Moving to Mexico from the US: Everything you need to know
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Property taxes in Mexico: Full guide for Americans
Mexico is an attractive prospect for foreign buyers and investors, but it’s important to understand exactly how the Mexican property tax system works.
We’ve put together everything you need to know about property taxes in Mexico, including types of taxes, regional differentiations, and how to pay your tax bill.
We'll also introduce Wise — your international money transfer alternative. Use Wise to send stress-free transfers to over 140 countries - all at the standard mid-market exchange rate.
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What are property taxes in Mexico?
There are a few annual and one-off property taxes for homeowners in Mexico. You’ll need to look into these taxes before moving to Mexico.
Foreigners are subject to the same property taxes as Mexican locals, but Mexico has specific rules for foreign nationals purchasing some properties.
In some cases, foreigners may only be able to purchase property in Mexico through a bank trust, also known as a fideicomiso. The bank will hold ownership on your behalf.
If you manage your property through a trust, you’re still liable for the same property taxes as anyone else. However, your tax notices may be addressed to your bank. You may also be subject to different administrative regulations.¹
Property taxes in Mexico by regions
The cost of Mexican property taxes is likely to differ significantly by region. It’s up to individual states and municipalities to assess your property’s value and levy the appropriate annual taxes.
Here are some examples of how Mexico’s annual municipal property tax, known as impuesto predial, can differ by municipality.
| Region | Tax |
|---|---|
| Guanajuato City | 0.1% to 0.2% of assessed property value |
| San Miguel de Allende | 0.15% to 0.25% of assessed property value |
| Querétaro | 0.2% to 0.3% of assessed property value² |
What types of property taxes are there in Mexico?
Let’s take a look at some of the most common types of property taxes in Mexico.
Municipal property tax
Known as impuesto predial, or just predial, Mexico’s municipal property tax is an annual, recurring payment based on the assessed value of your property.
Some local municipalities charge a percentage of the assessed value of your home, whereas others use marginal bands for different property values.
Predial rates and property valuations can change over time, so it’s important to be aware of how updates may affect your annual tax bill.¹
Property acquisition tax
Property acquisition tax is a one-time tax. You’ll pay it whenever you purchase a new property in Mexico.
Known as impuesto sobre adquisición de inmuebles (ISAI), Mexico’s property acquisition tax is typically based on the higher of 3 values:
- Your property’s declared purchase price
- Your property’s most recent assessed value
- Your property’s appraised value for tax purposes
You’ll pay ISAI through a notary public when you officially register the property’s deed in your name.¹
Capital gains tax
Capital gains tax is charged on gains from property sales. If you sell your home, you may need to pay capital gains tax.
In Mexico, capital gains tax is known as impuesto sobre la renta (ISR). If you’re a non-resident, you’ll pay a rate of 25% on the gross sales price of your home.
However, you may be able to access a 35% rate on net gain. This can reduce your overall tax bill, as you’ll be charged only on the gains you’ve acquired from your sale, rather than the gross sales price.
Although both nationals and foreigners must pay ISR, the rules and rates can vary for tax residents and non-residents. Make sure to consult a tax specialist for more information about your situation.¹
How are property taxes calculated in Mexico?
Mexico’s annual municipal property tax is calculated using your home’s assessed value. You’ll pay a percentage of this value each year.
Typically, your municipality will multiply your home’s cadastral (assessed) value by a set municipal rate to determine the taxable value of your property. This value may be significantly less than the actual market value of your home.¹
Your municipality will use a range of factors to determine the cadastral value of your property, including its location and land characteristics.³
Let’s take a look at how much you’ll pay in Mexican property taxes, including rough percentages for property ownership.
| Tax | Cost |
|---|---|
| Municipal property tax (predial) | Depends on municipality – some charge a set percentage, whereas others use marginal rates by value |
| Property acquisition tax (ISAI) | Roughly 2% to 5% – varies by municipality |
| Capital gains tax (ISR) | 25% for non-residents¹ |
How to pay property taxes in Mexico
If you want to buy a condo or new home in Mexico, you’ll need to understand exactly how and when to pay your Mexican property taxes.
