Mexico – Property Letting

How does the property letting process work in Mexico?

Mexico is a federal republic comprising 31 states, each of which maintains its own civil legislation governing relations between landlords and tenants as well as property ownership rights. Every state’s Civil Code contains specific rules on leases, property dealings, and ownership entitlements. This is perhaps the single most important point for foreign landlords to absorb: no unified national tenancy framework governs residential lettings across the country. Before embarking on the letting process, you must understand which state’s laws apply to your particular property.

Unlike countries such as Germany or France — where centralised national tenancy registers and standardised contract templates are the norm — Mexico’s rental market has long been informal and decentralised in character. In Mexico City, for instance, the market has historically operated with a high degree of informality, making it difficult for authorities to track how many homes are rented, who holds lease agreements, and what amounts have been agreed. Recent legislative reforms, particularly in the capital, are beginning to alter this picture.

The letting process broadly follows these steps:

1. Advertise the property. Landlords typically market their property through online portals such as Inmuebles24 or Lamudi, social media groups, or through local letting agents. Unlike certain other markets, there is no nationally mandated advertising standard or compulsory energy performance certificate requirement for residential rentals in Mexico.
2. Screen prospective tenants. Landlords routinely verify references, proof of income, and employment details. Credit reference agencies do exist in Mexico but are employed less consistently than in markets such as Canada or Germany.
3. Secure a guarantor or bond. Additional financial guarantees — such as institutional bonds or solvent personal guarantors — are commonly demanded. Unless the contract specifies otherwise, guarantor obligations expire at the end of the lease term. A fiador (a guarantor who owns real estate in Mexico) is a standard requirement throughout much of the country.
4. Draft and execute a written lease agreement. Rent levels in Mexico may be freely negotiated between the parties and then formalised in a Contrato de Arrendamiento (Contract of Lease). While verbal arrangements may carry some weight under common-law systems, Mexico operates under civil law, and a written, signed contract is essential for legal enforceability and access to judicial remedies.
5. Register with SAT and issue receipts. All landlords are obliged to enrol with the Tax Administration Service (SAT). Most engage an accountant to manage this. From the very first rental payment, landlords must issue electronic invoices known as CFDIs.
6. Register the lease (Mexico City only). Landlords in Mexico City are legally required to record their lease agreements in the government’s digital registry within 30 days of execution.

Residential leases typically run for one year, commercial and office leases commonly span two to five years, and industrial leases can extend from five to fifteen years. Renewal options are both feasible and routine. A well-prepared residential lease should contain clauses addressing the rent amount, permitted annual increases, deposit terms, responsibility for maintenance, subletting conditions, and notice requirements for termination. Lease contracts typically include provisions covering delivery and surrender of the premises, annual rent adjustments, maintenance obligations, security deposit conditions, liability for works, and insurance requirements.

What types of rental arrangements are available in Mexico — long-term, short-term, and holiday lets?

Mexico’s rental landscape divides broadly into three categories: long-term residential lets (usually twelve months or more), short-term furnished lets (ranging from a few days to several months), and vacation or holiday rentals through platforms such as Airbnb, VRBO, or Booking.com. Each carries distinct regulatory and tax consequences that landlords must weigh carefully.

Long-term residential rentals are generally the most straightforward route for foreign investors, typically involving one to two-year agreements. They tend to offer stable tenant relationships and reliable monthly cash flow. Long-term unfurnished lets are ordinarily governed by the relevant state Civil Code, and no VAT is charged on purely residential rent.

Vacation properties — particularly in tourist destinations such as Cancún, Puerto Vallarta, and Tulum — frequently operate as short-term rentals through platforms like Airbnb or via direct bookings. The short-term rental sector has come under increasingly close regulatory scrutiny, especially in cities where platform-based letting has expanded rapidly. Mexico City is at the forefront of this trend, introducing mandatory registries for hosts and platforms alongside limits on annual rental occupancy.

Since 2024, the Government of Mexico City has amended several legal provisions to regulate short-term rentals, particularly those offered through digital platforms such as Airbnb. In April 2024, an amendment to the Tourism Law of Mexico City gave rise to the Host Registry — a mandatory scheme requiring all individuals and legal entities offering short-term rental services to register.

In October 2024, Mexico City introduced further amendments restricting the annual occupancy of properties used for short-term letting. Under these rules, properties listed on the Host Registry may not be occupied for more than 50% of the year, whether in a single continuous period or spread across the calendar. Hosts must submit a biannual occupancy report to the Ministry of Tourism. Where the occupancy ceiling is breached, registration will not be renewed and the property becomes eligible for re-registration only one year after the refusal.

