Owning property in Mexico involves two taxes that matter over the life of an investment: predial, the modest annual property tax, and income tax on the gain when you sell. The second is where foreign owners are most often surprised. The capital gains tax a Mexico non-resident pays depends on a choice between a tax on the gross price and a tax on the net gain, and on paperwork kept from the day you buy. This guide explains both taxes as they apply in 2026. For the full buying process, see our guide to buying property in Mexico as a foreigner.
Predial: what it is and how it is set in Quintana Roo
Predial is a municipal tax. Each municipality sets its own base, rates and payment calendar through its tax law, so the rules in Cancún (Benito Juárez) differ from those in Tulum, Playa del Carmen or Bacalar.
How Benito Juárez calculates it
Under Article 12 of the Ley de Hacienda del Municipio de Benito Juárez, the base is the highest of several values: the cadastral value, a bank appraisal, the value in the last sale, the agreed price in a transfer, the last value the owner declared, or the rent the property produces or could produce. Buying a property therefore tends to bring its predial base up to the price you paid. The same law notes that paying in advance does not prevent the treasury from charging the difference if the base changes, for instance after a sale is registered.
Early-payment discounts in Cancún, 2026
Benito Juárez rewards paying the year's predial early. For 2026 the city council approved the following schedule, as reported by El Heraldo de México Quintana Roo and Cancuníssimo:
| Payment window (2026) | Discount |
|---|---|
| 7 to 21 January | 15% |
| 22 January to 15 February | 10% |
| 16 February to 15 March | 5% |
The municipality also announced a 50% discount throughout 2026 for older adults holding an INAPAM card, on residential property. Discounts are approved each year, so expect the 2027 calendar around the turn of the year.
Two practical points. Keep the receipts: the same municipal law asks for a copy of the current predial receipt when a property is sold. And if you live abroad, set up online payment or ask your property manager to pay in January; arrears accrue surcharges that will have to be cleared before any sale.
Capital gains tax in Mexico for non-residents: 25% of gross
When a foreign owner who is not a Mexican tax resident sells real estate located in Mexico, the income is Mexican-source and taxed under Article 160 of the Ley del Impuesto sobre la Renta (LISR). The default rule is blunt: 25% of the total sale price, with no deductions at all. The SAT describes it the same way.
Under that article, the buyer withholds the tax if the buyer is a Mexican resident, or a foreigner with a permanent establishment in Mexico. Otherwise, the seller pays it by filing a return within 15 days of receiving the income.
Because the base is the gross price, the 25% rule ignores what you paid. On a property bought for MX$7 million and sold for MX$8 million, it would take MX$2 million, twice the actual gain. This is why most sellers look closely at the alternative.
The net-gain option and its requirements
Article 160 allows a non-resident to pay instead at the top individual rate in the LISR rate table, currently 35%, on the net gain. The gain is calculated under the rules that apply to individuals in Mexico, without deducting the losses mentioned in Article 121.
Conditions
- A public deed. The option applies when the sale is formalised in an escritura pública (or concerns non-amortisable real-estate participation certificates).
- A representative, unless the sale is notarised. The article refers to a representative in Mexico meeting the requirements of LISR Article 174. The SAT explains that the representative must be resident in Mexico (or a foreigner with a permanent establishment) and must keep the related documents for five years. However, the current text of Article 160 adds that a representative is not required when the sale is recorded in a public deed. Older SAT guidance still describes the representative, so confirm what your notary will ask for.
- Proof of every deduction. The representative or the seller gives the notary the deductions to which the seller is entitled.
What you may deduct
According to the SAT, the gain is the sale price less:
- the documented acquisition cost, adjusted for inflation;
- investments in construction, improvements and extensions, adjusted for inflation;
- notarial fees, taxes and duties on the purchase and sale deeds;
- appraisal fees;
- commissions paid by the seller on the sale.
The adjustment follows LISR Article 124. The cost of the land is separated from the cost of construction; if they cannot be separated, land is taken as 20% of the total. Construction cost is reduced by 3% for each year held, never below 20% of the original cost, and then indexed to inflation. Land is not depreciated, only indexed.
When the net option wins
A little algebra makes the choice clear. Paying 35% on the gain costs less than 25% on the price whenever your documented deductions exceed about 28.6% of the sale price (because 0.35 × (price − deductions) < 0.25 × price when deductions > 0.2857 × price). For most owners selling at a moderate profit, that threshold is easily met, provided the paperwork exists.
The resident home-sale exemption
Owners who are Mexican tax residents are taxed differently, and can benefit from a significant exemption for their own home. Under LISR Article 93, fraction XIX(a), the gain on the sale of the taxpayer's casa habitación is exempt when the sale price does not exceed 700,000 UDIs and the sale is formalised before a notary.
The UDI is an inflation-indexed unit published by the Banco de México. On 9 October 2026 one UDI was worth MX$8.851528, so the limit was 700,000 × 8.851528 ≈ MX$6.20 million. Above the limit, only the excess is taxed, with deductions applied in proportion.
Conditions
- The seller is an individual and a Mexican tax resident. Non-residents cannot use the exemption; see our guide to residency for property owners on how tax residency is decided.
