Renting out Mexican property as a foreigner: taxes and rules (2026)

By Lic. Pati Claudia Galarza, attorney (Licenciada en Derecho), Cédula Profesional 15176510 · Published October 18, 2026 · Español

Yes, Mexico taxes the rent you earn from a property located in Mexico, even if you live abroad. If you are not a Mexican tax resident, the income tax (ISR) is 25% of the gross rent with no deductions (Ley del Impuesto sobre la Renta, LISR, art. 158). Furnished and short-term rentals also carry IVA at 16%, and stays in Baja California carry the state lodging tax, 5% in 2026. Here is how each piece works. This article covers the Mexican side only; ask your home-country tax adviser how the same income is treated where you live.

First question: are you a Mexican tax resident?

The rules depend on tax residence, not nationality or immigration status. An individual is a Mexican resident for tax purposes if they have established their home (casa habitación) in Mexico; if they also have a home in another country, they are resident in Mexico when their center of vital interests is here, for example when more than 50% of their income for the year comes from Mexican sources (Código Fiscal de la Federación, CFF, art. 9). Someone who owns a vacation home in Rosarito but lives in another country is usually a non-resident, but check your own facts with an accountant.

Non-residents: 25% of gross rent

For a non-resident with no permanent establishment in Mexico, rent from a property located in Mexico is Mexican-source income (LISR arts. 153 and 158). The tax is 25% of the income received, with no deduction for maintenance, HOA fees, property tax (predial) or management (art. 158).

If the tenant or other payer is in Mexico, the payer must withhold the 25% (art. 158).
If the person paying you is also a non-resident, you must pay the tax yourself by filing a return with the tax authorities within 15 days after receiving the income (art. 158).
You must issue a comprobante fiscal (the electronic invoice called CFDI) for the rent you receive (art. 158).
If the income comes through a fideicomiso, the trust bank (institución fiduciaria) issues the CFDI and makes the withholding (art. 158).

Estimate, as of 2026: on rent of 20,000 pesos a month, 25% is 5,000 pesos of ISR for that month, before any IVA or lodging tax. Your actual figures depend on your contract and on how the payment is made.

Residents: the rental regime

A Mexican tax resident who rents out real estate falls under the rental chapter of the LISR (arts. 114 to 118). The main points:

You can deduct actual expenses (predial, maintenance, water if you pay it, real interest on a loan for the property, salaries and fees, insurance and investment in construction) or instead take a flat deduction of 35% of the rent, plus predial (art. 115).
You make monthly provisional payments by the 17th of the following month; small landlords whose only income is rent below a threshold set in the law may pay quarterly (art. 116).
If the tenant is a company (persona moral), it must withhold 10% of the rent as a provisional payment and give you a CFDI showing it (art. 116).
You must register in the RFC, keep accounts, issue CFDI for the rent, and file provisional and annual returns (art. 118).
When the rent is received through a fideicomiso, the trust bank keeps the books, issues the CFDI and makes the provisional payments: 10% of the income of each four-month period, in May, September and January (arts. 117 and 118).

Airbnb and other digital platforms

For residents who earn income through a platform, the LISR has a separate section. The platform withholds ISR from the gross amount it collects for you, at 4% for lodging services (hospedaje) (art. 113-A, fr. II). For 2026 the Ley de Ingresos de la Federación raised the general platform rate for other goods and services to 2.5%, but the 4% lodging rate is unchanged (Ley de Ingresos de la Federación 2026, art. 25, fr. VI). If you do not give the platform your RFC, the withholding is 20% (LISR art. 113-C, fr. IV). Hosts whose platform income did not exceed 300,000 pesos the previous year may, subject to the conditions in the law, choose to treat the withholding as their final tax (art. 113-B).

For IVA, a foreign platform that collects the price for you must withhold 50% of the IVA charged to the guest, or 100% if you do not give it your RFC (Ley del IVA, art. 18-J, fr. II). In 2026 a platform that collects the price for you must withhold 100% of the IVA when you have it deposit your payouts to a bank account outside Mexico (Ley de Ingresos de la Federación 2026, art. 25, fr. IX). Individuals with platform income up to 300,000 pesos the previous year may, subject to conditions, opt to treat the IVA withholding as final (Ley del IVA, arts. 18-L and 18-M).

