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Mexican beachfront properties

Monday, April 29, 2013

Foreigners may at some point have an easier time acquiring Mexican beachfront properties, following the approval of a new law earlier this month by the lower house of Congress.

Mexico currently has one of the world’s toughest restictions on real estate ownership, including a prohibition on any foreigner from owning a property within 50 kilometers of a sea or ocean.

Existing rules were intended to prevent a foreign state from acquiring significant holdings of potentially strategic land.

However, the 50-kilometer restriction has always been extreme, in terms of the degree of protection, which current rules provide.

Nor has any country in practical terms threatened Mexican sovereignty over coastal areas.

Eliminating the distinction between the rights of foreigners to buy beachfront properties, as compared with the rights of Mexicans, could create new incentives for buyers.

New investment in tourism properties would in turn stimulate the economy.

Currently, a foreigner can for practual purposes acquire the right to use a coastal property.

To do so, however, there must be a Mexican property-owner, who in turns leases the property to the foreigner.

These arrangements are more complicated than a simple purchase, which drives up the price and makes Mexican properties less attractive than those, in other countries.

But changing existing rules means amending the constitution.

To make this happen, the Mexican Senate would likewise have to approve the changes, along with a majority of Mexico’s 31 states.