Federal Zone facts – From the June 2008 News Letter

Federal Zone facts – From the June 2008 News Letter

The mysterious “Federal Zone” is actually a very simple part of the Ley General de Bienes Nacionales (general law of national goods). This law establishes a strip of land (Zona Federal Maritimo Terrestre) around the coast of the entire country reserved for the use of the Mexican government. It originally was intended to preserve the sea shore, acilitate military defense and faciliate maritime navigation. The ZOFEMAT (federal zone) measures 20 meters wide from the mean high tide back to the property lines. No one, Mexican citizen or foreigner can “own” the ZOFEMAT. However, a concession (permit) can be obtained for its use.

The Vecinos Board, as well as most local Realtors and lawyers have understood that in order to obtain a concession, you most own the adjacent property. In other words, if your Cholla property is on the water front, no one but YOU can get the concession and open a beach-front taco stand (for example) on the ZOFEMAT in front of your property. Recently, we have discovered that a third party has applied for and received approval for a concession on the ZOMEFAT despite the fact they do NOT own the adjacent property. The controversy is being reviewed and the Federal agency (SEMARNAT) that administers the ZOFEMAT currently is not accepting ANY APPLICATIONS for concessions. Your Vecinos Board advises Vecinos owning property adjacent to the ZOFEMAT to be prepared to apply for the concession as soon as we get word SEMARNAT is ready to begin accepting applications.

Our understanding is once a ZOFEMAT concession is granted, it is good for a set numbers of years (established through the application process), and there is no annual maintenance fee. The annual fees associated with the ZOFEMAT concession are assessed in the form of the ZOFEMAT taxes many owners currently pay. Those tax rates are based on the FEDERAL ZONE owner’s intended use of the property. However, paying those taxes does NOT constitute “having” the ZOFEMAT concession. The documents for the concession are, in fact a Federally signed, stamped and written authorization for use of the ZOFEMAT. It is a document, much like your Bank Trust, but is completely separate. SEMARNAT estimates the one-time application fee to be $2,500-$3,000USD. The good news is once granted, the concession can be transferred along with your trust to future owners and Realtors feel it increases the value of your ocean front property.