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Below we have provided you with an overview of some of the applicable taxes in Mexico.


While in the USA property taxes will vary by state but are often in the range of 2 - 3%, in Mexico, taxes are generally 0.2% - 0.3% thereby saving you 10 times what you would pay in the USA on yearly property taxes.

Income taxes

  • If you work in Mexico and receive income from a Mexican-sourced income, you will need to pay personal income tax in Mexico and file a Mexican tax return each year.

    If you are a United States citizen or a US green-card holder, you must also file a tax return in the United States, if your income (all your income worldwide, not just your US income or Mexican income alone) exceeds a low minimum threshold (see your tax professional or the IRS to find out the threshold for your filing status); however, the United States has agreements with most countries, including Mexico, so that you won't be liable for double taxation (in other words, you would not pay taxes twice).

    Also, your first $75,000 should be exempt from US federal income tax (this varies from year to year, so again check with your tax professional or the IRS .) We advise you to consult with your tax advisor on these matters, and preferably with an international tax planner in your home country.

    Sales Tax/Value-added Tax
    Value-added Tax (IVA, or Impuesto al Valor Agregado) adds 10- 15% to the cost of most goods and services in Mexico.

Inheritance & Gift Tax


  • Mexico does not charge an estate or inheritance tax; however, gifts of real estate, if they are not gifts to your husband, wife, or immediate family, may be taxable, with the tax to be paid by the recipient of the gift. Please consult with your tax advisor before making a gift of your Mexican real estate.

Transfer Tax


  • Property that's transferred, sold, donated, subdivided, merged with another property, or placed in trust, is subject to an Acquisition Tax of 2% of the assessed value of the home.

Capital Gains Tax, or ISR (Impuesto Sobre la Renta)


  • When buying property, the seller pays the Capital Gains Tax, or ISR, unless the buyer has agreed to do so. The Mexican Notario (Notary Public) will advise you of the amount. If you sell your Mexican home, you are not liable for Capital Gains Tax provided the home has been your primary residence for at least the past two years.

    Otherwise, you are liable for Capital Gains Tax at a rate of 20% of the declared value of the transaction, or 40% of the net gain on the sale of the home, less the value of improvements made, commissions paid, and certain other allowable deductions.

Rental Income Tax


  • If you rent out your property, but reside outside of Mexico, your rental fees are taxable at a rate of 21% in Withholding Tax. If you rent out your property but do reside in Mexico, your rental fees are taxable at regular personal income tax rates.

Can I as a Mexican Foreigner, purchase property within the restricted zone under a Mexican corporation entity?


  • It depends, if you want to acquire property for residential purposes you are recommended to acquire via a bank trust. If you want to acquire property for commercial purposes you are recommended to acquire via a Mexican Corporation with certain procedures and requirements.

If I live in Mexico, and earn money down in Mexico, what obligations do I have in regards to USA or Canadian Taxes?


  • If you live in Mexico and you receive revenues earned in Mexico, you are required to pay taxes only in Mexico. Such taxes include Income taxes and VAT. Mexican Corporations (Personas morales) pay approximately 28%, Personal Income taxes (Personas fisicas) pay approximately 17% up to 28% depending on your tax classification. VAT has a current rate of 15% (except for some tourist cities and states which is at 10%).

If I live in Mexico, and earn money from my USA / Canadian operations, what obligations do I have for Mexican Taxes?


  • If your revenue source is generated from USA/Canada, then you are required to pay in the respective country. The taxes you are required to pay in Mexico will be based on the difference of these tax rates. If the tax rate is higher in Mexico, than that difference will be due in Mexico. If the Mexican tax rate is below that of Canada or USA, than no extra taxes are due in Mexico.

Once I resale my property investment, what obligations do I have when returning the monies back to my home country?


  • Once you have paid taxes in Mexico on the sale of your property, and you take the monies to your home country, you are allowed to credit all previously paid taxes of Mexico. This avoids any double taxation between the countries.

If I rent out my house or condo in Mexico, what Mexican taxes am I obligated to pay?


  • Mexican income taxes are due depending on the total income generated. There are allowances allowed for deducing expenses via official invoices called "facturas". The tax rates vary from 17% up to 28% depending on your tax classification.