Buyer Beware

Never buy land in Colotepec (including La Punta de Zicatela and the Barra de Colotepec) without getting the acta de posesión from the seller. Some people will try to sell you property with an escritura pública (clear title). Nothing wrong with that, as long as they also have the acta.

In fact, strictly speaking you can never “buy” land in Colotepec, the acta de posesión just gives you the right to occupy it.

Unlike land in Puerto Escondido that was expropriated by the federal government in 1970, (See Vivapuerto.com issue 26) all the land in Colotepec is tierra comunal (land controlled by the community and not the federal government). You do not pay federal taxes on communal land, because legally the property belongs to the community. Your acta gives you the right to use your land, sell it, and to pass it on to your heirs. Property disputes on communal land are settled by the Agrarian Tribunal in Oaxaca, not by State or Federal courts. If you have an escritura, you will have to pay property taxes and the capital gains tax when you sell your property.

Foreigners cannot own communal land anywhere in Mexico, even outside the restricted zone 50 km from the coast. But the Bienes Comunales of Santa María Colotepec does issue actas de posesión to both Mexican nationals (persona física) and Mexican corporations (persona moral).

Fortunately, foreigners can get an acta de posesión if they have a fideicomiso (bank trust) in their name since banks are Mexican corporations. This is the path recommended by Eugenio Castellanos Jiménez, the president of the Bienes Comunales of Colotepec. Of course, the property must have an escritura from the land office in San Pedro Pochutla. All the properties in the gated communities of Los Naranjos, Cumaná and Rancho Neptuno have escrituras and actas de posesión, as do some properties in Brisas de Zicatela, Santa María, Tamarindos, Barra de Colotepec and elsewhere.

Another legal avenue is buying the land through a Mexican corporation. A Mexican corporation can be fully owned by foreigners with tourist visas, but it must have a Mexican administrator.

Source: Viva Puerto