There is no single percentage for every sale
Selling real estate in Mexico does not automatically mean applying one fixed rate to the sale price. The result depends on the type and use of the property, the seller, the time since acquisition and the records available to support cost, improvements and related expenses.
A transaction may involve income tax on the gain, VAT when no exemption applies and local contributions. Appraisals, certificates, professional services and notarial costs are not always taxes, but they reduce net proceeds. This guide is general information and does not replace a notary's calculation or transaction-specific tax advice.
Income tax: the seller's primary tax consideration
For an individual, Mexican income tax generally begins with the taxable gain rather than the entire selling price. Two properties sold for the same amount may produce different results because of documented acquisition cost, holding period, qualifying additions, notarial expenses, appraisals and commissions.
- Deed or document establishing acquisition cost and date.
- Invoices for qualifying construction, additions and improvements.
- Appraisal, notarial and real estate commission records.
- Taxes and duties paid in connection with acquisition or sale.
- Co-owner details and ownership percentages.
Principal-residence exemption and key evidence
Mexican law provides a principal-residence exemption when use, amount, formalization and timing requirements are satisfied. The threshold is expressed in UDIs, whose value changes, so the relevant-date conversion should be used instead of a permanent peso amount.
Owning a home is not enough by itself. The notary reviews address evidence, prior exemptions and transaction conditions. When the price exceeds the threshold or evidence does not satisfy every requirement, part of the gain may remain taxable.
| Item | When it may apply | General basis | Key evidence |
|---|---|---|---|
| Income tax on sale | When a taxable gain exists and no full exemption applies | Statutory taxable gain | Acquisition deed and deduction records |
| Principal-residence exemption | If amount, use, formality and timing tests are met | Up to the UDI-denominated legal limit | Address evidence and notarial declaration |
| VAT | For buildings or uses outside an exemption | Value of the taxable portion | Deed, appraisal and use evidence |
| State or local contribution | When the jurisdiction imposes one | Current state or local legislation | Notarial or authority calculation |
| Closing costs | During preparation and formalization | Certificates, appraisals and contracted services | Itemized notarial estimate |
VAT, land and non-residential use
Mexican VAT law treats land, residential buildings and non-residential construction differently. A home, shop, warehouse, mixed-use property or building used for lodging should not be analyzed as the same transaction. When only part of a property is residential, values and supporting evidence may need to be separated.
The seller should also confirm whether the state imposes a local contribution related to the transfer. The notary and tax advisor need to review the property, documented use, seller profile and rules in effect on the closing date.
The notary's role and the seller's preparation
For a sale completed through a public deed, the notary reviews the file and performs the calculations and remittances required for that transaction. The seller should request a preliminary estimate, confirm acceptable evidence and separate taxes, professional fees, certificates, outstanding balances and expected net proceeds.
Co-ownership, marital property, inheritance, foreign tax residence or construction completed after the land purchase deserve specific review. An owner can book a tax consultation with Fintax to organize the records before committing to a price and closing date.
Checklist before accepting an offer
- Locate the deed, acquisition date and every ownership percentage.
- Gather invoices for additions, improvements, appraisals and commissions.
- Check property tax, utilities, liens and outstanding fees.
- Prepare principal-residence evidence if claiming the exemption.
- Request an estimate of net proceeds before signing a purchase promise.
- Separate taxes from notarial and professional-service costs.
- Seek specialist review when use, ownership or tax residence is unusual.
Official sources to verify
- Mexican Tax Administration: property-sale tax regime — Official reference on income from disposing of property and the taxpayer's general obligations.
- Fintax: accounting and tax consultation — A service for reviewing a specific tax situation with documentation and professional support.
- FOVISSSTE: formalizing a home purchase through a deed — Summarizes the role of the deed, notary and public-record registration.
