Guide to Property Taxes in Mexico

Nonresident individuals are liable to pay tax on their Mexican-sourced income. Married couples are taxed separately.

Income Tax (Impuesto Sobre la Renta, ISR)

Income earned by nonresidents is taxed at progressive rates.

Employment Income Tax 2023 for Nonresidents

Taxable Income, MXP (US$) Tax Rate
Up to 125,900 (US$6,626) 0%
125,900 – 1 million (US$52,632) 15%
Over 1 million (US$52,632) 30%
Source: Global Property Guide

Rental Income

Gross rental income from the leasing of real estate, property, and time-sharing services by a nonresident individual is subject to a 25% withholding tax. No deductions are allowed.

Capital Gains

Generally, capital gains realized by nonresidents from transferring real property in Mexico are subject to 25% withholding tax on the gross amount or selling price of the property.

Nonresidents with Appointed Local Representatives

Nonresidents who have appointed representatives residing in Mexico may be taxed on their net capital gains at 30%. The tax base is the gross selling price or market value of the property, whichever is higher, less adjusted acquisition costs (the adjusted cost may not be less than 10% of the transfer value), investment costs and improvement costs, and transaction costs (taxes, valuation, notary fees, commission, and brokerage fees).

Corporate Taxation

Income Tax

Income and capital gains earned by companies are generally taxed at a flat rate of 30%. Income-generating expenses are deductible when calculating taxable income.

Corporate Rental Income Tax

Rental income earned by nonresident companies is taxed at a flat rate of 30%.

Property Buying and Selling Costs/Taxes

Total roundtrip transaction costs in Mexico are between 6.5% to 13.5%.

Cost Amount
Property Transfer Tax 2-5%
Agent Fee (Buyer) N/A
Agent Fee (Seller) 3-6% (+16% VAT)
Legal Fees 1-1.5%
Notary Fees 0.5-1%

Property Taxes

Property Tax (impuesto predial)

Property tax is levied on the cadastral value or assessed value of the real estate. The tax rate ranges from 0.05% to 1.2%, depending on the property location as each state has a different tax rate. It is payable to the state government annually.