The majority of real estate buyers in Mexico, especially foreigners, purchase property to rent out or for family vacations. Before buying for the rental business, few people think about the upcoming expenses, paying attention only to the initial cost and future income, which is a mistake.
Here, I will try to outline the necessary steps and the real cost of maintenance as simply, clearly, and concisely as possible, and you can decide for yourself how profitable and convenient it is.
At first glance, renting out an apartment is a great way to earn income. But in order for this process to be legal and safe, it is important to establish a good relationship with the tax service (SAT) from the very beginning and to consider key aspects: taxes, documents, and accounting expenses.
So, let's break it down from the perspective of a foreign owner.
1. Taxes (Impuestos)
The entire tax system in Mexico has undergone significant changes since January 1, 2026, but we will focus on real estate.
As a foreign landlord, you pay two main taxes: income tax (ISR) and value added tax (IVA).
1.1. Tax regimes (Regímenes Fiscales)
First, you need to register with the SAT by choosing one of two regimes:
· Régimen de Arrendamiento (Rental Regime, code 606) - the classic regime for renting out real estate.
You calculate and pay taxes yourself and can apply numerous deductions when purchasing the necessary services and goods used in your business.
· RESICO (Régimen Simplificado de Confianza) - a simplified regime for small businesses.
It is available if your annual income does not exceed 3.5 million pesos (peso to dollar exchange rate). It features lower effective tax rates but fewer deductions.
RESICO is usually more advantageous for renting housing, but the choice depends on your expenses and income.
1.2. Tax and withholding rates from 2026
If you rent out your property through platforms such as Airbnb or Vrbo, they act as your tax agents and withhold part of the taxes automatically. The method of receiving money, to a Mexican or foreign account, has a critical impact on the amount of withholdings.
Option A: You rent out your apartment through a platform (Airbnb, Vrbo)
Here's how the rules have changed since January 2026:
Your status, where the money goes, ISR (income tax) withholding, IVA (VAT) withholding:
Individual with RFC - to an account in Mexico 4% 8% (you pay the remaining 8% yourself)
Individual with RFC - to a foreign account 4% 16% (fully withheld)
Legal entity with RFC - to an account in Mexico 2.5% (new rule) 8%
Without RFC - any 20% (maximum) 16%
RFC is your tax number, which you can get by registering online (link).
· Important consequence: If you receive money to a foreign account (for example, in the US, Europe, or any other country), the platform will withhold all VAT (16%). This can create a cash gap, as you will have an overpayment of tax that will have to be refunded through SAT (a complicated procedure).
In this case, our accountants recommend receiving payments to a Mexican bank account so that you can keep part of the VAT to cover your expenses.
Option B: You handle the rental yourself, without listing the property on third-party platforms.
In this case, you issue invoices (facturas) yourself, according to the payments received, and pay taxes.
· ISR (income tax): Paid monthly (provisional) on a progressive scale - from 1.92% to 35% (yes, the difference is significant).
In the classic mode (Arrendamiento), you pay tax on net profit - income minus allowable deductions.
In RESICO, the rate is fixed from gross income, which greatly simplifies accounting.
· IVA (VAT - 16%): You are required to charge 16% on the rental amount and transfer it to the budget monthly. However, residential property rentals (casa habitación) by individuals are exempt from VAT. If you rent out residential property, you do not have to pay VAT. If you rent out commercial property (office, warehouse), you must pay VAT.
1.3. Local tax (Impuesto Predial)
Impuesto Predial is a property tax. All owners
pay it once a year or once every two months.
The amount depends on the assessed value (valor catastral) and the municipality. It is usually a moderate amount compared to other countries or utility bills (for example, the increase in 2026 was 2.5-4%). This tax can be fully deducted from the ISR base, i.e., included in your expenses and paid on the difference.
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2. How much does an accountant (Contador) cost?
The cost of an accountant's services in Mexico depends on the region, the complexity of the accounting, and the number of transactions. It also depends on whether the property is registered to an individual or a legal entity.
In general, there are standard rates on the market that do not vary greatly from region to region. Of
course, it makes no sense to hire an accountant who will only deal with your affairs; it will be more economical to hire a company or a specialist with a fixed monthly fee (tarifa fija). This will allow you to plan your budget accurately and save a lot of money on taxes.
Approximate cost of services:
· Basic service: For an individual with one apartment for rent, preparing monthly and annual tax returns will cost around $1,500 - $3,000 pesos per month. This price may include optimization advice and tax calculations.
· Extended service: If you have multiple properties or own property through a company, the cost can start at $5,000 pesos per month and above, but this cost is well compensated by savings on overpaid taxes or penalties.
3. Documents (Documentos necesarios)
To legally rent out your property, you need to obtain a Mexican tax number and a properly drafted contract (this refers to long-term rentals of more than six months).
3.1. Immigration documents and tax numbers
1. Temporary or permanent residence (Residente Temporal or Residente Permanente): This
is your basis. After entering the country on a visa, you must submit documents to the INM within 30 days to obtain a plastic card.
Without it, you cannot work legally (and renting out property is an economic activity). 2
. CURP (Clave Única de Registro de Población) is your 18-digit identification code. It is generated automatically when you obtain residency. You can check and print it on the official website - https://www.gob.mx/curp/.
3. RFC (Registro Federal de Contribuyentes) is your tax number. Without it, you cannot legally rent out your property. To obtain it, you need to make an appointment with the SAT through the system https://citas.sat.gob.mx/. You must bring your passport, resident card, CURP, and proof of
address (this can be a water, electricity, or internet bill) to the appointment.
3.2. Rental agreement (Contrato de Arrendamiento)
The contract must be in Spanish or in two languages: Spanish and the language of the landlord/tenant.
It can be difficult for foreigners to find a guarantor (aval), so there are alternatives on the market:
· Póliza Jurídica - insurance that covers the landlord's risks (non-payment, damage). This is a standard and convenient replacement for a guarantor.
· Deposit - usually a deposit of 1-2 months' rent.
· An experienced real estate agent who will take a commission but will help with all the paperwork.
What should be in the contract:
· Details of the parties (including RFC).
· Description of the property and its condition at the time of transfer.
· Rent amount, payment date, late fees.
· Term and renewal conditions.
· Distribution of utility bills (who pays for electricity, water, gas, internet).
· Terms of early termination and security deposit amount.
Brief summary to start the process
1. Obtain a resident card (INM) → Obtain a CURP (online) → Register with SAT and obtain an RFC.
2. Open a bank account with a Mexican bank (this will simplify rental taxes through platforms).
3. Choose a regime (Arrendamiento or RESICO) and find an accountant (contador).
If you are renting through Airbnb/Vrbo, make sure your RFC and Mexican account are specified in the settings.
4. Prepare a Spanish-language rental agreement (if you are renting yourself). If you are renting to expats, look into Póliza Jurídica insurance instead of a guarantor.
This is general information that may vary slightly depending on the state and city.
I recommend contacting us and we will provide you with an experienced accountant who will help you with RFC registration and a lawyer for your first contract. We will
also advise you on obtaining a residence permit.
Call or write to us.
We speak Spanish, English, and Russian.
+529842413992
