Authored by the expert who managed and guided the team behind the Mexico Property Pack
Yes, the analysis of San Miguel de Allende's property market is included in our pack
Property taxes in San Miguel de Allende are remarkably affordable compared to North American standards.
Most homeowners pay between $300-550 USD annually for a mid-range $250,000 property, with rates ranging from 0.1% to 0.3% of the assessed value. The key advantage is that Mexico's assessed values are typically 20-40% of actual market value, keeping tax bills exceptionally low.
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.
Property taxes in San Miguel de Allende range from 0.1% to 0.3% of assessed value, with most mid-range homes paying $300-550 USD annually.
Total annual carrying costs including taxes, municipal fees, and insurance typically run under $1,000 USD for a $250,000 property.
| Cost Category | Annual Amount (USD) | Notes |
|---|---|---|
| Property Tax (Predial) | $300-550 | 0.1-0.3% of assessed value |
| Municipal Fees | $144-360 | Garbage collection, local services |
| Homeowners Insurance | $200-450 | Optional but recommended |
| Early Payment Discount | 10-15% savings | January: 15%, February: 10% |
| Closing Costs (one-time) | 5-7% of purchase price | Includes 2% acquisition tax |
| Rental Income Tax (foreigners) | 25% of gross income | Withholding tax, no deductions |
| Total Annual Carrying Costs | $644-1,360 | For $250,000 property |
What is the official property tax rate in San Miguel de Allende?
The property tax rate (predial) in San Miguel de Allende ranges between 0.1% and 0.3% of your property's government-assessed value.
Most properties fall under the standard rate of 0.19% (0.0019) of the cadastral value, which is the rate commonly used throughout much of Mexico as of September 2025.
This rate applies to the municipal assessment, not the market value, which makes San Miguel de Allende property taxes significantly lower than comparable North American markets. The assessment methodology focuses on property size, location, construction type, age, and improvements rather than current market conditions.
Property owners receive their annual tax bill (boleta predial) typically in December for the following year, with payment due by the end of January to qualify for maximum discounts.
How is the property's assessed value calculated?
The cadastral value is determined by San Miguel de Allende's municipal assessors using a standardized formula that considers property characteristics rather than market dynamics.
Key factors include lot size, built square footage, construction materials and quality, property age and condition, neighborhood classification, and any recent improvements or additions.
The assessed value typically runs 20-40% of actual market value, creating substantial savings for property owners compared to markets where taxes are based on full market assessments. For example, a property worth $250,000 USD on the market might have a cadastral value of only $50,000-100,000 USD for tax purposes.
Assessments are updated periodically but not annually, and major renovations or additions may trigger a reassessment that increases the cadastral value.
How much do homeowners actually pay annually for a mid-range home?
Homeowners with a $250,000 USD property typically pay between $300-550 USD annually in property taxes.
Most median-priced homes in San Miguel de Allende's desirable neighborhoods fall into the 5,000-9,000 Mexican peso range annually, which translates to roughly $295-530 USD at current exchange rates.
The variation depends on the specific cadastral assessment, property location within the municipality, and whether any recent improvements have been made. Properties in the historic centro area may have slightly higher assessments due to location premiums, while homes in newer developments often have more standardized assessments.
It's something we develop in our Mexico property pack.
These amounts assume payment with early-year discounts, which most informed property owners take advantage of to reduce their annual tax burden.
What are the minimum and maximum property tax bills in San Miguel?
Property tax bills in San Miguel de Allende range from as low as $100 USD annually for basic properties to around $1,800 USD for luxury estates.
| Property Type | Annual Tax Range (USD) | Typical Property Value |
|---|---|---|
| Small casita/basic home | $100-200 | Under $100,000 |
| Standard family home | $250-400 | $150,000-200,000 |
| Mid-range colonial home | $350-600 | $200,000-350,000 |
| High-end residence | $600-1,200 | $400,000-800,000 |
| Luxury estate | $1,200-1,800 | $800,000-1,500,000+ |
Even luxury properties rarely exceed $1,800 USD annually due to the low assessment ratios used by Mexican municipalities, making San Miguel de Allende particularly attractive for high-value property investments from a tax perspective.
Are there discounts for paying property taxes early?
Yes, San Miguel de Allende offers significant early payment discounts that can save homeowners 10-15% on their annual property tax bill.
The discount structure works as follows: 15% discount if paid during January, 10% discount if paid during February, and no discount for payments made March through December.
For a typical $400 USD annual tax bill, paying in January saves $60 USD, while February payment saves $40 USD. These discounts apply to the base predial tax and are automatic when payments are made during the discount periods.
Property owners can pay at municipal offices, authorized banks, or increasingly through online platforms, with the discount automatically applied based on the payment date.
Most experienced expat property owners make January payment a priority to maximize these savings year after year.
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What additional municipal fees are added to property tax?
Municipal fees for garbage collection and local services typically add $144-360 USD annually to property carrying costs in San Miguel de Allende.
Most standalone homes pay approximately 200-500 Mexican pesos monthly ($12-30 USD) for garbage collection and basic municipal services, though not all properties are billed separately for these services.
Some neighborhoods or gated communities include these fees in HOA dues, while others receive direct municipal billing. The variation depends on your specific location and whether your development has private waste management contracts.
Additional services like street lighting maintenance, public area cleaning, and local infrastructure upkeep are typically included in these base municipal fees rather than being charged separately.
