Property Taxes in Mexico
What are property taxes in Mexico?
There are two main types of property tax for home buyers to consider in Mexico. The first is an acquisition tax that is generally 2-5% of the sale amount, levied when you purchase a home.
The other type of property tax in Mexico is paid annually, also known as predial taxes or impuestos prediales. According to Mexico’s Federal Tax Code, property taxes in Mexico are generally levied at a rate of 0.25% to 2% of the assessed property value. These taxes are collected by the municipal government and are used to fund various public services, such as road maintenance, trash collection, and public safety. These annual taxes are quite low in Mexico where it’s common to pay only 1-$500 per year depending on the characteristics of your property.
In Mexico, property taxes are calculated based on the assessed value of the property. This value is determined by the municipal government and is based on factors such as the size of the property, the location, and the type of property. Generally, the higher the assessed value of the property, the higher the property taxes will be.
Property taxes in Mexico are typically paid annually, although some municipalities may offer the option to pay in installments. Property owners are responsible for ensuring that their taxes are paid on time, as failure to pay can result in penalties and interest charges.
It is important to note that property taxes in Mexico are not based on the income or financial status of the property owner. Even if the property is not generating any income, property owners are still required to pay property taxes based on the assessed value of the property.
In addition to predial taxes, property owners in Mexico may also be required to pay other types of taxes, such as capital gains taxes or transfer taxes, when buying or selling property. These taxes are separate from predial taxes and may vary depending on the location and value of the property.
What is the Average property taxes paid in Mexico?
Property taxes vary by state in Mexico but can range anywhere from 2-5% at the point of sale, but only 0.25% up to 2% of the property value per year for annual Mexican predial property taxes.
To calculate the amount of property taxes owed, property owners in Mexico can consult their property tax bill, which will be sent to their Mexico address or contact their municipal government. Our local agents can also help you estimate your bill, if you have questions. It is also recommended that property owners keep records of their property tax payments for future reference.
Overall, property taxes are an important aspect of real estate ownership in Mexico. By paying these taxes, property owners are contributing to the upkeep and maintenance of their local community, while also fulfilling their obligations as responsible property owners. If you have any questions about buying in Mexico as a foreigner, fill out the form below.