Real Estate Taxes in Mexico

Taxes in Mexico: A Practical Closing Breakdown

Buyer Taxes

For buyers, taxes are very straightforward:

• Acquisition Tax

  • Cabo San Lucas: 3% of the purchase price

  • La Paz and most of Baja California Sur: 2%

• Registration Fees

  • These are not taxes, but mandatory government registration costs paid to the authorities.

Those are the only buyer-side taxes.

Seller Taxes

For sellers, tax obligations include:

• Capital Gains Tax (calculated at closing)

• All property taxes must be fully paid before the sale can be completed

From a tax perspective, those are the only seller-side taxes involved in a standard transaction.

Capital Gains & Notaries: Do They All Apply the Same Rules

In theory, notaries should apply capital gains rules consistently—but in practice, they don’t always.

While most notaries follow similar guidelines, each notary has discretion when it comes to:

• Accepting or rejecting deductions

• Reviewing invoices for improvements

• Evaluating appraisals and supporting documentation

Some notaries may be more conservative, while others apply a broader interpretation of allowable deductions. This is why experienced teams work with notaries who:

• Understand real estate transactions

• Apply reasonable, consistent criteria

• Have experience with foreign sellers

How to Identify a Good Real Estate Agent

A good agent is defined less by sales ability and more by follow-through and knowledge.

Key traits of a strong agent:

• Consistent communication and follow-up
  Clients buying in another country are naturally nervous. An agent often becomes a trusted point of stability.

• Basic legal and transactional knowledge
  Agents should understand:

  • Trust assignments and changes

  • Power of attorney requirements

  • When a client must be physically present

• Willingness to recommend a closing attorney
  Agents who say “you don’t need an attorney” are usually prioritizing speed over protection.

• Ability to act as a true advisor
  A good agent understands not just the property, but the legal, financial, and strategic implications of the transaction.

Without that baseline knowledge, the process becomes more stressful—for the client, the attorney, and everyone involved.

Can One Attorney Represent Both Buyer and Seller?

Yes—and it’s very common in Mexico, especially for simple transactions.

Pros

• Faster and more efficient process

• One point of coordination

• Fewer delays and miscommunications

• Closings tend to happen on schedule

When Separate Attorneys Are Advisable

It may be better to have separate representation if the transaction involves:

• Early occupancy agreements

• Seller or buyer financing

• Complex negotiations or unusual contract terms

For standard closings, using one attorney is typical and works well. For more complex deals, having a second attorney review the transaction adds protection.

Bottom Line

Mexican real estate closings are straightforward when:

• Taxes are clearly understood

• Experienced notaries are used

• Agents know the legal basics

• Attorneys are involved when complexity increases

That combination creates smoother closings and far fewer surprises.

Alejandro Donnadieu - alejandro@caborealestate.com

Mariana Plowes - mph@bajalegalgroup.com