How much are property taxes and fees in Mexico City?

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Why do Mexico City property costs look so different depending on who explains them?

Mexico City property costs are confusing because people often lump the one-time cost of buying a home together with the much smaller taxes paid every year.

A buyer can easily hear that “property tax is low” and that “fees are around 7%” without realizing those statements describe completely different expenses. The large bill comes when ownership changes. Mexico City charges an Impuesto sobre Adquisición de Inmuebles, or ISAI, and the transaction also generates notarial, registration, appraisal and administrative costs.

Once the property is owned, the main city tax is predial. That tax follows another tariff and uses the cadastral value rather than automatically applying a percentage to the price paid for the home.

There is one more wrinkle. For acquisition tax, Mexico City can look beyond the price written in the sale agreement. The taxable value may instead come from the cadastral value or a qualifying commercial appraisal when one of those figures is higher.

For most buyers, the simplest way to think about Mexico City today is to separate a fairly expensive purchase from a much lighter annual tax burden.

How much should you budget for closing costs when buying in Mexico City?

A buyer in Mexico City should currently keep roughly 7% to 8% of the property value aside for a normal residential closing, with extra room if a mortgage or unusual paperwork is involved.

That means a MXN 5 million apartment can require another MXN 350,000 to MXN 400,000 just to complete the purchase. At MXN 10 million, the same budgeting range becomes roughly MXN 700,000 to MXN 800,000.

The acquisition tax explains much of that bill. Using the current Mexico City tariff, ISAI on a MXN 5 million taxable value comes to roughly MXN 279,000 before registration, appraisal work, certificates and the notary's actual remuneration are added.

At MXN 10 million, ISAI alone rises to about MXN 598,500. A buyer who has exactly enough cash for the down payment and purchase price can therefore find the closing costs surprisingly painful.

Banks sometimes quote a wider range. BBVA, for example, has described notarial expenses on Mexican mortgage transactions as potentially reaching roughly 5% to 9%. In practice, “gastos notariales” in these estimates usually covers much more than the notary's personal fee.

How much is the ISAI acquisition tax in Mexico City?

Mexico City's ISAI is the biggest tax most buyers face at closing, and it already approaches 6% of the taxable value on many mid-market and expensive homes.

ISAI is progressive rather than a flat percentage. The current Mexico City Fiscal Code divides properties into value bands, with each band combining a fixed amount and an additional charge on the value above the lower threshold.

That produces a steadily rising effective rate. At MXN 1 million, our calculation gives roughly MXN 43,500 of ISAI, or 4.35%. At MXN 5 million, the tax reaches about MXN 279,000, equivalent to 5.58%. At MXN 10 million, it is around MXN 598,500, almost 6%.

The progression continues at the top end. A MXN 25 million taxable value generates roughly MXN 1.57 million of ISAI, or about 6.28%.

This is why the usual 7% to 8% closing-cost estimate is believable even before we look at the rest of the transaction. ISAI consumes most of the budget on its own.

Can you lower Mexico City acquisition tax by declaring a cheaper purchase price?

A lower negotiated price can reduce Mexico City ISAI, but declaring an artificially low sale price does not give the buyer control over the tax bill.

Mexico City's rules compare the relevant values attached to the property. Depending on the transaction, the tax base can be driven by the acquisition value, cadastral value or qualifying commercial appraisal rather than simply following the number written in the purchase contract.

Suppose an apartment is negotiated down from MXN 6 million to MXN 5.5 million but receives an applicable commercial appraisal of MXN 6.1 million. The buyer should not automatically expect ISAI to be calculated from MXN 5.5 million.

That makes the appraisal more than a financing formality. It can directly affect how much cash is needed at closing.

A genuine price negotiation still helps the buyer, of course, but the tax saving may be smaller than expected when another accepted valuation remains higher.

Are notary fees really 5% to 9% when buying property in Mexico City?

The notary personally does not pocket 5% to 9% of a Mexico City property purchase. Most of the money passing through the notary goes elsewhere.

The Colegio de Notarios de la Ciudad de México makes this distinction quite clearly. In a typical property transaction, a large majority of the amount collected through the notary can consist of taxes, government rights, certificates, valuations and other expenses needed to complete the deed.

The actual notarial remuneration follows an official tariff. The current tariff also says the transaction amount used to calculate remuneration can depend on the highest relevant value among the agreed consideration, commercial value and fiscal value.

So when a closing estimate says “notary costs: MXN 350,000,” ask for the breakdown. On a MXN 5 million apartment, most of that amount may be ISAI and other third-party or government charges.

