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SUMMARY
Property taxes and fees in Cabo San Lucas are a tale of two very different numbers: annual predial is extremely low, while a foreign buyer should usually budget roughly 5% to 8% of the purchase value for the full closing stack.
The low annual tax is real, not a marketing trick. A qualifying owner-occupied urban home is taxed at 0.115331% of cadastral value, so even a MXN 20 million cadastral value produces annual predial of only about MXN 23,066 before any early-payment discount.
How the property is used changes the picture quickly. Residential rentals are taxed at about twice the owner-occupied rate, while vacant urban land can start around 0.61326% and rise over time to a maximum of 1.22652%.
The tax base also matters. Predial is calculated from cadastral value, which should not be casually treated as the same thing as the purchase price, while the acquisition tax looks to the highest relevant transaction, fiscal, cadastral or appraised value.
The big buyer-side tax is ISABI. Los Cabos now applies a 3% acquisition-tax rate after a fixed five-annual-UMA deduction, which means the effective rate gets very close to 3% as the property value rises.
That one change makes older claims of 3% or 4% total Cabo closing costs increasingly hard to believe. Registry charges, notarial remuneration, appraisal work, certificates and foreign-buyer trust costs still have to be added after ISABI.
Foreigners do not pay a higher annual predial simply because they are foreign. The extra cost comes from the fideicomiso structure normally used for residential property inside Mexico's coastal restricted zone, including a federal permit, bank setup work and an annual trustee fee.
For many condo owners, HOA dues matter far more than predial. A USD 500 monthly HOA means USD 6,000 a year, which can dwarf the municipal property-tax bill; unusually low HOA dues can also be a warning sign if reserves are weak or major repairs are being deferred.
Cheaper Cabo properties can carry a slightly worse closing-cost percentage because several expenses are fixed or semi-fixed. The reverse happens at the high end: the peso bill is bigger, but the total cost often compresses as a percentage of the purchase.
The practical takeaway is that predial is rarely the cost that changes the economics of a Cabo purchase. The numbers worth modeling closely are the roughly 3% acquisition tax, the rest of the closing stack, the fideicomiso where applicable, the HOA or resort fee, and the seller-side tax exposure when the property is eventually resold.
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Are property taxes in Cabo San Lucas actually low?
Cabo San Lucas property taxes are still remarkably low, especially on a home occupied by its owner.
Cabo San Lucas falls under the Municipality of Los Cabos, where the annual impuesto predial is calculated from the property's cadastral value. For an urban property used exclusively as the owner's home, the municipal rate is 1.15331 per thousand, or 0.115331%.
That percentage already looks small, and the tax base makes the bill even lighter. Cadastral value is the number registered for municipal tax purposes, so it should not automatically be confused with the asking price or the amount a buyer just paid.
At a cadastral value of MXN 10 million, the standard annual predial at the owner-occupied residential rate comes to about MXN 11,533. At MXN 20 million, it is roughly MXN 23,066.
For context, a 1% annual property tax on a MXN 20 million base would cost MXN 200,000. Cabo's owner-occupied rate produces a bill of roughly one-ninth of that amount. That is genuinely cheap.
| Cadastral value | Cabo residential rate | Annual predial | Monthly equivalent |
|---|---|---|---|
| MXN 5 million | 0.115331% | MXN 5,767 | MXN 481 |
| MXN 10 million | 0.115331% | MXN 11,533 | MXN 961 |
| MXN 20 million | 0.115331% | MXN 23,066 | MXN 1,922 |
| MXN 40 million | 0.115331% | MXN 46,132 | MXN 3,844 |
Does Cabo San Lucas charge more property tax on a rental?
Yes. A residential rental in Cabo San Lucas currently faces almost twice the predial rate of a qualifying owner-occupied home.
Los Cabos applies a rate of 2.2997 per thousand, or 0.22997%, to properties used for residential rentals and to mixed-use properties. The owner-occupied residential rate is 1.15331 per thousand.
On MXN 10 million of cadastral value, that gives us annual predial of roughly MXN 22,997 for a rental, compared with MXN 11,533 for an owner-occupied residence. At MXN 20 million, the figures move to about MXN 45,994 and MXN 23,066.
