Where do most American retirees live in Mexico?
February 24, 2026
If you’re thinking about buying real estate in Yucatán, one of the first questions that probably comes to mind is: Do you pay property taxes in Mérida, Mexico? The short answer is yes, but they are generally much lower than what many buyers are used to in the United States or Canada.
Understanding how property taxes work in Mexico is essential before purchasing a home, condo, or investment property. In this guide, we break down everything you need to know about acquisition taxes, annual property taxes, and ongoing obligations in Mérida as of 2026.
Yes, property owners in Mérida pay an annual municipal tax called predial. This is the local property tax charged by the Municipality of Mérida.
Unlike in many U.S. cities where property taxes can be significant, predial in Mérida is typically very affordable. For a mid-range residential home, annual property tax often ranges between approximately MXN 1,500 and MXN 6,000 per year (roughly USD 85 to 345). Even higher-value properties generally pay far less than comparable homes in North America.
The tax is calculated based on the cadastral value (valor catastral) of the property, not the market value you paid. Because cadastral values are usually lower than market prices, annual tax bills remain modest.
There are often early-payment discounts of 10% to 15% if you pay in the first months of the year, which makes ownership even more affordable.
So yes, you do pay property taxes in Mérida, Mexico, but they are generally considered low and manageable.
When purchasing real estate in Mérida, the main tax you will encounter is the ISAI (Impuesto Sobre Adquisición de Inmuebles), also known as the property acquisition tax.
As of 2026, the ISAI is progressive and typically ranges between:
• 2.5% for lower-value properties
• Up to 4.5% for higher-value properties
This tax is calculated based on the official property value determined during the transaction and is collected by the notary at closing.
In addition to ISAI, buyers may encounter:
• Notary fees (usually 1% to 2%)
• Public Registry fees
• Certificate and title verification costs
• Fideicomiso setup costs if required for foreign buyers
VAT (IVA) does not normally apply when purchasing a resale residential property from an individual. However, VAT may appear in certain developer or commercial transactions, so it’s important to confirm the tax structure with your notary before signing.
Beyond the purchase price itself, buyers should budget for closing costs.
In most standard residential transactions in Mérida, total acquisition costs typically range between 6% and 8% of the property price.
For example:
• On a MXN 3,000,000 property, closing costs may range between MXN 180,000 and MXN 240,000
• In more complex transactions, costs can rise to 9%–12%
• In very simple transactions, costs may be closer to 4.5%
What influences the final percentage?
• The value of the property (due to progressive ISAI brackets)
• Whether the property has legal irregularities
• Whether a bank trust (fideicomiso) is required for foreign buyers
• The notary’s professional fee structure
It’s important to understand that government taxes (primarily ISAI) represent the largest portion of buyer costs, while notary and registry fees make up the remainder.
Proper due diligence and working with experienced professionals help avoid unexpected expenses during closing.
Once you own property in Mérida, your ongoing tax obligations are relatively straightforward.
The main recurring tax is:
Annual Predial (Property Tax)
As mentioned earlier, this is typically low compared to North American standards.
If you decide to rent the property, you may also be responsible for:
Income tax on rental income
Rental income is taxed under Mexico’s Arrendamiento regime. The effective rate depends on total income and deductions, but many landlords fall within an effective 15%–25% range after allowable expenses.
If you sell the property in the future, you may be subject to:
Capital gains tax (ISR)
This is calculated based on the difference between your documented purchase price and your sale price, adjusted for eligible deductions and inflation factors. The notary generally calculates and withholds the tax at closing.
Overall, ongoing ownership taxes in Mérida remain relatively moderate, which is one reason many foreign buyers consider Yucatán an attractive place to live or own property.
Understanding taxes and closing costs is one of the most important steps before purchasing property in Mexico. Having the right guidance ensures transparency, legal security, and financial clarity.
At Jaguar Tulum Real Estate, we assist both national and international buyers throughout the Riviera Maya and Yucatán region. From explaining acquisition taxes to coordinating with trusted notaries and legal professionals, we guide you step by step.
If you’re considering purchasing property and want personalized advice tailored to your situation, your first consultation with Jaguar Tulum Real Estate is completely free.
Contact us today and let’s help you make an informed and confident decision about your next property in Mexico.
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