Properties in the historic centro area may have slightly higher service fees due to the additional maintenance requirements for cobblestone streets and colonial infrastructure.
Are there extra taxes on rental income?
Rental income taxation in San Miguel de Allende varies significantly between Mexican residents and foreign property owners.
Foreign property owners face a 25% withholding tax on gross rental income with no deductions allowed, collected monthly by property managers or tenants.
Mexican residents pay progressive personal income tax rates ranging from 1.92% to 35% on net rental income after allowable deductions for maintenance, management, and depreciation.
Non-resident foreigners cannot claim deductions for property management fees, repairs, or other rental-related expenses, making the effective tax rate higher than the nominal 25%.
It's something we develop in our Mexico property pack.
Professional property management companies typically handle the monthly tax withholding and remittance to Mexican tax authorities on behalf of foreign owners.
What federal taxes apply to property ownership?
Mexico does not impose annual federal property taxes or duties beyond the local predial tax paid to San Miguel de Allende municipality.
Unlike some countries that layer federal, state, and local property taxes, Mexico's structure keeps ongoing property ownership costs at the municipal level only.
Federal involvement occurs primarily during property transactions (acquisition taxes) and rental income taxation, but not as ongoing annual property holding costs.
This simplified structure means property owners only need to track and pay one annual property tax bill rather than multiple government levels, making compliance straightforward.
The absence of federal property taxes contributes significantly to Mexico's reputation as a low-cost property ownership destination for international investors.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Mexico versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are the transaction taxes when buying property?
Property buyers in San Miguel de Allende pay a 2% acquisition tax (ISAI) on the purchase price, plus additional closing costs totaling 5-7% of the property value.
The acquisition tax is calculated on the full purchase price and paid at closing, representing the primary transaction tax for property purchases in Mexico.
Additional transaction costs include notary fees (1-1.5% of property value), registration fees, legal fees, and miscellaneous administrative costs that collectively add another 3-5% to the purchase price.
For a $250,000 USD property, total closing costs typically range from $12,500-17,500 USD, with the 2% acquisition tax representing $5,000 of this total.
These costs are typically paid by the buyer and should be factored into purchase budgets alongside the property price and any financing costs.
How much are notary and registration costs?
Notary fees in San Miguel de Allende typically run 1-1.5% of the property's purchase price, with registration and legal fees adding another 0.5-1.5%.
The notary public (notario) handles the legal transfer process, title verification, and official registration with Mexican authorities, making their role essential for legal property ownership.
Registration fees are generally included in comprehensive closing cost packages and represent a minor expense compared to notary fees and acquisition taxes.
For a $250,000 USD property, notary costs typically range from $2,500-3,750 USD, while registration and miscellaneous legal fees add another $1,250-3,750 USD.
It's something we develop in our Mexico property pack.
These costs are standardized and non-negotiable, representing necessary expenses for securing clear legal title in Mexico's property system.
What does homeowners insurance cost annually?
Homeowners insurance in San Miguel de Allende typically costs $200-450 USD annually for average properties, though coverage is not legally mandatory.
Insurance costs range from 3,500-8,000 Mexican pesos yearly for standard coverage, with luxury properties and higher insured values commanding proportionally higher premiums.
Coverage typically includes protection against fire, earthquake, theft, and weather damage, with earthquake coverage particularly important given Mexico's seismic activity.
While not required by law, most mortgage lenders and many expat property owners consider insurance essential protection given the potential for natural disasters and property crime.
Insurance companies serving San Miguel de Allende include major Mexican insurers and some international providers specializing in expat property coverage.
What is the total estimated yearly cost for a $250,000 property?
The total annual carrying costs for a $250,000 USD property in San Miguel de Allende typically range from $644-1,360 USD, depending on specific circumstances and choices.
| Cost Category | Low Estimate (USD) | High Estimate (USD) |
|---|---|---|
| Property Tax (with early payment discount) | $255 | $468 |
| Municipal Fees (if applicable) | $144 | $360 |
| Homeowners Insurance | $200 | $450 |
| HOA Fees (if applicable) | $0 | $3,000 |
| TOTAL (without HOA) | $599 | $1,278 |
| TOTAL (with HOA) | $599 | $4,278 |
Properties in gated communities or condominiums may have additional HOA fees ranging from $50-250 USD monthly, significantly impacting total carrying costs.
Rental properties owned by foreigners incur additional 25% withholding tax on gross rental income, which can substantially increase the total cost of ownership.
These estimates exclude one-time closing costs, major maintenance, or property improvements, focusing only on recurring annual obligations.
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.
San Miguel de Allende offers exceptionally low property carrying costs compared to North American markets, with most homeowners paying under $1,000 USD annually for taxes, fees, and insurance.
The combination of low assessment ratios, minimal federal taxation, and early payment discounts makes property ownership highly affordable for international investors seeking Mexican real estate exposure.
Sources
- The Latin Investor - Property Taxes Mexico
- Plalla - Property Tax Calculation Mexico
- Doble Nacionalidad Express - Property Taxes for Expats
- San Miguel Real Estate - FAQ
- The Latin Investor - San Miguel Property
- The Latin Investor - Price Forecasts
- Discover SMA - Property Tax Discounts
- International Living - Cost of Living Mexico
- Sonia Diaz Mexico - Rental Income
- PWC - Mexico Personal Income Taxes