Understanding Taxes Before You Sign in Mexico
Buying property in the Riviera Maya is one of the smartest investment moves you can make in 2026. But before closing the deal, there's a component many foreign buyers underestimate: taxes and closing costs. They're not a barrier, but they're real — and understanding them prevents unpleasant surprises.
ISAI: The Main Tax for the Buyer
The Impuesto Sobre Adquisición de Inmuebles (ISAI) — Property Acquisition Tax — is the main tax paid by the buyer. It's a state-level tax, so the rate varies by location. In Quintana Roo, where Cancún, Playa del Carmen, Tulum and Puerto Morelos are located, the ISAI rate is approximately 3% of the deed value. It's paid once at signing before a notary.
ISR (Income Tax): What the Seller Pays — and Why It Matters to You
The seller pays ISR on the capital gain from the sale. The notary is legally required to withhold this tax and remit it to the tax authority (SAT). This is relevant for you as a buyer because unresolved tax issues on the seller's side can complicate or delay the deed process. Always work with legal advisors who verify the seller's tax standing beforehand.
When you eventually sell, as a non-resident foreigner you'll face a retention of 25% on gross income or 35% on net gain. With Mexican tax residency, you may qualify for an exemption of up to approximately USD 250,000 on a primary residence.
VAT at the Notary: When It Applies
The 16% VAT applies to notary fees and professional services, but not to the property price itself for residential use. If the property is commercial or operates under a rental scheme, VAT may apply differently. Your notary will clarify this before signing.
Total Closing Costs: What to Budget
Closing costs in Quintana Roo typically range from 4.5% to 6% of the property value, including ISAI, notary fees, public registry fees, and administrative costs. On a USD 200,000 property, expect to add USD 9,000–12,000 in closing costs.
Deductible Expenses: Lower Your Future Tax Base
Mexico allows you to deduct closing costs and capital improvements when calculating the taxable gain on a future sale. Keep all your invoices (CFDIs) — renovations, major maintenance, furnishings — to legally reduce your tax exposure when you sell.
Annual Property Tax (Predial)
Once you own the property, the annual predial is remarkably low by international standards. A USD 300,000 property in Quintana Roo typically carries an annual predial of just USD 300–800.
Frequently Asked Questions
Do foreigners pay higher taxes than Mexican citizens?
No. ISAI and closing costs are the same for both. The difference appears at resale, where ISR treatment varies based on the seller's tax residency.
Can I deduct my Mexican property purchase on my U.S. taxes?
Consult an international tax accountant. Generally, closing costs add to your cost basis and reduce taxable gain when you sell.
Does owning through a trust (fideicomiso) change my tax situation?
No. The same taxes apply regardless of whether you own directly or through a trust.
Is there inheritance tax in Mexico?
Mexico has no federal inheritance tax. However, your home country may tax inherited foreign assets — seek professional advice.
At L'Agence MX we guide you through every step. Email us at bonjour@lagencemx.com, reach us on WhatsApp at +52 56 3370 9470 or explore all our properties at lagencemx.com.
Why L'Agence
Over 10 years in the Riviera Maya
SEDETUS · AMPI certified trilingual team operating in Cancún, Tulum, Playa del Carmen, Puerto Morelos, Puerto Aventuras and Bacalar. We accompany international investors from search to closing and ongoing property management.
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