The process of paying taxes in Mexico is relatively straightforward. You should be able to pay your tax bill via your local municipality’s online tax portal, an authorized payment kiosk, or your local bank.¹
Each municipality may set different deadlines for paying your predial tax bill.² Taxes like property acquisition tax will be collected when you transfer ownership of your new home.
If you’re paying your tax bill in Mexican pesos (MXN), open an international money transfer account like Wise to avoid hefty currency conversion charges.
You can use your Wise account to pay your tax bill at the standard ‘fair’ mid-market exchange rate. No markups, no hidden fees, no stress!
Are there any property tax exemptions in Mexico?
There are a few property tax exemptions for homeowners in Mexico, including locals and foreigners. For example, first-time buyers may access a reduced tax rate in some locations.
You may also be able to access reduced tax rates for social interest housing or specific property types. Make sure to consult your municipality to find out about any local schemes.⁴
Discounts on Mexican property taxes
You’ll need to pay your annual property taxes by your municipality’s yearly deadline. However, many local regions offer considerable discounts if you pay your bill early.
This discount could be anywhere from 10% to 25% off your predial tax bill, depending on your municipality. For example, property owners in Querétaro can access a 20% discount if they pay their bill by 31 January.²
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Penalties for not complying with property tax rules in Mexico
If you don’t pay your predial on time, or you refuse to pay, you may face additional charges on top of your tax bill. These charges can build up month by month, so you may end up paying considerably more than your original bill.
Failure to properly declare your property value or provide your local municipality with any key documentation about your purchase can also lead to legal consequences.¹
Frequently asked questions
Buying property in Mexico? Let’s take a look at everything you need to know about Mexican property taxes.
Do US citizens pay higher property taxes than Mexican locals?
No, typically, everyone pays the same property tax rates, regardless of nationality. You’ll need to look into any nuances by municipality or region. Capital gains tax may be charged differently for tax residents and non-residents.
If you’ve purchased your Mexican property through a bank trust, you may also be subject to different administrative processes than a Mexican national. Speak to a local or international tax expert for more information.
Are Mexico’s property taxes lower than those in the US?
Mexico’s property taxes are usually lower than those charged in the US, depending on your state or municipality.
In the US, tax rates can reach as much as 2% of your property’s assessed market value. In Mexico, you may pay as little as 0.05% of your property’s cadastral value. Your home’s cadastral value is also likely to be less than its market value.
Mexican municipalities also tend to reassess their tax rates or property values less frequently than in the US, which means you may end up paying the same low rate for a longer period of time.⁵
How are Mexican property taxes calculated?
Your annual property taxes are determined by your local municipal government. Your rate is typically based on the cadastral (assessed) value of your home, multiplied by a fixed rate set by your municipality.
Some areas may use marginal rates to levy higher taxes on those with more expensive properties. Others may tax a standard percentage of your overall value.
Are there any property tax exemptions for foreigners in Mexico?
Some foreign buyers may access a reduced tax rate or special tax deductions. For example, some municipalities offer reductions for first-time buyers or those purchasing social interest properties.
You can also access discounts off your predial bill if you pay it before your municipality’s tax deadline. This could be as much as 25% off.
It’s important to understand Mexico’s property tax system. You’ll need to pay annual property tax every year – and you’ll pay property acquisition tax when you buy a new home.
As a foreigner, you won’t face higher taxation than Mexican locals. You may also qualify for local exemptions and discounts, particularly if you’re a first-time buyer or you pay your tax bill before the deadline.
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Sources
1. The Traveler - Mexican property taxes explained for foreign homeowners
2. Bajio Homes - What is predial?
3. Plalla - How to calculate property tax in Mexico for 2026
4. The Latin Investor - Property taxes, fees and costs in Mexico
5. Greenback Tax Services - Does Mexico have property taxes?
Sources checked 05/26/2026
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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