The same amendments prohibit the use of social housing, affordable housing, or reconstruction-programme properties for short-term rental purposes. Beyond Mexico City, regulation of short-term lets is still evolving, and requirements differ considerably by municipality. Always verify the position with your local authority before advertising a property on any short-term rental platform.

What rental income can landlords expect in Mexico, and how are rates set?

Rent levels in Mexico are freely negotiated between landlord and tenant. Across most of the country, market rates are determined by supply and demand alone, with no imposed price controls. Mexico City, however, has introduced meaningful restrictions on annual rent increases that every landlord in the capital must observe.

On 28 August 2024, Mexico City’s Official Gazette published a decree amending Articles 2448 D and 2448 F of the Civil Code for the Federal District. Previously, monthly rent could not be raised by more than 10% of the agreed amount. The amended provision now states that “the rent increase shall never be greater than the inflation rate reported by the Bank of Mexico for the previous year, relative to the agreed monthly rent amount.”

Mexico City’s 2024 reform therefore ties all residential rent increases to the Bank of Mexico’s reported annual inflation figure. This change ended the practice of landlords imposing large discretionary increases — which in sought-after districts such as Roma Norte and Condesa had previously reached 20–30% per year. For investors, this means income growth is now predictable but constrained to the rate of inflation, which averaged 4.2% in 2024. The provisions apply to all residential leases entered into after January 2024, with existing leases transitioning to the new system upon renewal.

Across Mexico broadly, residential properties typically yield 5–8% of their purchase price annually. A condominium purchased for USD 200,000 in Mexico City might be expected to generate between USD 10,000 and USD 16,000 per year. Coastal destinations such as Tulum and Puerto Vallarta can achieve higher yields owing to the premium commanded by vacation rentals. Rental income varies considerably within individual cities — properties in Mexico City’s Polanco neighbourhood, for example, command rents 40–60% higher than comparable units in outer districts.

Outside Mexico City, rent control is not uniformly applied across all 31 states, though certain states maintain their own provisions. In 2025, rent adjustments in many states are expected to align with official inflation indices, and some states require that written notice be given to the tenant in advance of any increase. Always confirm the rules applicable to your property’s location with a local lawyer or the relevant municipal authority, as figures and caps can change. The SAT website and the applicable state Civil Code are the primary authoritative references.

Do landlords need to provide a furnished or unfurnished property in Mexico?

No blanket legal obligation exists in Mexico requiring landlords to furnish a residential rental property. Both furnished and unfurnished lettings are widespread, and the choice is principally shaped by the intended tenant market. However, the question of whether a property is furnished carries significant tax implications that landlords should consider carefully before deciding.

Letting a furnished property triggers an additional 16% VAT (IVA), which considerably reduces net income relative to an unfurnished letting. IVA applies to accommodation in hotels, guesthouses, and furnished homes made available for rent. The rate is 16% throughout the entire country (as of 2025). Accordingly, if you let a furnished apartment — whether on a long-term or short-term basis — the rent attracts this consumption tax, which the landlord must collect from the tenant and remit to SAT.

Unfurnished long-term residential lets are generally exempt from IVA, making them a more tax-efficient structure for many landlords. In practice, properties aimed at the long-term residential market — particularly those targeting local professionals or families — are commonly let unfurnished or partly furnished, while properties in tourist zones or marketed to short-stay visitors tend to be offered fully furnished.

Where a furnished property is let, landlords should compile a detailed inventory of all contents at the start of the tenancy. Current legislation maintains the landlord’s obligation to return the deposit in full provided no outstanding rent arrears or property damage exist. Documenting the condition of the property with a signed inventory and photographic evidence is essential and will protect both parties if a deposit dispute arises at the end of the tenancy.

Do you need a licence or registration to let a property in Mexico?

There is no single national landlord licence that must be obtained to let a residential property in Mexico. That said, several overlapping registration and compliance requirements exist depending on the landlord’s residency status, the type of property being let, and its location — and failing to comply with any of them can have serious consequences.

Registration with SAT (the Tax Administration Service) for tax purposes is a universal requirement applying to both resident and non-resident landlords alike. Non-compliance may result in financial penalties, loss of access to court remedies in rent disputes, and — in serious cases — forced sale of the property.