The platform sections of the LISR sit in the title for residents. For a non-resident host, the 25% rule of art. 158 is the starting point; how a given platform handles withholding for a non-resident is a point to settle with a Mexican accountant before you list the property.

IVA: long-term home rental vs furnished or short stays

Renting out real estate is subject to IVA at 16% (Ley del IVA, art. 1). Renting a property used only as a home (casa habitación) is exempt, but the exemption does not apply to property rented furnished or used as a hotel or guest house (art. 20, fr. II). In practice, an unfurnished long-term lease to a tenant who lives there is exempt; a furnished rental or vacation stays are not. When a non-resident without a permanent establishment rents to a person or company in Mexico, that tenant must withhold the IVA (art. 1-A, fr. III).

Baja California lodging tax

Baja California charges the Impuesto sobre Servicios de Hospedaje on temporary lodging received in the state, expressly including houses and apartments offered through apps and digital platforms (Ley de Hacienda del Estado de Baja California, art. 127). The guest owes it (art. 128); the host collects it and pays it monthly, by the 25th of the following month (art. 131), and must register in the state taxpayer registry (Registro Estatal de Causantes) (art. 132). When a platform collects the tax, the platform pays it and the host is released from those duties (art. 130). The 2026 rate is 5%, including stays booked through digital platforms, and 7% for motels (Ley de Ingresos del Estado de Baja California 2026, art. 6).

RFC and CFDI

Anyone who must file periodic returns or issue CFDI must register in the Registro Federal de Contribuyentes (CFF, art. 27). CFDI are issued through the SAT system (CFF, art. 29). For a non-resident landlord, getting an RFC and a way to issue CFDI is usually the first practical step, unless the property is in a fideicomiso and the trust bank handles it.

Renting a property you hold in a fideicomiso

A beneficiary of a restricted-zone fideicomiso can rent the property out. The law defines the use and enjoyment that these trusts give to foreigners as including the right to obtain income from the property, either through third parties or through the trust bank (Ley de Inversión Extranjera, art. 12). Read your own trust deed: it may require you to notify the bank or follow a procedure, and the bank may charge for issuing CFDI and handling withholdings.

Short-term rentals in Rosarito

Local permits and building rules for vacation rentals are a separate topic. Our guide to short-term rentals in Rosarito is published on rosaritolegal.com.

Tax rules and rates change every year. The figures in this article are as of 2026. Work with a Mexican accountant for registration and monthly filings, and coordinate with your home-country tax adviser on foreign tax credits and reporting.

How Galarza Legal can help

We draft and review leases and vacation-rental terms under Baja California law, check what your fideicomiso allows and what the trust bank requires, and coordinate with your Mexican accountant so the contract, the CFDI and the withholdings line up.

Frequently asked questions

How much tax does a non-resident pay on rent from Mexican property?

25% of the gross rent, with no deductions (LISR art. 158). The payer withholds it if the payer is in Mexico; if the payer is also a non-resident, you file and pay within 15 days of receiving the income.

Is a long-term lease subject to IVA?

Renting a property used only as a home is exempt from IVA, unless it is rented furnished or used as a hotel or guest house (Ley del IVA, art. 20, fr. II). Furnished and vacation rentals pay 16% IVA.

What is the lodging tax rate in Baja California in 2026?

5%, including stays booked through digital platforms, and 7% for motels (Ley de Ingresos del Estado de Baja California 2026, art. 6). The guest owes it; the host or the platform that collects it pays it to the state.

Can I rent out a property I hold in a fideicomiso?

Yes. The Ley de Inversión Extranjera (art. 12) includes obtaining income from the property through third parties or through the trust bank. Check your trust deed for any notice or procedure the bank requires.

General information about Mexican law as of the date shown; not advice on a specific case. Every figure is an estimate.