Guide · Foreign buyers

Selling Mexican property as a non-resident: the tax

How federal income tax works when a non-resident sells a home in Mexico: 25% of the gross price or the 35% top rate on the gain, who withholds it and when.

Checked on against the official sources at the bottom of the page.

In short

When a person who is not a Mexican tax resident sells a house, condo or lot located in Mexico, the income is taxed in Mexico, because the property is there (Income Tax Law, Ley del Impuesto sobre la Renta, LISR, art. 160). The default rule is 25% of the total sale price, with no deduction. The seller may instead opt for the top rate of the annual income tax table on the gain only, which is 35.00% in 2026. These are federal rules that apply in every state; the state-level 5% payment on the gain is covered separately. The tax is calculated and paid by the notary at the signing.

Who counts as a non-resident

Residence for tax purposes is not decided by citizenship, a visa or a property title. The Federal Tax Code (Código Fiscal de la Federación, CFF, art. 9) treats an individual as resident in Mexico if the person has set up a home (casa habitación) in Mexico. If the person also has a home in another country, the person is resident in Mexico only when Mexico holds the “centre of vital interests”, which the Code presumes, among other cases, when more than 50% of the year’s total income has a Mexican source or when the main centre of professional activities is in Mexico. A Mexican national is presumed resident unless proved otherwise.

This matters because the two sale regimes differ sharply. A resident is taxed on the gain (see capital gains tax on property in Mexico) and may qualify for the main-home exemption (home sale exemption). A non-resident follows article 160, described below.

Option 1: 25% of the gross price

Article 160 says that tax is determined by applying a 25% rate to the total income obtained, without any deduction. The buyer withholds it if the buyer is a Mexican resident (or a foreign resident with a permanent establishment in Mexico). If neither applies, the seller files and pays within fifteen days of receiving the income.

In practice, when the sale is made by public deed (escritura pública, the notarised deed signed before a notario público, a state-appointed notary and senior lawyer), the notary does the calculation. Rule 3.15.16 of the 2026 Miscellaneous Tax Resolution (RMF) says notaries pay the definitive tax on sales by non-residents with form R17, “ISR otras retenciones”.

Worked as a formula, not a quote: tax = 0.25 x gross price. The cost of the property, improvements, notary fees and agent commissions play no part in this option.

Option 2: the top rate on the gain

The same article lets a seller who has a representative in Mexico opt to apply to the gain the maximum rate of the table in article 152. Two conditions are written into the law:

  1. The sale must be recorded in a public deed (or concern non-amortisable real estate participation certificates).
  2. The representative must meet article 174: be resident in Mexico or a foreign resident with a permanent establishment there, keep the supporting papers for five years, accept joint liability voluntarily and hold enough assets to answer for it.

Article 160 adds that for sales recorded in a public deed no representative in the country is required to use the option. The seller (or the representative) must tell the notary the deductions the seller is entitled to.

The gain is computed with the resident rules of Chapter IV of Title IV: the sale price minus the adjusted cost of the property, improvements, notary taxes and fees and agent commissions (arts. 121 and 124, explained in the guide on capital gains). The law excludes the loss deduction of the last paragraph of article 121.

The top marginal rate in the 2026 annual table (RMF 2026, Annex 8) is 35.00%, which applies above MX$5,107,703.93 of taxable income. The text of article 160 refers to “the maximum rate” and does not itself print 35%.

A comparison, written as a formula: option 2 is cheaper when 0.35 x gain is less than 0.25 x price, that is, when the gain is below about 71% of the price. That is arithmetic on the two rates, not advice; the choice and its paperwork belong to the seller and the notary.

Payment, timing and instalments

  • The notary states the tax in the deed and pays it within fifteen days of the signing, and files a return even when no tax is due under the option.
  • If the price is paid in instalments over more than 18 months, the tax may be paid as each payment falls due, provided the tax authority’s interest is secured (art. 160).

Why the main-home exemption rarely helps a non-resident

The exemption for a seller’s home up to 700,000 UDIS applies to Mexican tax residents. RMF rule 3.11.3 says that a foreign national who sells a home is presumed resident only after declaring tax residence in the deed and proving it with a tax residence certificate (rule 2.1.3) or the tax identification card. Otherwise the exemption “will not apply” and the notary calculates the tax under article 160. See notary tax withholding on a sale.

Tax treaties

Mexico has income tax treaties with, among others, the United States. Article 13 of the 1992 US-Mexico convention allows gains from immovable property to be taxed in the state where it is situated, and extends this to interests in trusts to the extent their assets are Mexican real estate, and to any right allowing use or enjoyment of such property. This guide does not cover the tax in the seller’s country of residence; consult that country’s tax authority.

What it costs

There is no fixed fee for this tax: it is 25% of the price or 35% of the gain, as above. Other seller’s costs are the notary’s fees and local taxes set by each state, and any agent’s commission. For the selling costs generally, see selling a home in Mexico: costs.

Which professional to consult

  • A notary (notario público), who calculates and pays the tax and records the deed: notary page.
  • A tax adviser or accountant, for the choice between the two options and the home-country side. Tax advisers are not covered by a Payotte profession page.
  • A real estate lawyer for the representative’s appointment and the powers of attorney: real estate lawyer page.

Frequently asked questions

Is the 25% charged on the profit?

No. By default it is charged on the total price with no deduction (LISR art. 160). Only the optional method taxes the gain.

Do I need a representative in Mexico?

For a sale recorded in a public deed, the law says a representative is not required to use the gain-based option. Otherwise the representative must meet article 174.

Who pays the tax, me or the buyer?

Economically it comes out of the seller’s proceeds. The buyer withholds it if resident in Mexico; the notary calculates it and files it within fifteen days of the deed.

Can I be treated as a resident to avoid the 25%?

Only if you really are a tax resident under CFF art. 9 and can prove it; the RMF requires a declaration in the deed and an official certificate.

Does the rule change by state?

The income tax rule is federal. States set their own notary fees, registration fees and acquisition tax, which differ by state and municipality.

More guides on foreign buyers

Sources

All guides · Payotte Mexico