Fideicomiso | Fee Simple
|
|---|---|---|
Who Holds Title | Mexican bank (as trustee) | You (directly) |
Where It Applies | Restricted zones only | Outside restricted zones |
Ownership Duration | 50 years (renewable indefinitely) | Permanent |
Setup Costs | $2,000-$5,000 USD (trust creation) | Notary fees only (~$3,000-$5,000 USD) |
Annual Fees | $500-$700 USD (trustee fees) | None (only property taxes) |
Your Rights | Full ownership rights | Full ownership rights |
Can You Sell? | Yes, with your approval | Yes, directly |
Can You Inherit? | Yes, designated in trust | Yes, through will |
As the table shows, both structures protect your ownership equally. The primary differences are administrative—fideicomiso involves ongoing trustee fees and periodic renewal, while fee simple ownership has no such requirements.
Fideicomiso renewal is routine and straightforward. When your 50-year term approaches expiration (typically 45-48 years in), your trustee bank notifies you to renew for another 50 years. The process is simple, costs roughly the same as annual trustee fees, and happens automatically if you stay current on those fees. There's no risk of "losing" your property—the trust simply renews.
Costs and Ongoing Expenses
Understanding the financial implications of each structure helps you budget accurately for both acquisition and long-term ownership.
Fideicomiso Costs:
- Initial setup: $2,000-$5,000 USD (one-time)
- Annual trustee fees: $500-$700 USD (paid to bank)
- Renewal (every 50 years): ~$1,500-$3,000 USD
Fee Simple Costs:
- Initial setup: Notary fees (~$3,000-$5,000 USD, similar to fideicomiso)
- Annual costs: Only property taxes (predial), typically $200-$800 USD depending on property value
- No renewal fees ever
Over a 50-year ownership period, a fideicomiso costs roughly $25,000-$35,000 more than fee simple due to annual trustee fees. For most Bajío buyers, this cost doesn't apply—you'll hold fee simple title and pay only annual property taxes like any Mexican homeowner.
Property Ownership in the Bajío Region
For buyers focused on Mexico's Bajío region, the ownership question is straightforward: nearly all properties in this area qualify for fee simple ownership. Cities like San Miguel de Allende, Querétaro, Guanajuato, León, and Dolores Hidalgo sit hundreds of kilometers from both coastlines and international borders, placing them firmly outside restricted zones.
This means when you purchase property in the Bajío, you hold direct title—your name appears on the escritura (property deed) just as it would for a Mexican citizen. There's no bank trust to establish, no trustee fees to pay, and no 50-year renewal to consider. Your ownership is direct, permanent, and straightforward.
The practical advantage for Bajío buyers is simplicity. Your closing process involves standard notary procedures, title verification, and property registration—the same process Mexican nationals follow. You avoid the additional layer of trust creation, ongoing trustee fees, and renewal procedures that coastal buyers manage.
This doesn't mean one structure is "better" than the other—both provide equal ownership rights. But if administrative simplicity and lower ongoing costs appeal to you, the Bajío's geographic position offers that benefit automatically.
Regardless of whether you're purchasing through fideicomiso or fee simple ownership, always verify that your notario público confirms the ownership structure is correctly established in your escritura. This one-time verification at closing ensures your ownership is properly registered and legally protected from the start.
Common Questions About Mexican Property Ownership
No. A fideicomiso provides you with complete beneficial ownership—the same rights as direct ownership. You control all decisions about the property: when and to whom you sell, rental arrangements, renovations, and inheritance designation. The bank holds legal title only as an administrative requirement and must execute your instructions. Mexican law protects your beneficial ownership rights fully.
Generally, no. Once you purchase property in a restricted zone requiring fideicomiso, that constitutional requirement remains regardless of how long you own the property. The location determines the structure. However, if you purchase property outside restricted zones (like in the Bajío), you establish fee simple ownership from the beginning.
Fideicomisos don't "expire" if you maintain them properly. Approximately 45-48 years into your 50-year term, your trustee bank notifies you to renew for another 50 years. The renewal process is routine, costs roughly the same as 2-3 years of annual fees, and preserves your ownership seamlessly. As long as you stay current on trustee fees, renewal happens automatically.
Understanding Your Ownership Structure Builds Confidence
The distinction between fideicomiso and fee simple ownership matters for proper budgeting, legal compliance, and peace of mind—but it doesn't change the fundamental truth that both structures provide foreign buyers with complete, protected ownership rights in Mexico. Location determines which structure applies, and both have successfully protected millions of international property owners for decades.
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For buyers focused on Mexico's Bajío region, fee simple ownership offers the advantage of administrative simplicity: direct title, no trust arrangement, no trustee fees, and permanent ownership from day one. This is one of many reasons the Bajío continues attracting international buyers seeking straightforward, transparent property transactions.
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