The difference is real, but predial remains a fairly small operating expense for most Cabo rental properties. Once HOA dues, management, repairs, insurance and utilities enter the calculation, property tax usually moves well down the list.
| Cadastral value | Owner-occupied home | Residential rental | Extra annual tax |
|---|---|---|---|
| MXN 5 million | MXN 5,767 | MXN 11,499 | MXN 5,732 |
| MXN 10 million | MXN 11,533 | MXN 22,997 | MXN 11,464 |
| MXN 20 million | MXN 23,066 | MXN 45,994 | MXN 22,928 |
| MXN 40 million | MXN 46,132 | MXN 91,988 | MXN 45,856 |
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Is vacant land in Cabo San Lucas taxed much more heavily?
Yes. Holding an empty Cabo lot can produce a far higher property-tax bill than owning a finished home with the same cadastral value.
Ordinary unbuilt or vacant urban property is taxed at 6.1326 per thousand, equivalent to 0.61326%. The Los Cabos Treasury Law then adds 0.6132 per thousand for each year that the property remains undeveloped, with the total rate capped at 12.2652 per thousand, or 1.22652%.
There are exceptions. Certain undeveloped lots inside legally authorised developments can qualify for a 3.0663-per-thousand treatment while the statutory conditions continue to be met.
Still, the contrast is large. A MXN 10 million vacant property taxed initially at 0.61326% produces about MXN 61,326 a year. At the maximum rate, the annual bill reaches roughly MXN 122,652. The same cadastral value used as the owner's home produces only about MXN 11,533.
Anyone buying Cabo land to sit on it for years should therefore model predial separately from the finished-home rates commonly quoted in property guides.
Can Cabo homeowners still get an early-payment property-tax discount?
Yes. Los Cabos offered a meaningful early-payment discount again this year, although the best window has already passed.
The municipality gave taxpayers a 20% reduction on the annual predial bill when it was paid in either of the first two months of the year, followed by a 10% reduction in the third month. That was slightly more generous than the previous year's schedule because the 20% rate was extended through the second month instead of dropping to 15%.
The change is useful evidence that early-payment incentives remain part of the normal Los Cabos tax system rather than a one-off promotion.
For a qualifying home with a MXN 10 million cadastral value, a MXN 11,533 annual predial bill would have fallen to roughly MXN 9,227 under the 20% discount. A rental property with a normal bill of MXN 22,997 would have saved about MXN 4,599.
The saving is welcome, although the bigger lesson remains the size of the underlying tax: even before the discount, Cabo predial is unusually light.
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What is the biggest tax when buying property in Cabo San Lucas?
The 3% ISABI acquisition tax is now the big unavoidable buyer-side tax in Cabo San Lucas.
Los Cabos increased its Impuesto Sobre Adquisición de Bienes Inmuebles from 2% to 3% in 2025. The rest of Baja California Sur later moved to the same rate, so the entire state now uses 3%.
For Cabo buyers, the important change happened when Los Cabos itself went from 2% to 3%. A one-point increase adds roughly MXN 200,000 on a MXN 20 million tax base before taking the statutory deduction into account. At MXN 40 million, the difference is roughly MXN 400,000.
ISABI also explains why old articles about 3% or 4% total Cabo closing costs are increasingly unreliable. If one mandatory tax by itself now consumes almost 3% of the property's taxable value, the full closing bill cannot realistically sit much above that number after adding the notary, registry, trust and administrative work.
This is the recent tax change we would pay the most attention to when using older Cabo buying guides.
Is Cabo's 3% acquisition tax really charged on the full purchase price?
Usually almost, but not exactly. Cabo's ISABI formula gives buyers a fixed deduction before the 3% rate is applied.
The Los Cabos Treasury Law allows five annual UMA to be deducted from the property's taxable value. The current annual UMA is MXN 42,794.64, so the deduction works out to MXN 213,973.20.
A MXN 10 million taxable property therefore produces an ISABI calculation on roughly MXN 9.786 million, leaving tax of about MXN 293,581. That is an effective rate of 2.936% rather than exactly 3%.
The deduction matters progressively less as prices rise. At MXN 40 million, the effective rate is already about 2.984%.
There is another detail buyers should understand: the relevant value is not necessarily whichever figure is most convenient in the purchase agreement. Los Cabos rules look to the highest applicable value among the agreed consideration, fiscal or cadastral value and commercial appraisal. Putting an artificially low number in the contract therefore does not create an easy route around the tax.
| Taxable property value | Deduction | Approx. ISABI | Effective rate |
|---|---|---|---|
| MXN 5 million | MXN 213,973 | MXN 143,581 | 2.872% |
| MXN 10 million | MXN 213,973 | MXN 293,581 | 2.936% |
| MXN 20 million | MXN 213,973 | MXN 593,581 | 2.968% |
| MXN 40 million | MXN 213,973 | MXN 1,193,581 | 2.984% |
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How much do notary and registry fees add in Cabo?
