Guide to Property Taxes in Mexico
Tax Rate on Rental Income |
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| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 25.00% | 25.00% | 25.00% |
Non-resident individuals are generally subject to Mexican income tax only on income derived from Mexican sources, including income and taxable gains arising from real estate situated in Mexico.
Income Tax (Impuesto Sobre la Renta – ISR)
Mexico applies different tax rules to non-residents depending on the category of Mexican-source income.
For example, non-resident employment income is generally subject to the following rates:
Employment Income Tax 2026 for Nonresidents
| Taxable Income, MXN | Tax Rate |
| Up to MXN125,900 | 0% |
| MXN125,900 – MXN1 million | 15% |
| Over MXN1 million | 30% |
| Source: Global Property Guide | |
Rental Income Tax
A non-resident individual deriving income from the lease of real estate situated in Mexico is generally subject to Mexican income tax at a flat rate of 25% of gross rental income.
Under the ordinary non-resident regime, the tax is calculated on gross rent without deductions for expenses such as repairs, maintenance, financing costs, management fees or depreciation.
Where rent is paid by a person required to withhold Mexican tax, the applicable tax is generally collected through withholding. Otherwise, the non-resident may be responsible for satisfying the applicable Mexican tax obligations directly.
For a standardized foreign property investor, the effective Mexican income tax burden can therefore generally be presented as 25% of gross rental income, before considering any applicable double taxation treaty provisions or alternative structures.
Capital Gains Tax
A non-resident disposing of Mexican real estate is generally subject to Mexican income tax on the transaction.
Under the standard method, tax is generally imposed at 25% of the gross sale proceeds, without deductions.
Alternatively, subject to the applicable statutory requirements, the non-resident may elect to have the transaction taxed at 35% of the net taxable gain.
Under the net-gain method, the taxable gain is broadly determined by deducting qualifying adjusted acquisition costs, improvements and other permitted transaction-related costs from the sale proceeds. The election generally requires compliance through an authorized representative in Mexico and the involvement of the notary handling the transaction.
Accordingly, the two principal methods can be summarized as:
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25% of gross sale proceeds, without deductions; or
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35% of the qualifying net capital gain, subject to the applicable requirements.
The 35% rate, rather than 30%, should therefore be used for the current net-gain alternative.
Corporate Taxation
Mexican resident companies are generally subject to Corporate Income Tax at 30% of taxable profits.
A foreign company operating through a permanent establishment in Mexico is generally subject to Mexican corporate income tax at the same 30% rate on taxable income attributable to that permanent establishment.
Qualifying expenses incurred in generating taxable income are generally deductible, subject to Mexican tax rules.
Property Buying and Selling Costs/Taxes
| Cost | Amount |
| Property Transfer Tax | 2.00% - 5.00% |
| Agent Fee (Buyer) | N/A |
| Agent Fee (Seller) | 3.00% - 6.00% |
| Legal Fees | 1.00% - 1.50% |
| Notary Fees | 0.50% - 1.50% |
| Costs Paid By Buyer | 3.50% - 8.00% |
| Costs Paid By Seller | 3.00% - 6.00% |
| Roundtrip Costs | 6.50% - 14.00% |
Property Taxes
Property Tax (Impuesto Predial)
Owners of real estate in Mexico are generally subject to an annual Property Tax (Impuesto Predial).
The tax is primarily imposed and administered at the municipal or local level, rather than through a single nationwide property-tax system. Consequently, the applicable rates and calculation methods vary according to the location of the property.
Property tax is generally calculated using the property's cadastral or officially assessed value (valor catastral). This value may differ substantially from the property's actual market or purchase price.
The applicable tax can depend on factors such as the municipality, cadastral value, land and construction characteristics, property type and use. Some jurisdictions apply progressive tax schedules rather than a single percentage rate.
Therefore, a nationwide range such as 0.05%–0.30% should be treated only as a broad indicative estimate and not as a statutory Mexican property-tax range.
Property tax is generally payable annually to the relevant municipal or local authority, although payment schedules, discounts for early payment and other incentives vary by jurisdiction.