Registration, certificates and appraisal expenses then add smaller amounts. They can still run into tens of thousands of pesos, especially when a mortgage also has to be registered, but they rarely explain the bulk of a large closing bill.

The useful number for a buyer is the total escrituración cost, followed by a line-by-line breakdown showing how much is tax, how much goes to the registry and other providers, and how much is genuine notarial remuneration.

Does a mortgage make buying property in Mexico City much more expensive?

A mortgage usually pushes Mexico City closing costs higher because the buyer is paying for both the property transfer and the financing around it.

The ISAI does not disappear when a bank finances the purchase. The buyer can then face additional lender fees, a bank-approved appraisal, mortgage documentation and registration of the mortgage itself.

BBVA provides a useful current example. Some of its published Mexican mortgage terms include a contracting commission equal to 1% of the financed amount, alongside appraisal and other credit expenses. Other banks use different structures, so 1% should not be treated as a market-wide rule.

On a MXN 6 million loan, however, a 1% commission alone means another MXN 60,000. That is large enough to change the cash required at closing.

For financed purchases, the common 7% to 8% estimate is better treated as a starting point. The lender's CAT, commission schedule, appraisal charge and mortgage-registration costs need to be checked separately.

How much is annual property tax in Mexico City now?

Annual predial in Mexico City is usually much lighter than the cost of buying the property, even though the effective rate rises as cadastral values increase.

The current Mexico City tariff charges predial every two months. Using that tariff, a cadastral value of MXN 1 million produces around MXN 1,030 per bimestre, or roughly MXN 6,200 across six periods before any early-payment discount.

At MXN 5 million of cadastral value, our calculation reaches approximately MXN 8,040 every two months and about MXN 48,300 for the year. At MXN 10 million, the annual amount is roughly MXN 124,800.

A real predial record published in material from the Mexico City Congress helps check the order of magnitude. The property showed a cadastral value of roughly MXN 5.20 million, a commercial value near MXN 7.82 million and a subsidized predial charge of about MXN 8,430 per bimestre.

That example also shows why estimating Mexico City predial from the property's sale price can go badly wrong.

Is Mexico City property tax based on what you paid for the apartment?

Mexico City predial follows the cadastral value, so a MXN 10 million apartment does not automatically receive its annual property-tax bill from a MXN 10 million tax base.

The city determines cadastral value through official land and construction values and the characteristics recorded for the property. That figure places the home into the relevant predial band.

The real case mentioned above makes the difference easy to see. Its cadastral value was about MXN 5.20 million while its indicated commercial value was around MXN 7.82 million, a gap of more than MXN 2.6 million.

For a buyer, the fastest way to get a realistic number is to request the latest predial statement for the exact property. Multiplying the asking price by a generic “Mexico property tax rate” can produce a figure with little connection to the actual bill.

We would also check that the cadastral description matches the property. Extensions, changes in construction or inaccurate records can eventually affect the assessed value.

Can you still get a discount on Mexico City property tax?

Mexico City still offers meaningful predial discounts, but the standard early-payment discount only rewards owners who pay the entire year at the beginning of the year.

The current program offered an 8% discount for annual predial paid in January and 5% for annual payment in February. Those windows have now passed for this fiscal year, although the underlying scheme remains important when estimating what an owner may pay in future years.

The program is widely used. According to the Secretaría de Administración y Finanzas, roughly 1.57 million taxpayers had benefited from the early-payment predial discounts or related vulnerable-group benefits by mid-May.

The saving becomes noticeable on higher bills. An annual predial of MXN 50,000 falls by MXN 4,000 with an 8% discount. At MXN 100,000, the difference is MXN 8,000.

Mexico City also currently gives much stronger help to qualifying vulnerable homeowners. Eligible pensioners, retirees, people with permanent disabilities and several other protected groups who live in an exclusively residential property can pay a fixed MXN 68 every two months when the cadastral value does not exceed MXN 2,808,466. Other qualifying homeowners can receive a 30% predial reduction depending on their circumstances and property value.

Those programs should not be built into an investor's budget unless eligibility has actually been confirmed.

Do apartment maintenance fees matter more than property tax in Mexico City?

In many Mexico City apartment buildings, the monthly maintenance charge can cost an owner more over the year than predial.

The cuota de mantenimiento is a private condominium expense rather than a tax. It can cover guards, reception staff, lifts, cleaning, shared electricity, gardens, gyms, pools, building insurance, repairs and reserve funds.

This becomes especially important in newer or amenity-heavy buildings. A buyer can spend ages comparing predial bills and miss a monthly maintenance fee that has a much larger effect on rental yield.

