Mexico's main-home sale exemption: 700,000 UDIS

The rule in the law

Article 93 of the Income Tax Law (LISR) lists income that is not taxed. Fraction XIX a) covers the sale of “the taxpayer’s casa habitación” (the home where the taxpayer lives) when two conditions are met: the consideration obtained does not exceed 700,000 unidades de inversión (UDIS), and the transfer is formalised before a fedatario público (a notary or other public official with notarial functions).

Three further features follow from the text:

• The ceiling is on the price, not on the gain. If the price is above 700,000 UDIS, the gain is calculated on the excess, using the deductions “in the proportion that results from dividing the excess by the consideration”. The notary calculates and pays the provisional tax on that part.
• Once every three years. The exemption applies only if, in the three years before the sale, the seller did not sell another home with the same exemption, and states this under oath (bajo protesta de decir verdad) before the notary.
• The notary checks. The notary must consult the tax authority (SAT) through its website to see whether the seller already sold an exempt home, and report the new sale, giving the amount and any tax withheld.

What the UDI is

The UDI (unidad de inversión) is a unit of account whose peso value is published by the central bank, Banxico. Its value changes daily with inflation. Banxico publishes the values ahead of time; the Diario Oficial de la Federación lists them day by day and gives 8.856094 for 15 October 2026 (Banxico’s table CP150 shows the same series). On the 15 October 2026 value:

700,000 x 8.856094 = MX$6,199,266 (calculation of 15 October 2026).

The ceiling should be recalculated with the UDI value on the date of the sale. Because the UDI rises over time, the peso ceiling rises too.

Which home qualifies

The text says “casa habitación del contribuyente”, the taxpayer’s own home. The law read does not define in detail what proof of occupation the notary asks for; the notary applies the SAT rules. A second home, a rental property or a lot is not covered by the wording of the exemption.

A discrepancy to know about

The paragraph of article 93-XIX-a that tells the notary to consult the SAT speaks of five years, while the paragraph setting the condition speaks of three years. The 2026 Miscellaneous Tax Resolution (rule 3.11.4) fixes the notary’s check at the three years before the sale. This guide follows the three-year rule, which is the condition stated first in the law and in the rule.

Foreign owners: the proof of tax residence

The exemption is for Mexican tax residents. For a foreign national, RMF rule 3.11.3 sets out how residence is presumed, unless there is proof to the contrary. The seller must:

1. Declare under oath, in the deed, that they are a tax resident in Mexico under Federal Tax Code art. 9 (and any applicable treaty).
2. Give a tax address or an address for notices, which may never be the home being sold.
3. Give their RFC (tax ID) or, failing that, their CURP (population ID).
4. Prove residence with the tax-residence certificate (constancia de residencia para efectos fiscales, rule 2.1.3) or, failing that, the tax identification card (rule 2.4.9). These documents go into the notary’s file attached to the deed.

If the foreign seller is not a tax resident, the exemption “will not apply” and the notary calculates and pays tax under art. 160, which is 25% of the gross price by default (selling as a non-resident). When the conditions above are met, the rule says notaries are not jointly liable with the taxpayer unless there is proof to the contrary.

Under CFF art. 9, a person is generally a resident if they have set up a home in Mexico, with a test of the centre of vital interests if they have homes in two countries. The rule asks for a tax-residence declaration and certificate, not only an immigration document.

What happens above the ceiling

For a price over the ceiling the sale is partly taxable. The gain follows the standard method (capital gains tax), with deductions scaled by the share of the excess in the price. The separate 5% payment to the state is described in state tax on property gains; article 127 does not say how it applies to a partly exempt sale, so ask the notary.

Which professional to consult

• A notary, who takes the oath, queries the SAT and files the return: notary page.
• A tax accountant, for the residence certificate (obtained from the SAT) and the annual return.