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Condo ownership in Cabo San Lucas involves several types of taxes and fees that foreign buyers need to understand before making their investment decision.
The annual property tax rate for residential condos in Cabo San Lucas is typically 0.1% of the assessed value, though foreign owners must also budget for additional costs like fideicomiso fees and HOA charges that can significantly impact total ownership expenses.
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Property taxes on condos in Cabo San Lucas are generally 0.1% of assessed value annually, with most owners paying $100-$400 USD per year.
Foreign buyers face additional annual costs including fideicomiso fees ($500-$1,500) and HOA fees ($1,200-$6,000), making total yearly ownership costs range from $2,000-$6,000 USD for mid-range condos.
| Cost Type | Annual Amount (USD) | Payment Details |
|---|---|---|
| Property Tax (Predial) | $100 - $400 | 0.1% of assessed value, due March 31 |
| Municipal Fees | $150 - $300 | Water, garbage, street lighting |
| Fideicomiso (Bank Trust) | $500 - $1,500 | Required for foreign ownership |
| HOA/Maintenance Fees | $1,200 - $6,000 | Varies widely by property type |
| Total Annual Cost | $1,950 - $6,100 | For mid-range condos |
| Short-term Rental Taxes | Up to 44% of income | 25% income tax + 3% lodging + 16% VAT |
| Early Payment Discount | Up to 20% off | January payments get maximum discount |
What is the current annual property tax rate for residential condos in Cabo San Lucas?
The annual property tax rate for residential condos in Cabo San Lucas is 0.1% of the assessed value (valor catastral) for most properties.
As of September 2025, the standard rate structure shows 1.5331 per 1,000 (0.1533%) for personal residences and 3.0663 per 1,000 (0.3066%) for non-resident or investment properties.
Most foreign condo owners qualify for the lower 0.1% rate regardless of residency status, making this the standard calculation for annual property tax bills in Cabo San Lucas.
The rate applies to the assessed value rather than market value, which typically represents only 10-30% of the actual property worth.
Municipal authorities set these rates annually and they have remained relatively stable over the past several years.
How is the assessed value of a condo calculated and how often is it updated?
The assessed value (cadastral value) is set by the municipal tax office at the time of purchase and typically reflects 10-30% of the actual market value.
Major reassessments occur primarily when the property is sold or transferred, with the new assessed value registered in pesos at the current exchange rate.
Between sales, property values may receive minor yearly adjustments for inflation, but many owners avoid triggering updates unless they report significant renovations or improvements.
The assessed value remains locked at the registered amount until the next major transaction or voluntary update, providing predictable tax calculations for long-term owners.
Property owners can request reassessments if they believe their assessed value is too high, though this process requires documentation and municipal approval.
What would be the annual property tax on condos valued at $150,000, $250,000, and $500,000 USD?
| Market Value (USD) | Typical Assessed Value (30%) | Annual Tax at 0.1% |
|---|---|---|
| $150,000 | $45,000 | $45 |
| $250,000 | $75,000 | $75 |
| $500,000 | $150,000 | $150 |
| $750,000 | $225,000 | $225 |
| $1,000,000 | $300,000 | $300 |
Are there any fixed municipal fees beyond the percentage-based property tax?
Municipal service fees for water, garbage collection, and street lighting are standard additional charges for condo owners in Cabo San Lucas.
These fixed fees typically range from MXN 2,000-5,000 annually ($120-$300 USD) depending on the property size and location within the municipality.
Beachfront and luxury properties may face additional environmental or infrastructure levies imposed by local authorities for coastal protection and premium services.
No large fixed fees exist beyond these standard municipal services, making the property tax and service fees the primary annual municipal obligations.
These fees are billed separately from property taxes and must be paid to maintain municipal services to the property.
What is the typical annual predial bill cost for most condo owners?
Most condo owners in Cabo San Lucas pay between $100-$400 USD annually for their predial (property tax) bill.
The lower end applies to smaller condos with modest assessed values, while larger or more luxurious units approach the higher range.
Properties with significant improvements, premium locations, or higher assessed values may exceed $400 annually, but this represents a minority of condo owners.
These amounts reflect the actual bills received by owners and include both the base property tax and standard municipal service fees.
It's something we develop in our Mexico property pack.
Are there special taxes or levies specifically for foreign condo owners?
Foreigners pay the same property tax rates as Mexican citizens, with no additional tax penalties for foreign ownership of condos in Cabo San Lucas.
The primary extra cost for foreign buyers is the mandatory fideicomiso (bank trust) fee, which is a legal requirement rather than a tax.
This bank trust structure is required for foreign ownership of property within the restricted coastal zone, which includes all of Cabo San Lucas.
