The lower house of Mexico's congress voted Tuesday to loosen
longstanding restrictions on foreigners buying property along the coast
and the nation's borders, a proposal that drew stiff criticism from some
The measure, which passed 356-119 in the Chamber of Deputies, still
needs approval from the Senate and a majority of the country's 32 state
legislatures to become law.
For decades, foreigners have had to use real-estate trusts or Mexican
front companies to buy beachfront properties, because Article 27 of the
constitution prohibits non-Mexicans from directly owning land within 31
miles (50 kilometers) of the coast and 62 miles (100 kilometers) of the
nation's borders. The trusts and front companies have provided a
lucrative income for banks, lawyers and notaries who are required to
operate them, and the extensive paperwork has discouraged many
foreigners from buying.
The change, sponsored by Congressman Manlio Fabio Beltrones of the
governing Institutional Revolutionary Party, would allow foreigners to
directly buy ocean-front property for residential use, but not for
Such proposals have been made before, but not by figures as influential as Beltrones, the PRI's congressional leader.
"This is about eliminating the middlemen who, through trusts,
corporations and front men, have made a living off the constitutional
ban," Beltrones' office said when he submitted the bill earlier this
month. "It is a question of encouraging tourism investment and creating
The Union of Indians and the Farmers' Force, a farmworkers group,
criticized the proposal Tuesday, saying it would "give free rein to
foreigners to legally buy up the best land, and encourage robbery and
financial and real estate speculation."
"This would result in the foreign colonization of the country," the groups said in a statement.
Those are strong sentiments in a country frequently invaded by foreign
powers in the 19th and early 20th century. Mexico set up the
restrictions to ensure national security and avoid the creation of
foreign enclaves like the one that grew up in a former Mexican province
known as Texas, where the foreigners eventually rebelled and split from
"For historical reasons, it was considered risky to allow foreigners to
establish themselves permanently on the coast and the borders,"
according to Beltrones' proposal, but it says "the conditions that led
the Constitution to limit such purchases have been overcome."
Arguing for the change Tuesday, Beltrones said, "Apart from ensuring
legal certainty over property rights, this would financially benefit the
coastal town government, given that it would make tax payments, like
property taxes, easier to collect."
Kevin Graham, a Texan who runs the Costa Maya Living real estate firm in
the Caribbean beach town of Mahahual, said some potential buyers are
put off by the prospect of not being able to hold direct title to beach
"I feel, with all the doubts they have, it's slowed the market down for foreign investment here," he said.
Federico Estevez, a political science professor at the Autonomous
Technological Institute of Mexico, also cited the benefits to foreign
investment by simplifying ownership for foreigners.
"This is to bring the law up to date, because basically it's going on
anyway, but with all these foul distortions of having to pay people
off," he said.
Noting that Mexico has been seeking more foreign investors, Estevez added: "You want their money, keep them here."
Reprinted from ABC News....