Times of prosperity are anticipated for the Tijuana-Rosarito-Ensenada Coastal Corridor with the recent reform to Article 27 of the Mexican Constitution, approved by The Mexican House of Representatives (Camara de Diputados).
Previously, non-Mexican Nationals could only acquire property on the “Restricted Zones” through a Fideicomiso (Bank Trust) or by Mexican Corporations. Today, these individuals will be able to acquire homes by the beach and hold full ownership, which according to Rosarito Real Estate Professionals; it will result on the reactivation of the real estate sales in these areas.
With 356 votes in favor, 119 against and two abstentions, the House of Representatives on April 23 approved the modification to Article 27, which would allow non-Mexican Nationals to acquire land or homes for residential use and non-commercial purposes in what has been known as the restricted zone; a 100km area from Mexico’s international borders and 50km’s from the beaches.
If there is a place in Mexico that will experience the immediate effects by the change on this law, it is the Tijuana-Rosarito-Ensenada Coastal Corridor, in which residential developments currently house a little over 15,000 foreign residents, most of them holding title to their homes through a Bank Trust (Fideicomiso).
According to Rosarito’s Real Estate Professionals Association (AMPI), more than 80% of these foreign residents are U.S. Citizens, and the other 20% is a mix of Canadians, Japanese, Russians, Hindus, among other nationalities.
Old neighborhoods like Las Gaviotas or San Antonio del Mar and some other more recently developed residential areas like El Descanso, Plaza del Mar, Calafia or Las Ventanas, have been home to a majority of foreign residents that have had no choice than having the title to their properties through a Fideicomiso, which can be an expensive and slow process when obtaining it.
“This adjustment to the law will benefit everyone. The non-Mexican Nationals wanting to own real estate here, whom will be able to buy property and avoid the cost and time that it takes to obtain the Fideicomiso; the Real Estate industry as sales will rise, and everyone in the community, as these new residents will become a “permanent tourism” that will have a more permanent impact to the economy”, declared Baja Open House Realty’s Real Estate Agent, Beba Cabello, who has a decade of experience on the Coastal Rosarito Real Estate area.
“A weekend tourist visit will impact positively the Hotels and some restaurants. But a foreigner becoming a permanent resident and home owner will generate a more consistent income to the area; small local businesses and service providers. These new residents will not only use established services, but they will also create new jobs like gardeners, cleaning services, maintenance, cooks, security guards, nurses, etc.” said Beba Cabello.
One of the main factors that prevented foreigners from purchasing Real Estate along the coast in the past, was the fact that non-Mexican buyers had to hold title through a Fideicomiso, which although it truly gives legal certainty, it can be a slow process with the Bank, said Real Estate Agent Mario Restrepo.
“The transactions will now be much faster and simpler, and although the Fideicomiso always gave the legal security to the buyers, most buyers will now feel more comfortable holding the title directly as sole administrators and owners,” added Mario Restrepo.
The Real Estate Professionals Association directed by Victor Loza is optimistic and anticipates a favorable climb on the sale of homes in the Coastal area.
It is estimated by this Association that with this reform, sales will quadruple.