Immigration status affects what registration steps are open to you. A tourist visa does not permit income-earning activity in Mexico; tourists may not act as landlords. A Temporary Resident who registers with SAT as a landlord must apply at once for a work permit (Permiso Para Trabajar) — there is no 90-day grace period for this step. A Permanent Resident may operate as a landlord and must register with SAT while also notifying Immigration, for which a 90-day window does apply. Non-resident foreign landlords who remain outside Mexico and do not hold residency status operate under the standard 25% withholding tax regime without needing formal SAT registration beyond basic property documentation.

For short-term and holiday lets in particular, further registration obligations exist in certain cities. Mexico City’s April 2024 amendment to the Tourism Law created the Host Registry, making enrolment mandatory for all individuals and entities offering short-term rental services. Beyond SAT tax and immigration requirements, a landlord using Airbnb or a similar platform in Mexico City must also register with the city. Requirements for short-term rentals in other states and municipalities continue to evolve — always consult your local municipio before listing a property on any platform.

In Mexico City, as of August 2024, landlords of residential properties must also register their lease agreements in a new government digital registry. This is a registration of the lease contract itself rather than a personal landlord licence, but it is a binding legal obligation for anyone letting residential property in the capital.

How do you register as a landlord or obtain required approvals in Mexico?

The registration process involves several concurrent steps relating to tax enrolment, immigration status (for foreign residents), and — where relevant — local lease or short-term rental registration. The following is a general guide; the precise requirements depend on your location and residency status. Always confirm current procedures with a qualified Mexican accountant (contador) or lawyer, as processes and fees are subject to change.

1. Establish your immigration status. Determine whether you hold tourist status, Temporary Residency, Permanent Residency, or are a non-resident abroad. Your immigration category dictates which registration pathways are available to you. Only Temporary and Permanent Residents can formally enrol as landlords with SAT and access the deductions available to tax residents.
2. Obtain a CURP (if resident). The Clave Única de Registro de Población (CURP) is a personal identification number comparable in purpose to a National Insurance number in the UK or a Social Security Number in the United States. It is required for most formal registration procedures in Mexico.
3. Register with SAT and obtain an RFC number. Visit a SAT (Tax Administration Service) office to obtain both your RFC number — your taxpayer identification number, analogous to a tax file number in Australia — and your CURP. Registration can sometimes be completed online, though foreign nationals often find the in-person process more straightforward. Engaging a local accountant to assist with the documentation is strongly advisable.
4. Establish CFDI (electronic invoice) capability. Landlords are required to report rental income and issue CFDIs (Digital Tax Receipts) for every payment received. Your accountant will typically configure this system on your behalf.
5. Apply for a Work Permit (Temporary Residents only). If you hold Temporary Residency and are registering as a landlord, apply without delay at the National Immigration Institute (Instituto Nacional de Migración, INM) for a Permiso Para Trabajar.
6. Register your lease in Mexico City (if applicable). Landlords in Mexico City must enter their lease agreements into the government’s digital registry within 30 days of execution. Landlords with existing agreements were required to register them within 90 days of the decree’s effective date. Consult the Mexico City government website for the current portal address and procedure.
7. Enrol on the Host Registry (short-term lets, Mexico City). If you offer short-term rentals through platforms such as Airbnb, register with the Mexico City Host Registry via the Ministry of Tourism (SECTUR CDMX). If your property is outside Mexico City, check the relevant state or municipal tourism office for equivalent requirements.
8. Pay annual property taxes (predial). Annual municipal property taxes — known as impuestos predial — are levied on your property and must be kept current. These are generally paid at the local municipal office or through an online payment portal.

No widely published national fee schedule exists for landlord-specific registration as of 2025. Check directly with SAT and your local municipality for any administrative charges that may apply, as these differ by location and are subject to periodic revision.

What are the rules around deposits in Mexico?

The Civil Code requires that any agreed guarantees be included in the lease contract, but it does not set a maximum deposit amount at the national level. In practice, a one-month security deposit is the most common arrangement when signing a residential lease. Unlike countries such as the UK and Ireland — where statutory tenancy deposit protection schemes oblige landlords to hold deposits in a government-backed custodial account — Mexico has no equivalent national deposit protection mechanism. Deposits are typically retained directly by the landlord.

Lease contracts commonly stipulate that the tenant may not apply the security deposit against the final month’s rent. This is an important clause to include explicitly rather than leaving it implied. The landlord is not required to return the deposit until the tenant has handed back the property in an acceptable condition — allowing for ordinary wear and tear — and until all utility bills for which the tenant bears responsibility have been settled in full.

In Mexico City, the 2024 housing reforms introduced a defined deadline for deposit returns. Landlords must refund security deposits within 30 days of the end of the tenancy, provided the property is in satisfactory condition and no rent arrears exist. This deadline is strictly enforced under the 2024 reforms. The return process requires a joint inspection during which both parties record any damage attributable to the tenant beyond normal use.

