Buying Property in Mexico with Dual Citizenship: Should You Use a Fideicomiso?

One of the most common questions I receive from clients with dual citizenship is whether they should take advantage of their Mexican nationality to avoid a fideicomiso (bank trust) when buying property in Mexico. A typical scenario looks like this: you’re a U.S. resident, you hold both American and Mexican citizenship, and you want to purchase property near the coast. However, your spouse is American only and will also be part of the transaction. Should you title the property in your name as a Mexican citizen, or set up a fideicomiso like all foreign buyers are required to do?

The short answer is: it depends on your tax situation, your long-term plans, and whether you want your spouse to be on the deed. Let’s break this down.

Mexican Citizens and the “Restricted Zone” - Mexican law requires foreigners to use a fideicomiso when purchasing real estate within 50 kilometers (about 30 miles) of the coast or 100 kilometers of the border. This is why most Americans and Canadians who buy in Los Cabos, Puerto Vallarta, Cancun, or other coastal areas hold title through a bank trust.

As a Mexican citizen, however, you are exempt from this requirement. You can own property in your own name in the restricted zone. This seems like the obvious choice—but it’s not always that simple.

The Tax Component - The first question to ask is whether you have a fiscal presence in Mexico. Do you have an RFC (tax ID number)? Do you file Mexican tax returns? If you are registered with the tax authority and paying even minimal taxes, then holding property in your name can make sense.

If, however, you live full-time in the U.S. and pay taxes only there, owning in your name may trigger tax complications when it comes time to register the property or sell it. In this case, some dual citizens find that it’s simpler to proceed as if they were a foreign buyer and use a fideicomiso.

Co-Ownership with a Foreign Spouse - Another key factor is whether you want your spouse on the deed. Since your wife is American only, she cannot be added to the title unless the property is held in a fideicomiso.

If you decide to purchase solely in your own name, you can create a private agreement that clarifies what happens to the property in the event of divorce, resale, or inheritance. These agreements can be legally enforceable and save time in court. Still, the arrangement leaves the asset legally in your name alone, which may not feel ideal for every couple.

The Practical Side of the Fideicomiso - Although some buyers see the fideicomiso as a burden, there are benefits that make it attractive—especially for mixed-nationality couples.

Estate planning: From the outset, you can name substitute beneficiaries and assign percentages. For example, you might designate your children to inherit equal shares. This avoids probate in both the U.S. and Mexico.

Spousal survivorship: If you and your spouse each hold 50%, the surviving spouse continues as the owner upon presentation of a death certificate. It’s not automatic, but it is far more straightforward than going through the courts.

Clear rules: The trust functions much like a bank account with a beneficiary designation. Regardless of what a will says, the beneficiaries listed in the fideicomiso prevail.

The annual fee (typically $500–$700 USD) and the paperwork are the main downsides. Only Mexican banks can serve as trustees, and they must comply with strict Know Your Customer (KYC) rules, which can mean producing multiple forms of ID and documentation.

Which Option Makes Sense?

If you have an active fiscal presence in Mexico and prefer to avoid the annual fees, purchasing in your name may be the right choice. You’ll need a private legal agreement to protect your spouse’s interests, but this can be arranged with the help of a notary or attorney.

On the other hand, if your spouse wants to be a co-owner, or if you want the benefits of clearer estate planning, a fideicomiso is likely the better option. Even some Mexican nationals with complex assets choose a trust because it simplifies succession and avoids disputes.

The choice between owning property directly as a Mexican citizen or using a fideicomiso is not one-size-fits-all. For many dual citizens, the deciding factors are tax residency and family planning. If you’re set up as a taxpayer in Mexico, buying in your name can save money and bureaucracy. If you want both spouses to be on title and ensure smooth inheritance, the fideicomiso is a clean and reliable solution.

Either way, the key is to work with a qualified real estate attorney who can review your situation, guide you through the options, and ensure that your ownership structure aligns with your goals—both now and in the future.

Fletcher Wheaton – fletcher@remexico.com

Real Estate Attorney in Cabo – info@jetzlaw.com