Mexico Property Tax (Predial): Complete 2026 Guide for Foreign Property Owners

Mexico Property Tax (Predial): Complete 2026 Guide for Foreign Property Owners

Mexico's predial (annual property tax) is one of the most pleasant financial surprises for foreign property owners. Annual rates are remarkably low compared to US and Canadian equivalents. But the billing cycle, assessment methodology, and payment process all work differently from what most owners expect.

What the Predial Is

The predial is an annual municipal tax on real property — land and buildings — in Mexico. It's administered at the municipal level, paid to the ayuntamiento (city hall) of the municipality where your property sits, not to any federal or state agency. This means rates and assessment methods vary by municipality, but all are low by international standards.

How Much Does It Cost?

Annual predial on a typical expat property — a 2-3 bedroom colonial home or apartment in Guanajuato, Oaxaca, Merida, or San Miguel — typically runs $200–$800 USD per year. Properties valued at $300,000+ USD at market might pay $1,000–$1,800 annually. For context: Texas property taxes on a similar $300,000 property would run $6,000–$9,000/year. California: $4,000–$6,000/year.

Why is it so low? Rates apply to the valor catastral — the municipal assessed value, which in Mexico is typically 20–40% of true market value. A property worth $200,000 USD at market might have a catastral value of $40,000–$80,000, and the tax rate (typically 0.1–0.3% annually) applies to that lower figure. Catastral values are politically suppressed and updated infrequently. This is good for you as a taxpayer.

When and How to Pay

Timing: Pay Early for the Discount

Predial is due annually, typically in January–February for the prior year. Most municipalities offer a significant early-payment discount (descuento por pronto pago) of 10–25% if paid in January or February. Paying in March costs full price. Paying late generates surcharges (recargos). The January discount alone is worth the administrative effort of paying on time.

In Person at the Tesoreria

Bring your escritura (property deed) or the account number (cuenta predial) from a previous receipt, a valid ID, and payment (cash or card depending on the municipality). The tesoreria (municipal treasury) looks up your property by address or account number, generates the current bill, and prints a receipt. Keep every receipt permanently — they document your tax payment history and are required if you later sell the property.

Online Payment

Major cities including CDMX, Guadalajara, Merida, and Queretaro now offer online predial payment through their municipal portals. Search '[your city] pago predial en linea' for your municipality's portal. You need your cuenta predial number from your deed or any previous predial receipt. Set a calendar reminder for January each year — the discount window closes fast.

The Catastro: Where Your Assessment Comes From

Your property's valor catastral is maintained by the catastro — the municipal land registry. If you've recently purchased at market price and the catastro value seems low, that's normal. Values are updated infrequently and rarely reflect market prices. If your predial seems unusually high relative to neighbors with similar properties, you can request a catastral review at the catastro office (usually located in or near city hall). Bring your deed and previous bills.

Capital Gains When You Sell: ISR sobre Enajenacion

When you sell property in Mexico, capital gains tax applies. The notario publico is legally required to calculate and withhold the applicable ISR (impuesto sobre la renta) at closing. For foreign residents with an RFC, rates depend on how the gain is calculated — the maximum rate is 35%, but with proper documentation (cost basis evidence, capital improvement records, and RFC-linked ownership), actual effective rates are often significantly lower. A primary residence exemption exists under certain conditions. Discuss your specific situation with a Mexican notario and accountant well before listing.

ISAI: The One-Time Acquisition Tax When You Buy

When you purchase property, you pay ISAI (Impuesto Sobre Adquisicion de Inmuebles) — a one-time acquisition tax set by state law, typically 2–4% of the higher of the purchase price or catastral value. Paid at closing through the notario. Budget this as part of your total purchase cost alongside the notario fee (1–3% of purchase price) and any agent commission (3–5%).

Property Ownership Without RFC: A Note

Foreign nationals can technically purchase property in Mexico without an RFC — the notario can use a generic non-resident tax code for the transaction. However, selling without an RFC subjects you to a higher automatic withholding rate. If you own property in Mexico or plan to buy, get your RFC as soon as you have legal residency status. The downstream cost of not having it at time of sale is real.

Free Tools

The Master Guide ($47) covers property ownership in depth: mymexicomove.com/shop | Mexico Reality Check ($99): mymexicomove.com/booking-calendar | paul@mymexicomove.com