Deductions from the deposit may only cover the actual costs of damage caused by the tenant, excessive cleaning requirements, or unpaid utility charges. If a landlord fails to return the deposit within the 30-day window without valid grounds, tenants may lodge a complaint with the Tenant Ombudsman Office and may be entitled to additional compensation equivalent to the deposit amount.

Both at the start and end of every tenancy, landlords should document the property’s condition thoroughly through a signed inventory and timestamped photographs. Maintaining clear records of all transactions and issuing receipts is equally important. Outside Mexico City, the conditions and timelines governing deposit returns are set by the relevant state Civil Code — obtain local legal advice for specifics. The SAT website and your local PROFECO (Procuraduría Federal del Consumidor) office are useful reference points for consumer and tenant rights information.

Who is responsible for maintenance and repairs in Mexico?

Mexican law draws a clear line between structural and major repairs — which fall to the landlord — and routine day-to-day maintenance, which is generally the tenant’s responsibility. Repairs required to preserve the property, ensure its proper functioning, or maintain its safety must be carried out by the landlord, unless the damage in question resulted from the tenant’s own negligence or from the normal wear and tear of ordinary use.

Keeping a rental property in good repair is not only fundamental to the safety and comfort of tenants but is also a legal obligation imposed on landlords. Tenants are expected to report defects within a reasonable time, and landlords are required to address such concerns promptly. By ensuring that essential services — including plumbing, electrical systems, and structural elements — remain in working order, landlords fulfil their obligations under the law.

This division of responsibility broadly mirrors the approach taken in many civil-law countries across continental Europe, where structural liability rests firmly with the owner. Unlike some common-law jurisdictions where contractual terms and judicial precedent can substantially reshape the allocation of repair duties, Mexico’s civil-law framework establishes a baseline in the Civil Code that cannot simply be overridden by contract when it comes to fundamental habitability requirements. Landlords should verify that their property meets basic habitability standards before any tenancy commences.

For appliances and white goods, responsibility depends on what the lease agreement specifies. Where a landlord provides appliances as part of a furnished let, it is advisable to state in the contract who is responsible for servicing and replacing them if they fail. In practice, the failure of major appliances is often treated as a landlord responsibility, while consumable items and minor damage attributable to the tenant are the occupant’s concern.

Where disputes over repairs cannot be resolved between the parties, either side may seek resolution through local conciliation and arbitration boards — known as Juntas de Conciliación y Arbitraje — or through the civil courts. Mediation is increasingly encouraged as a first step before litigation, particularly in Mexico City following the 2024–2025 legislative reforms.

How are letting agents used in Mexico, and what do they charge?

Letting agents and property management companies occupy an important position in Mexico’s rental market, especially for foreign landlords who are not physically present in the country. They can manage the entire process — from advertising and tenant selection through to rent collection, maintenance coordination, tax withholding, and regulatory compliance.

Property management companies routinely handle compliance obligations on behalf of foreign landlords, charging 8–12% of rental income for a full-service package that includes legal and tax compliance (as of 2025). This range is broadly comparable to full-management fees in markets such as Spain or Portugal, though — unlike the UK, where legislation places limits on certain fees charged to tenants — Mexico has no nationally standardised or legally capped agent fee structure.

Tenant-finding fees (as distinct from ongoing management) are typically equivalent to one month’s rent, paid by the landlord. Practices do, however, vary between agents and cities, and there is no regulatory body setting universal fee standards comparable to, for example, RICS-accredited property managers in the UK or the commission structures overseen by real estate boards in Australia.

When selecting a letting agent or property manager, look for membership of AMPI (Asociación Mexicana de Profesionales Inmobiliarios), the national association for real estate professionals. AMPI members are bound by a code of ethics, although membership remains voluntary rather than a legal prerequisite to practice.

For foreign landlords managing a property from overseas, a full-service management company capable of handling SAT tax obligations, issuing CFDIs, and liaising with tenants on your behalf is the most practical solution in most cases. Obtain current market rates and verify any applicable local regulations directly with agents. For consumer protection queries, PROFECO is the relevant body. Always insist on a written management agreement before engaging any agent or management company.

What taxes apply to rental income in Mexico?

