Buyer Resources

“Use of soil permits restrictions on La Paz, B.C.S.”

This article is written using the previous example from the article “Creating your first development project – General Cost & Calcs”, the data will be used to show the importance of the restrictions on the use of soil permits.

Anyway, what is the use of soil permits restriction, well basically the government assigns to any property a permit to build or develop according to certain specifications, this is what we call the use of soil.

To do this tramits you have to follow a procedure and usually could take from 45 days up to two years, depending on the complexity of what you are doing.

The use of soil is divided into several categories from:
Residential
Commercial
And some other we will later describe.

Each one of this category has important information that rules the way you will build, this are:

• Maximum height (everything goes in meters)
• Refers to the maximum height you are allowed to build from the ground to highest point on the building
• Minimum dimension of the lot
• The minimum area each lot must have
• Minimum front of the lot
• Minimum length on the sides of the lot
• Minimum back length of the lot
• Coefficient of land occupation
• This is a little more complex but refers to the total space you will use on the ground, for example if you have a 10,000sq feet property, and the government tells you, your coefficient is .4, then you multiply .4 x 10000, then you know you can only occupy 4000sq feet of the lot. (coefficient x size of the lot)
• Coefficient of use of the land
• This coefficient has the same formula, however is means not only the occupancy of the lot but the total amount of construction you can have, for example if you have a property that measures 10,000sq feet, and your coefficient of the use of land is .8, means you can build up to 8000 square feet on your property. Remember coefficient of land occupation means the space on the ground, and the Coefficient of the use of the land means the total amount of construction

I guess this terminology is not the most accurate however, remember English is my second language and usually I handle this information in Spanish.

So how will this help me on my project. Here comes the tricky part, on our previous article you wanted to build 25 homes on a 20,000 m2 property, then you had a minimum cost per home of $211,600 USD after you did a bunch of math, well it all comes down to the use of soil permits.

To create your master plan you must first consider what kind of use you might want, let’s say you requested a “Turistic Residential” use of soil cause you are on a beach front property. You go back to your numbers and bang yourself to the wall when you see law regulation and find the following:

Government use of soil information:
Name: Turistic residential
Minimum size of the lot: 800 square meters (about 8500 square feet)
C.L.O. = .4
C.U.L. = .6

So let’s see, you wanted to put 25 homes on this use of soil, but if we do some calcs they wont just fit.

800 sq meters x 25
Well you did the math all right and you get exactly 20000 sq meters, but wait!!!
We forgot that according to Mexican regulation you must have a donation area that usually is around the 10-15%.
You see what I mean?
So what do we do, let’s donate three 800sq meter lots, so now you have only 22 lots for sale.

Your previous total cost, before construction (from the other article) is $1,540,000 USD, and for 25 lots you got a minimum sales price of 61,600 USD, now your minimum sales price will be $70,000 USD. This number came cause instead of dividing the base cost by 25, you have to do it by 22.

Now lets build our houses,

CC= 1000 USD x 150m2 per house x 22 homes
CC= $3,300,000 USD

Now our minimum sales price is:

$3,300,000 + 1,540,000 = $4,840,000 USD /  22 =
Minimum sales price = $220,000

So if you sell your home at $450,000 USD your total profit will be

$450,000 – 220,000 = 230,000 USD per house x 22 homes = $5,060,000
Minus taxes = 5060000 x .33 = $3,390,200

Before we started to get into law issues, we calculated a profit of $3,993,200
A small difference of $603,000 USD.

Therefore please remember to consider use of soil before you do your projects.

I hope this helps, for any questions you can send me an email.

Sincerely,

Norvell Abente

• Author: Norvell Abente
• E-mail the author: abente@investbajasur.com
• About the author:
• Current Job: Management Director at Invest Baja Sur S de RL de CV
• General Info: Born in La Paz, B.C.S. on 11/11/1977, has a major on Management and a Master on Business Administration, has an important background experience on Finance, IT. He is currently working with important investment groups and intermediaries in México. On the side he is investing on the Development Project Tierra del Sol. He is also the designer & Programmer of the website InvestBajaSur.Com, you if you don't like anything on it, is his fault!

Contact Us
Our offices are located in La Paz, B.C.S. Questions or Comments please send an email to: info@investbajasur.com and a representative will contact you shortly or call directly at:
Invest Baja Sur S. de R.L. de C.V. | Real Estate Professionals in Baja California Sur
Francisco I. Madero # 389 Centro. C.P. 23000. La Paz, B.C.S., México.
Phone. (612)128-8884 or 74 & Fax (612) 128-8877
If you are calling from U.S. or Canada dial 011 52 (612)128 8884 & Fax 011 52 (612)128 8877