Notary and Public Registry costs add a noticeable second layer to a Cabo purchase, although neither comes close to the 3% acquisition tax on a typical transaction.
Baja California Sur uses a progressive notarial tariff. The official Colegio de Notarios tariff calculates remuneration from the transaction amount, defined as the highest of the agreed price, commercial value or fiscal value. The marginal percentages fall as the transaction becomes larger.
That makes simple rules such as “the notary always costs 1%” too crude. The peso bill rises with the property price, while the effective percentage generally falls at higher values.
The Public Registry creates another charge. Baja California Sur's published state tariff has used 3.25 per thousand of transaction value, equivalent to 0.325%, plus the applicable fixed registration amount for transfers of real estate.
A MXN 20 million transaction therefore generates about MXN 65,000 from the 0.325% registry component alone. The notarial bill comes on top, as do taxes, certificates, appraisal work and other disbursements handled through the closing.
For an actual purchase, the useful number is the notary's written closing estimate for that specific property rather than a generic online percentage.
Should a Cabo buyer budget 4% or closer to 8% for closing costs?
A foreign buyer in Cabo should currently budget around 5% to 8% of the purchase value for a normal residential closing rather than assume 4% will cover everything.
Recent Los Cabos closing guides are converging around that 5%–8% range after the ISABI increase. A current Cabo Lux Realty breakdown, for example, gives the same range for a typical foreign buyer purchasing through a fideicomiso. Recent local closing-cost estimates from other Cabo brokers land in broadly similar territory.
The bottom of the range becomes easier to understand if we build the bill from the ground up. ISABI approaches 3% on expensive transactions. Public Registry fees add roughly another third of a percent under the published tariff. Notarial remuneration then sits above those charges, followed by appraisal, certificates, trust work and other closing expenses.
Some costs are relatively fixed, so cheaper properties can actually suffer a higher percentage burden. On larger purchases, those fixed charges become less important and the total percentage usually compresses.
Complex title issues, financing, powers of attorney, extensive legal work or optional title insurance can push the number past the normal range.
| Buyer budget | What it means in Cabo |
|---|---|
| Around 4% | Too tight for many foreign-buyer closings today |
| Around 5% | Possible on a relatively straightforward transaction |
| 6%–8% | Safer working range for many foreign residential buyers |
| Above 8% | Possible with financing, extra legal work or unusual transaction costs |
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Do Americans and Canadians pay a special property tax in Cabo?
No. Cabo San Lucas does not charge Americans, Canadians or other foreign owners a separate annual predial rate just because they are foreigners.
The extra cost comes from the legal structure foreigners normally use to hold residential property near the coast.
Mexico restricts direct foreign ownership of land within 50 kilometres of the coastline. Cabo San Lucas sits well inside that restricted zone, so a foreign individual buying residential property normally holds the beneficial rights through a Mexican bank fideicomiso.
The bank acts as trustee while the buyer remains the beneficiary with the economic rights normally associated with ownership, including the ability to use, sell, inherit or otherwise deal with the property subject to the trust and Mexican law. The trust can run for up to 50 years and can be renewed.
This setup adds costs that a Mexican individual holding direct title may not face, but it does not create a higher foreigner predial rate.
How much does a Cabo fideicomiso cost now?
A foreign Cabo buyer should expect a meaningful setup cost for the fideicomiso plus an annual bank charge that usually runs into hundreds of US dollars.
The cleanest fixed number is the federal permit. The Secretaría de Relaciones Exteriores currently charges MXN 21,650 for the permit to constitute a fideicomiso in Mexico's restricted zone.
That federal charge does not cover the bank's own trustee fees. Each bank sets its pricing, so there is no single legal annual tariff for every Cabo fideicomiso.
Current Cabo market guides generally put annual trustee administration around USD 500–1,000, while setting up the trust can run into several thousand dollars once the bank and transaction work is included.
The annual fee should be treated as a recurring ownership expense. For a modest condo, USD 700 every year is material compared with a predial bill that might only be a few hundred dollars. On a multimillion-dollar villa, the same trust charge barely moves the economics.
The federal permit itself has also become more expensive over time, so old closing guides quoting much lower government amounts are now stale.
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Are HOA fees in Cabo San Lucas bigger than property taxes?
Yes. For a large share of Cabo condo owners, the HOA bill is several times larger than the annual predial.