- The property is genuinely the seller's home. The regulations (RLISR Art. 155) accept documents such as electricity or telephone bills and bank or credit statements showing the property's address, in the name of the seller, their spouse, or their direct ascendants or descendants.
- The seller has not used the exemption on another home in the three years before the sale and declares this to the notary under oath. The notary also checks SAT's records.
For a tax resident who does not qualify, or for the part above the limit, the gain is taxed at progressive rates after being divided by the years held (up to 20), under LISR Articles 120 and 126.
Who calculates the tax at sale
In a sale formalised by deed, the notario público sits at the centre. For residents, LISR Article 126 requires notaries to calculate the provisional tax under their own responsibility, pay it within 15 days of signing, and give the seller the calculation and a tax receipt. For non-residents choosing the net option, Article 160 likewise makes the notary calculate the tax, state it in the deed and pay it within 15 days of signing.
Two further details are worth knowing. If the agreed payment is spread over more than 18 months in a deed, a non-resident may pay the tax as each instalment falls due, provided the tax is guaranteed. And if you hold through a bank trust, selling generally means transferring your rights as beneficiary, which the LISR treats like a sale of the property itself; see our fideicomiso guide.
Ask the notary, before you sign the promissory contract, how the tax will be calculated on your sale, which documents they need and what they will withhold from the proceeds.
Planning your exit
Capital gains tax is decided largely at the purchase, not the sale. A few habits protect your return:
- Keep the purchase deed and every invoice. Deductions must be documented, and Mexican tax invoices (CFDI) are the safest proof for improvements. If you buy in pre-sale, such as Casa Selva Alta in Tulum, keep the receipts for each payment and the delivery documents.
- Record the land and construction split. Land is indexed but not depreciated, which favours land-heavy holdings at exit. A titled land holding such as Bacalar para Visionarios or the commercial lots on Av. Kantenah keeps its full indexed cost; a house loses part of its construction cost each year.
- Decide your tax residency early. The home-sale exemption depends on being a Mexican tax resident and proving the property is your home. That evidence takes time to build.
- Keep predial current. A sale needs the current receipt, and arrears carry surcharges. For a Cancún lot such as Cascada 14 in Vía Cumbres, paying in January also earns the largest discount.
- Coordinate with your home country. Your country of residence may also tax the gain and may give credit for Mexican tax under a treaty. An adviser who works on both sides is worth engaging before you list.
Transfer taxes on the purchase side fall on the buyer and are covered in our guide to closing costs in Quintana Roo. None of this replaces advice from a notario público or an independent tax adviser on your own facts.
Questions investors ask
How much capital gains tax does a non-resident pay on a Mexican property sale?
By default, 25% of the total sale price with no deductions (LISR Art. 160). Alternatively, if the sale is formalised in a public deed, the seller can opt to pay 35% on the net gain after documented costs.
When is the 35% net-gain option better than 25% of gross?
Whenever your documented, inflation-adjusted deductions exceed about 28.6% of the sale price. Below that, 25% of the gross price costs less.
Do I need a representative in Mexico to use the net-gain option?
Article 160 refers to a representative meeting LISR Article 174, but its current text says a representative is not required when the sale is recorded in a public deed. Older SAT guidance still describes the representative, so confirm with your notary.
Can a foreigner use the 700,000-UDI home-sale exemption?
Only if they are a Mexican tax resident selling their own home before a notary, have not used the exemption in the previous three years, and can document that the property is their home. In October 2026 the limit was about MX$6.2 million.
Who calculates and pays the tax when I sell?
In a sale formalised by deed, the notario público calculates the tax, records it in the deed and pays it within 15 days of signing, then gives the seller the calculation and a tax receipt.
How can I reduce predial in Cancún?
Pay the annual amount early. For 2026, Benito Juárez offered 15% off from 7 to 21 January, 10% to 15 February and 5% to 15 March, plus 50% for older adults with an INAPAM card on residential property.
Sources
- Ley de Hacienda del Municipio de Benito Juárez (Congreso de Quintana Roo)
- Lista de precios y descuentos por el pago anticipado del predial 2026 en Cancún (El Heraldo de México Quintana Roo)
- Todo listo para pago de predial 2026 (Cancuníssimo)
- Ley del Impuesto sobre la Renta, Art. 160 (LeyesMX)
- Ley del Impuesto sobre la Renta (Cámara de Diputados)
- Venta de bienes inmuebles por residentes en el extranjero (SAT)
- Ley del Impuesto sobre la Renta, Art. 124 (LeyesMX)
- Ley del Impuesto sobre la Renta, Art. 93 (LeyesMX)
- Ley del Impuesto sobre la Renta, Art. 120 (LeyesMX)
- Ley del Impuesto sobre la Renta, Art. 126 (LeyesMX)
- Enajenación de casa habitación: RLISR Art. 155 (Contadigital)
- Capital Gains Tax on the sale of homes in Mexico (Connell & Associates)
- Valor de la UDI (Banco de México)
This guide is general information, current as of October 2026, and is not legal or tax advice. Laws, rates and thresholds change; confirm every figure with a notario público or an independent Mexican attorney before you act.