MXN 5,000 a month in maintenance already means MXN 60,000 a year. Compare that with our current predial calculation of roughly MXN 48,300 for a property carrying a MXN 5 million cadastral value.

Maintenance debt also deserves attention before closing. PROFECO advises buyers of existing condominiums to check outstanding administration and maintenance obligations alongside predial, water charges, mortgages and other claims.

For an apartment investment, we would always model predial and maintenance separately. Combining them into a vague “property tax” percentage hides the expense that can actually hurt returns.

Do foreigners pay more property tax when buying in Mexico City?

Foreign owners currently pay the same Mexico City ISAI and predial tariffs as Mexican owners, and Mexico City avoids one of the biggest extra costs foreigners encounter in Mexican beach markets.

Mexico City sits outside the constitutionally restricted zones close to Mexico's borders and coastline. A foreign buyer can therefore generally acquire residential property directly rather than using the bank fideicomiso commonly required for homes in places such as Cancún, Playa del Carmen or Los Cabos.

Foreign buyers still have federal paperwork to complete. The Secretaría de Relaciones Exteriores applies the relevant Article 27 procedure and foreign purchasers accept the required legal clause covering their status as owners.

The SRE's current 2026 schedule lists a government charge of MXN 5,250 for the relevant procedure for an individual foreign purchaser outside the restricted zone. On a MXN 10 million property, that is about 0.05% of the purchase price, far less than the local ISAI bill.

So foreigners do face some additional administration in Mexico City, but there is no separate foreigner's property-tax rate and normally no recurring bank-trust fee for an ordinary residential purchase.

Do you pay 16% VAT when buying an apartment in Mexico City?

A normal residential apartment purchase in Mexico City is generally exempt from the 16% VAT that would make property buying dramatically more expensive.

Mexican VAT law exempts the sale of land and buildings intended or used as housing. A standard existing residential apartment therefore does not suddenly cost another 16% in federal VAT.

Some expenses around the transaction can still carry VAT. The notary's taxable professional services are one example, and commercial or mixed-use property can require a different analysis.

That distinction is enough to explain why buyers sometimes see VAT inside a closing statement even though no 16% VAT has been added to the apartment itself.

For an ordinary residential purchase, ISAI remains the tax buyers need to worry about most.

Can Jornada Notarial cut Mexico City closing costs substantially?

Mexico City's Jornada Notarial can sharply reduce closing costs for qualifying lower-value homes, but buyers of expensive apartments should generally assume they will receive no such discount.

The current program gives the strongest reductions to homes at the bottom of the eligible cadastral-value range. According to the Colegio de Notarios, qualifying residential properties with cadastral values up to MXN 465,580 can receive a 60% reduction in the covered taxes, rights and notarial expenses.

The benefit then falls as values rise: 40%, 30%, 20% and finally 10% in successive bands. The current upper cadastral-value limit is MXN 2,417,272.

That makes Jornada Notarial genuinely useful for lower-priced and regularization transactions but much less relevant to the types of apartments commonly marketed to international buyers in Roma Norte, Condesa or Polanco.

The safe approach is to calculate the purchase at full cost first. Any Jornada Notarial reduction should only be deducted once the specific property and buyer have been confirmed as eligible.

How much do property taxes and fees in Mexico City really cost?

Buying property in Mexico City is expensive upfront but relatively manageable afterward: we would currently budget about 7% to 8% of the purchase value for a straightforward residential closing, while annual predial is usually far smaller.

At MXN 5 million, the current ISAI formula alone produces roughly MXN 279,000 of tax. Once the remaining closing expenses are added, a total budget around MXN 350,000 to MXN 400,000 is realistic. At MXN 10 million, keeping roughly MXN 700,000 to MXN 800,000 available is a sensible starting point.

Annual ownership looks very different. Our current tariff calculations produce about MXN 48,300 of annual predial at a MXN 5 million cadastral value and roughly MXN 124,800 at MXN 10 million, before any applicable discount. The relevant figure is the cadastral value shown on the property's account, not automatically its purchase price.

Mortgage buyers should leave more room for bank commissions, appraisal work and mortgage registration. Foreign buyers face some extra federal paperwork but currently pay no special foreign ISAI or predial rate, and residential purchases in Mexico City normally avoid the bank fideicomiso required in Mexico's restricted coastal and border zones.

For apartment buyers, condominium maintenance can also rival or exceed predial, especially in newer buildings with extensive amenities.

The main cost problem in Mexico City is the amount of cash needed to enter the market. On a short holding period, a 7% to 8% acquisition hurdle is substantial. The longer the property is held, the easier that one-time friction becomes to absorb through rental income and appreciation.

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