This is where buyers can badly misread the carrying cost. Current Los Cabos fee schedules put simple condos roughly around USD 150–300 a month, many gated developments around USD 300–600, luxury properties around USD 500–1,500, and some branded or full-service residences well above USD 1,500.
A recent review of current community schedules in Los Cabos found a broader market extending from roughly USD 100 per month at the low end to around USD 1,500 for many high-end properties. Other recent community-by-community data put some ultra-luxury branded residences at USD 2,000–3,000 or more once resort-management charges are included.
Now compare that with predial. A home with a MXN 10 million cadastral value at the owner-occupied rate owes roughly MXN 11,533 a year before any discount. An HOA of USD 500 a month costs USD 6,000 a year.
That gap is large enough that anyone estimating Cabo ownership costs from property tax alone is looking at the wrong number.
| Property type | Indicative monthly HOA | Approx. annual HOA |
|---|---|---|
| Basic condo | USD 150–300 | USD 1,800–3,600 |
| Gated / mid-market condo | USD 300–600 | USD 3,600–7,200 |
| Luxury residence | USD 500–1,500 | USD 6,000–18,000 |
| Branded / full-service residence | USD 1,500–3,000+ | USD 18,000–36,000+ |
Can a cheap Cabo HOA fee turn into an expensive problem?
Absolutely. A Cabo development with unusually low HOA dues can leave owners exposed to large special assessments later.
Cabo associations have expensive assets to maintain: pools, elevators, pumps, roofs, private roads, gates, landscaping and security infrastructure. Coastal exposure also means salt, sun, humidity and storm damage have to be taken seriously.
A USD 250 monthly fee therefore tells us very little on its own. We need to know how much money sits in reserves, whether owners are behind on payments, whether insurance coverage is adequate and which large projects are coming due.
Recent Los Cabos HOA guides make the same practical point from current community data: a low advertised fee can hide a weak reserve fund, while some communities layer a master HOA, condominium association and resort-management fee on the same property.
Golf and beach-club costs can also sit outside the basic HOA. In communities such as Palmilla, Querencia, Diamante or Quivira, the development name alone is not enough to know the owner's full annual bill because individual sub-developments and club structures differ.
Before buying, we would want the actual current fee schedule for the unit, recent association financial statements and details of any approved or expected special assessment.
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What does a normal year of owning a Cabo condo actually cost?
For a typical Cabo condo, HOA, fideicomiso, insurance and utilities can make the annual predial look almost trivial.
Consider a foreign owner with a condo carrying a MXN 10 million cadastral value and a USD 400 monthly HOA. If the property is used as a residential rental, annual predial is roughly MXN 22,997. The HOA alone costs USD 4,800 a year.
Then comes the annual fideicomiso trustee fee, commonly several hundred dollars. Interior insurance, electricity, internet, repairs and unit maintenance follow. A rental owner can add property management, cleaning and guest-related costs.
We should be careful about forcing those variable expenses into one universal percentage because a downtown two-bedroom condo and a resort residence in the Corridor have completely different cost structures.
For a real Cabo condo, predial usually ends up as one of the smaller recurring expenses.
Are Cabo closing costs proportionally worse on cheaper properties?
Often, yes. Buyers at the lower end of the Cabo market can lose a slightly larger percentage of their purchase price to closing costs.
ISABI stays close to 3% once the transaction becomes sizeable, so that component barely changes in percentage terms. Several other expenses behave differently. Trust setup, certificates, appraisals and parts of the notarial process contain fixed or semi-fixed amounts.
Those costs weigh more heavily on a USD 300,000 condo than on a USD 3 million villa.
The official notarial tariff also uses declining marginal percentages as transaction values increase. That pushes in the same direction: expensive properties generate much larger bills in pesos, but closing costs can represent a smaller percentage of the asset.
This is especially relevant for investment calculations. If a buyer expects to hold an entry-level Cabo property for only a few years, the transaction cost paid on entry becomes a meaningful hurdle before appreciation or rental income produces a positive return.
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What taxes and fees appear when you sell a Cabo property?
Selling a Cabo property can produce a much larger tax bill than the annual predial because Mexican income tax on the seller's gain can become substantial.
The buyer normally deals with the acquisition tax, while the seller has a different calculation. The notary determines the taxable gain and applicable withholding based on factors such as the documented acquisition cost, qualifying expenses and improvements, ownership structure, tax status and any exemption that legally applies.
There is no credible universal “Cabo seller tax of X%” because two properties sold for the same price can produce completely different taxable gains.
