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Everything you need to know before buying real estate is included in our Mexico Property Pack
Property taxes in Mérida are relatively affordable compared to many international markets, with the annual rate set at 0.19% of the assessed value.
Understanding the complete tax structure is crucial for both investment decisions and budgeting as a homeowner, as additional fees like garbage collection and potential rental income taxes can significantly impact your total annual costs.
If you want to go deeper, you can check our pack of documents related to the real estate market in Mexico, based on reliable facts and data, not opinions or rumors.
The annual property tax in Mérida is 0.19% of the assessed value, which typically represents 30-50% of the market value.
For a house worth 5 million pesos at market value, you can expect to pay approximately 4,750 pesos per year in property taxes, plus around 2,200 pesos for garbage collection.
| Tax/Fee Type | Rate/Amount | Details |
|---|---|---|
| Annual Property Tax | 0.19% of assessed value | Assessed value is 30-50% of market value |
| Garbage Collection | 1,900-2,500 pesos/year | Per household |
| Early Payment Discount | Up to 30% | January payment gets maximum discount |
| Late Payment Penalty | 2-5% per month | Compounded monthly |
| Closing Costs | 4-7% of purchase price | One-time cost when buying |
| Home Insurance | 0.1-0.2% of property value | Annual premium |
| Property Acquisition Tax | 2% of assessed value | One-time payment at purchase |
What is the annual property tax rate in Mérida?
The annual property tax rate in Mérida is 0.19% of the official assessed value of your property.
This rate applies to the cadastral value, which is the value assigned by the municipality for tax purposes. The 0.19% rate is significantly lower than property tax rates in many other countries and Mexican cities.
As of September 2025, this rate remains stable and competitive within the Mexican real estate market. The municipality of Mérida uses this consistent rate across all residential properties, making tax calculations straightforward for homeowners.
For comparison, some Mexican cities charge between 0.2% to 0.5% of assessed value, making Mérida's rate quite attractive for property investors.
How is the assessed value determined and how does it compare to market value?
The assessed value, known as the cadastral value, is assigned by the municipality based on property size, construction type, location, and general characteristics.
This assessed value is typically 30-50% of the actual market value, meaning you pay taxes on a fraction of what your property is actually worth. The municipality updates these assessments periodically, but they generally lag behind market appreciation.
As of June 2025, average market prices in Mérida residential neighborhoods are around 20,883 pesos per square meter for resale houses and 37,748 pesos per square meter for apartments. However, your tax assessment will be based on a much lower valuation.
This system benefits property owners because while your property may appreciate significantly in market value, your tax burden remains based on the lower assessed value.
It's something we develop in our Mexico property pack.
What is the average assessed value per square meter for houses?
No public database reports the exact average assessed value per square meter for Mérida, as these valuations are determined individually by the municipality.
However, based on current market prices averaging 20,883 pesos per square meter for resale houses, and knowing that assessed values typically represent 30-50% of market value, you can estimate assessed values range from 6,265 to 10,442 pesos per square meter.
For new construction apartments with market values around 37,748 pesos per square meter, assessed values would likely fall between 11,324 to 18,874 pesos per square meter.
To get the exact assessed value for a specific property, you need to request the "valor catastral" from the Mérida municipal office or check your property's official documentation.
How much yearly property tax would you pay on houses worth 2, 5, and 10 million pesos?
Property tax calculations depend on the assessed value, not the market value, so the actual tax will be lower than calculating 0.19% of the market price.
| Market Value (MXN) | Estimated Assessed Value (MXN) | Annual Property Tax (MXN) |
|---|---|---|
| 2,000,000 | 1,000,000 | 1,900 |
| 5,000,000 | 2,500,000 | 4,750 |
| 10,000,000 | 5,000,000 | 9,500 |
| 15,000,000 | 7,500,000 | 14,250 |
| 20,000,000 | 10,000,000 | 19,000 |
Are there additional municipal fees besides the base property tax?
Yes, there are additional municipal fees beyond the base property tax, with garbage collection being the most significant.
The garbage collection fee ranges from 1,900 to 2,500 pesos per year per household, regardless of property value. This fee is mandatory for all residential properties and covers weekly waste pickup services.
Some neighborhoods may have additional fees for street lighting or maintenance, but these are typically modest and vary by specific location within Mérida.
No significant regular municipal charges above the Predial tax and garbage collection were found for standard residential properties in Mérida as of September 2025.
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How much is the garbage collection fee per household annually?
