02 Jun “Just The Facts” about the Federal Zone and Your Beachfront Property”
JOINus Magazine DECEMBER 2007
Recently I received a forwarded email from one of my clients in Las Conchas regarding the Federal Maritime Zone in Rocky Point.
The email stated that ALL beachfront properties MUST have a Federal Zone Concession — which legally is not true — as well as a number of other mis-statements of fact and law. As I read this email, I realized these mis-statements of fact and law — and the tone of the communication — could be rather alarming for homeowners with beachfront property.
The facts: The Federal Maritime Zone covers the entire coastline of Mexico, and extends 20 meters (60 feet) inland from the highest tide-line at any given location. No home or any other type of construction can be built within this protected 60 foot wide coastal reserve — unless it is a properly permitted industrial or commercial facility, which is not the case for those who own beachfront homes or lots.
A Concession — in American and Canadian terms, a permit — to use the Federal Zone may be granted to the owner of a beachfront property for the portion of the Zone adjacent to his/her property. This permit is granted by SEMARNAT (similar to the United States Environmental Protection Agency) and it is OPTIONAL for those owners that have lots adjacent to the Zone. If a property owner CHOOSES to apply for a Federal Zone Concession for their beachfront property they have priority to get it: no one can just put a taco stand or a wall in front of your property just because they decided to apply for a Concession!
When there are existing structures that encroach on the Federal Zone — or when the property owner wishes to build new structures — a Concession must be obtained, and there are fairly straightforward legal procedures do so. The granting of a Concession follows a process; is not granted immediately; usually takes several months; and — in rare cases — even years to be obtained.
When a property borders the Federal Zone it is subject to the Federal Zone Tax — which is not the same as the payment for the Concession annual fees: this is a Federal Tax. In the case of Rocky Point this tax is collected by the City because of a coordination agreement between Rocky Point, the State of Sonora, and Mexico’s federal government. The email stated that the homeowners also HAD to apply for an FM3 visa. This is also inaccurate because an FM3 visa is only needed for certain activities: simply being a home owner is not necessarily an “activity”. What the owner plans to do with the house and other factors related to income (or not) associated with the property determine who needs an FM3 (or FM2) visa.
The email stated that the city and SEMARNAT are planning to confiscate those houses or properties who “owe” this Federal Tax. This is preposterous!
Mexico is a country where the law prevails, and there are civil rights enshrined in the Mexican constitution that protect anyone in Mexico against losing their belongings or possessions without having had the right to defend themselves.
In the case of any tax dispute, property owners must be notified personally, so that they can defend themselves. For any authority to enter into a foreclosure (not confiscation!) related to a tax debt — such as Property Tax or Federal Zone Tax — that authority must follow a series of legal processes that assure the constitutional rights of the property owner; give the property owner the opportunity to challenge the validity of the tax; and which provide ample time and opportunity to pay the tax prior to civil action or consequence.
If you have any question or concern about tax payments, the Municipal authorities in Puerto PeÃ±asco have always been very cooperative and flexible in creating options that allow property owners to resolve tax situations. I strongly recommend that any property owner with concerns contact Mr. Jesus Garcia, Finance Director for the City of Puerto PeÃ±asco, directly. Our firm has has always found him to be both available and helpful, and we believe that he is the perfect contact for any property owner seeking accurate information regarding taxes and tax arrangements.
The Federal Maritime Zone is not something to be feared. This far-sighted legislation has been of clear benefit to both Mexican and non-Mexican beachfront property owners and users by insuring that Mexico’s magnificent beaches remain unspoiled, and can be enjoyed by everyone.
It is unfortunate that some people choose to circulate “scare tactic” emails that pollute the enjoyment that all Mexican beachfront property owners should experience, and we hope that we’ve alleviated some of the false concerns that these emails may have raised.
By Anna Cecilia Dabbs, Senior Real Estate Attorney, O’Farrill & Associates