What Is the Fideicomiso and What Protection Does It Offer?
Karla and Erick Cabo Realty
Last update: 2026-10-08
Karla and Erick Cabo Realty
Last update: 2026-10-08
A fideicomiso is a Mexican bank trust, and it is how Americans legally buy homes in Los Cabos. Mexico's Constitution does not allow foreigners to hold direct title within 50 km of the coast, so a Mexican bank holds title for you while you keep every practical right: live in it, rent it, remodel it, sell it and leave it to your heirs.
We guide buyers from California, Texas and Arizona through the fideicomiso on every purchase in Los Cabos. Here is how it works, with the official costs and the rules that matter to a U.S. buyer.
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| 50 km from the coast and 100 km from borders: the restricted zone |
50 years trust term, renewable for 50 more |
$21,650 MXN: official SRE permit fee in 2026 |
| ~$500–700 USD: typical annual bank trustee fee |
3 parties: you, the Mexican bank and the SRE |
2013-14 IRS ruling on how the U.S. treats a fideicomiso |
Mexico's Constitution (article 27) creates a restricted zone: a strip of 100 km along the borders and 50 km along the coast. Inside it, foreigners cannot hold direct title to land. All of Los Cabos is inside this zone.
Instead of blocking foreign buyers, Mexico's Foreign Investment Law lets them use and enjoy residential property through a bank trust, with a permit from the Ministry of Foreign Affairs (SRE). It is not a loophole. It is the legal path the law created for you.
| Party | Role |
| You (beneficiary) | Pay for the property and hold all the rights to use, rent, improve, sell and pass it on |
| Mexican bank (trustee) | Holds title and follows your instructions. It cannot sell or use your property on its own |
| SRE | Issues the permit that allows the trust in the restricted zone |
You can also name substitute beneficiaries in the trust. If you pass away, the bank transfers your rights to them, which is usually simpler than a probate process.
| Cost | Amount | When |
| SRE permit | $21,650 MXN (2026 official fee) | Once, at purchase |
| Bank setup fee | Set by each bank | Once, at purchase |
| Annual trustee fee | Typically ~$500–700 USD | Every year |
| Renewal permit | $595 + $9,740 MXN on time ($10,615 if late) | When the term is extended |
SRE fees are official for 2026. Bank fees are not published by the government and change by bank: confirm them before you choose a trustee. Total buyer closing costs are covered in Understanding Closing Costs When Buying in Mexico.
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Many U.S. buyers worry that a Mexican "trust" triggers foreign-trust reporting. In Revenue Ruling 2013-14, the IRS concluded that a typical Mexican fideicomiso used to hold residential property is not treated as a trust for U.S. federal tax purposes. That generally avoids trust forms like 3520, as long as the bank's role is limited to holding title. Ask your U.S. tax advisor to confirm it for your trust.
See how the trust fits the whole purchase in our Step-by-Step Guide to Buying Property in Los Cabos, and the other limits in What Restrictions Do Americans Face When Buying Land in Mexico.
The bank holds title as trustee, but it must follow your instructions. You keep the rights to use, rent, improve, sell and pass on the property.
Up to 50 years, and it can be renewed for another 50 years.
The official SRE permit is $21,650 MXN in 2026, plus the bank's setup fee and a typical annual trustee fee of about $500–700 USD.
Yes for residential property bought by a foreigner, because all of Los Cabos is within 50 km of the coast.
Under Revenue Ruling 2013-14, a typical Mexican fideicomiso for residential property is not treated as a trust for U.S. federal tax purposes. Confirm with your U.S. tax advisor.
Buying in Los Cabos?
We coordinate the fideicomiso with the bank and the notary on every purchase, so you know the costs and the timeline before you make an offer.
Source: Mexican Ministry of Foreign Affairs (SRE), restricted zone rules and official 2026 fees; Puerto Los Cabos real estate FAQ (renewal term); IRS Revenue Ruling 2013-14; typical bank fees as reported by U.S. expat tax advisors. Bank fees vary and are not set by the government.
Disclaimer: Karla & Erick | Cabo Realty provides educational content about real estate in Los Cabos. We help buyers, mainly from the United States, find homes, condos and lots in the region. We are MLS members and operate under the brokerage Century 21 Paradise Properties. This is not legal or tax advice.
Karla & Erick | Cabo Realty | Century 21 Paradise Properties
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