The garbage collection fee in Mérida ranges from 1,900 to 2,500 pesos per year per household.
This fee is charged regardless of property size or value and covers regular weekly waste pickup services throughout the year. The fee may vary slightly depending on your specific neighborhood within Mérida.
Payment for garbage collection can often be made together with your property tax payment, making it convenient to handle both municipal fees simultaneously.
This fee represents excellent value compared to private waste management services and is considered reasonable by most homeowners.
Is there a surcharge for owning a second property or rental property?
No, there is no additional municipal surcharge for owning a second home or multiple properties in Mérida.
However, if you rent out your property, you become subject to federal income tax (ISR) on rental income, which varies from 2% to 35% depending on your declared income level.
For foreigners and non-residents, there is a mandatory 25% withholding tax on gross rental income that must be collected and remitted to the federal government.
Additionally, if you rent furnished properties, you may need to collect and remit 16% VAT (IVA) on the rental income to federal authorities.
It's something we develop in our Mexico property pack.
Are there discounts available for early payment of property taxes?
Yes, Mérida offers substantial discounts for early payment of property taxes, with the highest discount of 30% available for January payments.
The early payment discount structure for 2025 includes:
- 30% discount for payments made in January
- 15% discount for payments made in February
- 8% discount for payments made in March
- 50-100% reductions for retirees, pensioners, senior citizens, and those with disabilities
- Additional 15% discount for houses with certified solar panels or green roofs
These discounts can significantly reduce your annual tax burden, making it highly advantageous to pay early in the year rather than waiting until the deadline.
What penalties apply if you don't pay property taxes on time?
Late payment penalties range from 2% to 5% per month of the unpaid tax amount, compounded monthly until paid in full.
These penalties accumulate quickly, so a property tax bill of 5,000 pesos could increase by 100-250 pesos per month if left unpaid. After several months, the penalty can exceed the original tax amount.
Overdue property tax debt may also trigger additional charges and can create restrictions on future property transactions, including difficulties when trying to sell or refinance.
The municipality takes tax collection seriously, and prolonged non-payment can result in legal action or liens against the property.
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How much are closing costs and notary fees when buying a house?
Typical closing costs, including all notary fees, taxes, and registration, range from 4% to 7% of the purchase price, usually closer to 5% in Mérida.
For a 5 million peso house, you should budget approximately 250,000 pesos for closing costs. This includes notary fees, property registration, title insurance, and various administrative costs.
These costs are generally paid by the buyer and must be factored into your total investment when purchasing property in Mérida.
Working with an experienced notary and real estate professional can help ensure all costs are properly calculated and disclosed upfront.
What is the typical annual cost of home insurance for a 3 million peso house?
Home insurance for a house valued at 3 million pesos typically costs between 3,000 to 7,000 pesos annually.
This represents approximately 0.1% to 0.2% of the property's market value per year. The exact premium depends on coverage levels, property location, construction materials, and security features.
Basic coverage typically includes protection against fire, theft, natural disasters, and liability. Enhanced coverage options are available for additional premium costs.
Insurance is not mandatory by law but is highly recommended and required by most mortgage lenders if you finance your purchase.
It's something we develop in our Mexico property pack.
Are there federal or state taxes besides municipal property tax?
The main additional tax is the Property Acquisition Tax of 2% of the assessed value, paid once at the time of purchase.
There are no annual federal or state recurring taxes for non-rental properties beyond the municipal property tax. This makes Mérida property ownership relatively straightforward from a tax perspective.
However, if you rent your property, federal income tax (ISR) and VAT (IVA) taxes will apply to rental income as previously mentioned.
Foreign owners may also need to consider tax obligations in their home country, depending on their residency status and local tax laws.
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.
Property taxes in Mérida are remarkably affordable, with the 0.19% rate on assessed values making homeownership accessible for both residents and investors.
The early payment discounts and reasonable additional fees create a favorable environment for property ownership, especially when compared to international markets.
Sources
- Property Tax Calculation Guide - Plalla
- Complete Property Tax List Mexico - The Latinvestor
- Mérida Price Forecasts - The Latinvestor
- Mérida Property Listings - RealEstate.com.au
- Cost of Living Mérida - Mexico Travel Secrets
- Property Leasing Tax Regimen - MexTax
- Mexican Property Owner Tax Obligations - MexTax
- Vacation Rental Tax Obligations - Top Mexico Real Estate
- Property Tax Facts for Expats - MexLaw
- 2025 Property Tax Discounts Mérida - The Yucatan Post