Tax Obligations for Vacation Rentals in Mexico
Owning real estate in Mexico, and particularly in the Riviera Maya, can have several advantages for you & your family. Having a vacation home in one of Mexico’s most renowned destinations & earning additional income is considered having the best of both worlds. All through the years, several foreign investors have created a nice rental income for themselves. But like anywhere else in the globe, you have to sacrifice a part of your profits by way of taxes. Learning the local tax laws should be researched & studied before and/or during the buying process.
Owning real estate in Mexico, and particularly in the Riviera Maya, can have several advantages for you & your family. Having a vacation home in one of Mexico’s most renowned destinations & earning additional income is considered having the best of both worlds. All through the years, several foreign investors have created a nice rental income for themselves. But like anywhere else in the globe, you have to sacrifice a part of your profits by way of taxes. Learning the local tax laws should be researched & studied before and/or during the buying process.
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• All rental earning is subject to Impuesto Sobre la Renta (ISR).
Your residential status is independent from it. You must pay
taxes on your rental earning. The ISR tax rate is based on 25
percent of your gross income earned.
• If the rental property is furnished, on top of the ISR tax,
there’s an Impuesto al Valor Agregado (IVA), or valued added
tax (VAT). The IVA is collected from the renter & paid to the
Mexican govt by the landlord. This is an extra 16 percent tax
charged directly to the tenants.
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