No discriminatory tax rates, foreign owner surcharges, or special levies apply to international buyers beyond the standard Mexican tax structure.
The equal treatment under Mexican tax law makes condo ownership costs predictable regardless of the buyer's nationality.
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How much does the annual fideicomiso fee cost and how is it calculated?
The annual fideicomiso (bank trust) fee typically costs $500-$1,500 USD per year for most condo owners in Cabo San Lucas.
This fee is charged by the Mexican bank that holds the trust and varies between financial institutions, with larger banks often charging higher annual fees.
The fee is calculated as a flat yearly charge for trust maintenance and administration, not as a percentage of property value.
Initial setup costs for establishing the fideicomiso range from $1,500-$3,000, separate from the ongoing annual maintenance fees.
Owners can sometimes negotiate these fees or switch banks during trust renewal periods to secure better rates.
Are HOA fees subject to VAT and what is the typical range?
HOA and maintenance fees for condos in Cabo San Lucas typically range from $100-$500 monthly ($1,200-$6,000 annually), with luxury properties commanding higher fees.
Mexican VAT (IVA) at 16% may apply to some maintenance and service fees if the HOA operates as a taxable entity that issues formal invoices.
Most private HOAs handling basic maintenance are not VAT-liable for standard fees, but owners should verify their specific HOA's tax structure.
Beachfront condos and those with extensive amenities like pools, gyms, and security typically fall in the $300-$500 monthly range.
These fees cover building maintenance, security, common area upkeep, and shared utilities for the condominium complex.
When are property taxes paid and what early payment discounts are available?
Property taxes in Cabo San Lucas are paid annually with bills due by March 31st each year.
Early payment discounts are substantial: 20% discount in January, 15% in February, 10% in March, and 5% in April.
After April, the full amount applies with no discounts, making January payments the most cost-effective option for property owners.
Property tax bills are not automatically mailed, so owners must check online or visit municipal offices to obtain their annual statements.
Payment can be made online through the municipal website or in person at designated government offices throughout Los Cabos.
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What penalties apply for late property tax payments?
Late property tax payments incur monthly interest penalties typically ranging from 1-2% per month, plus additional administrative charges.
Interest accumulates continuously until the full balance is paid, making prompt payment essential to avoid escalating costs.
Overdue property tax bills can prevent future sale or transfer of the property title until all outstanding amounts are settled.
The exact penalty rates are set annually by municipal authorities and may vary slightly year to year, but consistently remain in the 1-2% monthly range.
Property owners with unpaid taxes may also face legal action and potential liens against their property for extended non-payment.
What additional taxes apply when renting out the condo short-term?
Short-term rental income in Cabo San Lucas faces multiple tax obligations that can total up to 44% of gross rental income.
Non-resident property owners pay a flat 25% withholding tax (ISR) on gross rental income with no deductions allowed.
Local lodging tax (ISH) applies at 3% of rental income for properties in Baja California Sur, including Cabo San Lucas.
Mexican VAT (IVA) at 16% applies to short-term rental income when rented through agencies or online platforms like Airbnb.
On $20,000 USD annual rental income, total taxes would be approximately: $5,000 (ISR) + $600 (ISH) + $3,200 (VAT) = $8,800 USD.
It's something we develop in our Mexico property pack.
What was the average total yearly ownership cost for a mid-range condo in the past 12 months?
| Cost Category | Low Range (USD) | High Range (USD) |
|---|---|---|
| Property Tax (Predial) | $100 | $300 |
| Municipal Service Fees | $150 | $300 |
| Fideicomiso Fee | $500 | $1,500 |
| HOA/Maintenance | $1,200 | $4,000 |
| Total Annual Cost | $1,950 | $6,100 |
These figures represent actual costs experienced by mid-range condo owners ($250,000-$400,000 value) in Cabo San Lucas during the past 12 months.
Luxury properties with premium amenities and services typically exceed the high range, while basic condos may fall below the low range.
It's something we develop in our Mexico property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Understanding the complete tax structure for condo ownership in Cabo San Lucas helps investors make informed decisions about their property investments.
The combination of low property taxes, manageable annual fees, and substantial early payment discounts makes Cabo San Lucas an attractive destination for international real estate investment.
Sources
- Cabo Properties - Property Taxes in Los Cabos
- Mint Cabo Homes - Annual Property Tax Guide
- Ronival - Baja California Sur Tax Comparison
- Cabo Real Estate Services - Annual Property Taxes
- The Latin Investor - Property Taxes Mexico
- Cabo Real Estate Services - Property Tax Information
- Baja Properties - Buying in Cabo San Lucas
- The Latin Investor - How to Buy House Cabo San Lucas
- Beach Please Mexico - Taxes in Mexico
- The Agency Baja - Paying Property Taxes