A property purchased recently for MXN 18 million and sold for MXN 20 million is fundamentally different from a property bought many years ago at a much lower documented basis and now sold for the same MXN 20 million.
This is why invoices for qualifying improvements and the original acquisition documentation deserve to be preserved. They may look unimportant while someone owns the property, but they can become extremely important when the gain is calculated.
Broker commission also belongs in the resale budget. Unlike predial or ISABI, commission is commercial rather than a fixed municipal tax, so the amount depends on the listing agreement and transaction.
So how much are property taxes and fees in Cabo San Lucas today?
Cabo San Lucas still has very cheap annual property tax, but buying and carrying the property can cost far more than the predial bill suggests.
For an owner-occupied urban home, the Los Cabos predial rate is 0.115331% of cadastral value. Residential rental property is taxed at 0.22997%, while undeveloped land can face substantially higher rates. Those numbers make annual municipal property tax one of the lighter parts of Cabo ownership.
Buying is where the larger mandatory costs appear. ISABI is now 3% after the statutory deduction, and the taxable base can be driven by the highest relevant transaction, fiscal or appraised value. Add the notary, Public Registry, appraisal, certificates and, for many foreigners, fideicomiso expenses, and roughly 5%–8% is a much more realistic working budget for a normal foreign-buyer closing these days.
After closing, the property type decides what happens next. A simple home without an expensive association can remain relatively cheap to carry. A resort condo can easily have USD 5,000, USD 10,000 or more in annual HOA charges before electricity, insurance, maintenance or management. At the very top end, branded-residence fees can move well beyond those levels.
So the number we would watch least closely is actually the one buyers ask about first: predial. Cabo property tax remains unusually low. The costs capable of materially changing the economics are the roughly 3% acquisition tax, the rest of the closing stack, and the HOA or resort fees attached to the specific property.
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OUR METHODOLOGY
This analysis does not treat Cabo property costs as a single tax-rate question. We reconstructed the full ownership cycle instead: annual predial, acquisition tax, notary and registry charges, foreign-buyer trust costs, HOA and other recurring expenses, and the tax exposure that can appear when the property is eventually sold.
For taxes and legal requirements, we prioritized primary sources. The Los Cabos Municipal Treasury Law is the core reference for predial classifications, rates and the municipal acquisition-tax framework; the state legislative reform confirms the move to a 3% ISABI rate and the five-annual-UMA deduction; and the 2026 municipal revenue framework and Los Cabos payment announcements were used to check the current fiscal setup and early-payment discounts.
We kept the tax bases separate because they are easy to mix up. Predial is modeled from cadastral value, while acquisition tax can depend on the highest applicable transaction, fiscal, cadastral or appraised value. We translated the statutory rates into peso examples at several property values rather than relying on percentages alone.
State-level costs were treated separately from municipal taxes. Baja California Sur's law on state rights and products and the published Public Registry tariff were used for registration charges, while the state's notarial framework was used to understand how notarial remuneration is structured rather than applying a flat online rule such as “1% for the notary.”
Foreign-buyer costs were checked against federal and first-hand institutional sources. The Mexican Constitution and SRE restricted-zone guidance establish the legal basis for the fideicomiso structure and its 50-year term, while SRE's current fee schedule provides the federal permit cost. BBVA and Banorte were used as first-hand banking references for how restricted-zone trusts operate; commercial trustee and HOA charges were treated as ranges because those fees are set by banks, associations and developments rather than by one statutory tariff.
For resale, we avoided using a universal Cabo seller-tax percentage. Mexico's Income Tax Law and SAT guidance show why the result depends on the seller's documented basis, qualifying costs and improvements, tax status, exemptions and the notary's calculation. That is a very different type of cost from predial or ISABI.
Key sources include: the Los Cabos Municipal Treasury Law, the state legislative reform on Los Cabos ISABI, the Los Cabos 2026 Municipal Revenue Law, the 2026 Los Cabos predial discount announcement, the 2025 predial discount schedule, the official 2026 UMA publication, the Baja California Sur Law on State Rights and Products, the published Baja California Sur state-rights tariff, the Baja California Sur Notariado Law, the Mexican Constitution, SRE guidance on restricted-zone fideicomisos, SRE's current costs and timing page, BBVA's restricted-zone fideicomiso guidance, Banorte's restricted-zone fideicomiso guidance, Mexico's Income Tax Law, and SAT guidance on the sale of real estate.
Buying real estate in Cabo San Lucas can be risky
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