Mexico Property Taxes for Americans: What You Owe in 2026

Mexico property taxes for Americans come in three pieces: a yearly property tax (predial) that is low by US standards, taxes on rental income if you rent the home out, and income tax when you sell. As a non-resident seller you pay 25% of the gross price, or 35% of the gain if you choose, and the notary withholds it.

The IRS taxes your worldwide income, so rent and the sale also go on your US return, generally with a credit for the Mexican tax. Property you own directly isn't reported to the IRS, but a Mexican bank account can be.

Predial: the yearly property tax

The base is the cadastral value, which is usually well below market value. In San Miguel, a fiscal value of MXN 2 million means a bill of MXN 5,950, or MXN 5,057.50 if you pay in January. In Huatulco, a 10% municipal surcharge applies unless the home is your own residence.

When you buy, ask the seller for up-to-date predial and water receipts; the notary checks them before signing. Our guide on how to buy property in Mexico as an American shows where that fits in the closing.

Mexico property taxes for Americans who rent

Short-term rentals through platforms

Airbnb and other platforms withhold Mexican taxes from each payout. On MXN 100,000 of lodging income before IVA, here's what is withheld in 2026:

The rule on foreign accounts is new in 2026. The 4% rate on lodging did not change; the increase to 2.5% you may have read about applies to goods and other services.

States add their own taxes. Guanajuato charges a 4% lodging tax that covers houses and apartments, and Oaxaca charges 5% on houses and apartments since January 1, 2026 (3% for hotels). Both states also tax net rental income at 5%. Whether the platform withholding is final for a non-resident, or whether the 25% rule below applies instead, isn't settled in the law, so work with a Mexican accountant (contador).

Long-term rentals

If you're not a Mexican tax resident, 25% of the gross rent is withheld by whoever pays it, with no deductions. If the rent flows through your fideicomiso, the bank withholds. Under Article 6(5) of the US–Mexico tax treaty, a US resident can elect to be taxed on net rent instead, by filing a SAT form and renewing it every January or February.

On IVA, an unfurnished home rented long-term is exempt. Furnished or short-term rentals pay 16%. Rules on permits, condo bylaws and pricing are in renting out your property in Mexico.

Selling: 25% of the price or 35% of the gain

A non-resident seller pays 25% of the gross price with no deductions, or can choose to pay 35% of the gain. The gain is calculated under the rules for residents: you deduct the purchase cost adjusted for inflation, construction and improvements, notary fees and taxes on the purchase, the appraisal and the seller's commission.

In a sale signed before a notary, you don't need a legal representative in Mexico to choose the 35% option. The notary calculates the tax and pays it to SAT. Here's why the choice matters, as an illustration:

The 35% route depends on paperwork: the deed, invoices (CFDI) for fees and improvements, and the appraisal. The sale of a home is exempt from IVA. Guanajuato also charges a 5% state tax on the gain; ask the notary how it applies to a non-resident seller.

One rule hits you as a buyer, too. If SAT's appraisal exceeds the agreed price by more than 10%, the whole difference is treated as income of the foreign buyer and taxed at 25%. That's one more reason to deed the real price.

The exemption for Mexican tax residents

Mexican tax residents can sell their home with up to 700,000 UDIS of the price exempt, about MXN 6.2 million in October 2026 (around USD 336,500), once every three years. Holding a residency card isn't enough. You must prove Mexican tax residency with a residency certificate or tax ID card, an RFC or a CURP, plus a sworn statement, and show the home is yours with documents such as bills in your name at that address.

Do you need a Mexican tax ID (RFC)?

To buy, often not. We found no federal rule that requires a buyer's RFC, and SAT guidance has allowed a generic RFC for buyers who live abroad; your notary will tell you what it needs. To rent or sell, get one. With an RFC, platforms withhold 4% and 8% instead of 20% and 16%, and sellers need one to claim deductions or the residents' exemption.

Applying for an RFC also puts you on SAT's records, with filing duties that a contador can map out for you before the first booking. Timing matters: Mexico's 2027 tax package is expected in the official gazette around November 2026, and platform rates are the kind of figure it can change. Check them again before you set your 2027 prices.

The US side

US citizens and resident aliens report worldwide income. Under the US–Mexico treaty, rent and gains from real property in Mexico may be taxed in Mexico, and the US allows a credit for that tax. In general terms:

• Rental income goes on Schedule E, Part I. If you provide hotel-like services, such as daily cleaning, it moves to Schedule C and self-employment tax can apply. Rent from fewer than 15 days a year isn't reported, and personal use above 14 days or 10% of rental days limits losses.
• Depreciation on a foreign residential rental placed in service after 2017 runs over 30 years, straight line.
• Mexican income tax generally becomes a foreign tax credit on Form 1116; the treaty obliges the US to allow it. Whether the 25%-of-gross tax on a sale is fully creditable in your case is a question for your CPA.
• The sale goes on Form 8949 and Schedule D. The Section 121 exclusion (USD 250,000 single, 500,000 married filing jointly) can apply if you meet the ownership and use tests; applying it to a home in Mexico is the standard professional reading, not explicit IRS text.
• The fideicomiso is not a trust for US tax purposes when the bank only holds title (Revenue Ruling 2013-14). Our fideicomiso guide explains the structure.
• Reporting: property you own directly isn't reported on the FBAR or Form 8938. A Mexican bank account goes on the FBAR once all your foreign accounts exceed USD 10,000 at any time in the year. Owning through a Mexican company can trigger Form 5471.

Keep the paper trail from day one

Both tax systems look back to the day you bought. Keep the deed, the wire confirmations with exchange rates, and every CFDI. Our guide on how to pay for property in Mexico from the US lists what to save at closing. If you're financing, add predial and the trust fee to the monthly payment from our Mexico mortgage calculator to see the real carrying cost.

Casa Mirador in San Miguel sits on 10,222 m² with 1,866 m² built and a rooftop pool facing the churches of the center, priced at MXN 90,000,000 (about USD 4,860,000). Before any offer on a home like this, we get the seller's latest predial receipt so you know the yearly bill.

This guide is general information, not legal or tax advice. Confirm your case with a Mexican notary and a tax advisor, and the US side with a CPA.