Anyone generating income in Mexico — whether resident or not — is required to pay tax on it. This obligation encompasses both short-term and long-term lettings of real estate situated in the country. For vacation rentals listed on platforms such as Airbnb or Booking.com, income must be declared to the Mexican Tax Authority (SAT) even if you live outside Mexico. It would be a serious mistake to assume that directing rental payments to a bank account in another country removes your Mexican tax liability. Any property located in Mexico that generates rental income is subject to Mexican taxation, regardless of which country the rent is paid to or in which bank account it is held.

Non-resident landlords (as of 2025): Mexican law imposes a 25% withholding tax on the gross rental income of all non-resident foreign landlords. This withholding takes place before you receive payment, whether it is managed by the tenant directly or through a property management company. Non-resident foreign landlords taxed under the 25% withholding regime are not permitted to deduct any expenses against their rental income. This prohibition covers maintenance costs, utility bills, homeowners’ association fees, property management charges, insurance premiums, and repair expenses. The 25% rate is confirmed by the official SAT guidance for foreign taxpayers.

Foreign corporations (as of 2025): Foreign companies owning rental property in Mexico are subject to a 30% flat tax on rental income. Some investors choose to hold properties through a Mexican corporation (Sociedad Anónima), but this route involves considerable legal complexity and ongoing compliance requirements.

Tax-resident landlords (as of 2025): Foreign nationals who obtain the appropriate visa status and establish Mexican tax residency may register as individuals with business activity, gaining access to expense deductions and progressive income tax rates ranging from 3% to 30%. Mexican tax residents registered in this way may deduct legitimate rental-related expenses including property management fees, maintenance and repair costs, condominium or homeowners’ association fees, property insurance, utilities paid by the landlord, and professional fees for accounting or legal services.

VAT (IVA): Furnished rentals attract a further 16% VAT, substantially reducing net income relative to unfurnished lets (as of 2025). The landlord is responsible for collecting this tax from the tenant and remitting it to SAT.

CFDI electronic invoices: Landlords must report rental income and issue CFDIs (Digital Tax Receipts) for every payment received. SAT has strengthened its monitoring mechanisms in 2025, making timely and accurate compliance more important than ever.

State hospitality taxes: A state-level hospitality tax applies to commercial accommodation. Revenue from this tax is directed towards tourism promotion within each state and typically amounts to two to three percent of the nightly accommodation cost. This levy applies principally to operators of short-term and vacation rentals.

The tax rules governing foreign nationals in Mexico are complex, and the penalties for non-compliance can be severe. Seek advice from both a qualified Mexican contador and — depending on your country of residence — a cross-border tax specialist, to ensure you understand your obligations in both jurisdictions. The official SAT website (sat.gob.mx) is the authoritative source for current rates and thresholds.

What are the rules around ending a tenancy or evicting a tenant in Mexico?

Mexican tenancy law is notably protective of tenants — particularly with regard to eviction procedures, automatic lease renewals, and rent controls in certain jurisdictions. For foreign landlords, this is one of the most consequential practical considerations: recovering possession of a property from an established tenant in Mexico is a slow and potentially costly process, more so than in many comparable jurisdictions around the world.

Property legislation generally favours the tenant, making it difficult for landlords to recover their property when a lease expires. If a landlord wishes to bring a tenancy to an end, they must serve notice within the required period before the lease expires; otherwise, the tenancy automatically converts to an indefinite-term arrangement. If the tenant does not vacate the property voluntarily after the lease has ended, the landlord must pursue a formal legal process in which a judge issues an eviction order. If the tenant disregards that order, the landlord may request police assistance to enforce it.

Most state Civil Codes provide the tenant with a statutory right to a one-year extension where rent payments are up to date. If the tenant continues to occupy and use the property after the lease term without any objection from the landlord, the tenancy will be treated as having continued on an indefinite month-to-month basis.

In straightforward cases — where the tenant mounts no defence — the entire process from initiating proceedings to enforcing a final judgment and obtaining vacant possession may still take around a year. In contested or complex cases, proceedings can extend to several years. This stands in contrast to countries such as the Netherlands or Belgium, where accelerated eviction procedures for non-payment of rent are more readily accessible to landlords.

Neither the death of the tenant nor the death of the landlord extinguishes the lease agreement. The spouse, partner, children, and other relatives of a deceased tenant who were living in the property during the tenant’s lifetime retain the right to remain under the existing lease terms. This provision cannot be waived in the case of residential tenancies.

In lease agreements that have continued beyond one year on an indefinite basis, either party may bring the tenancy to an end by giving written notice to the other party at least 30 days before the intended termination date. In cases of rent arrears, a court application remains the required means of seeking eviction. In 2025, early mediation is being more actively encouraged as a means of expediting resolution.

Foreign landlords should incorporate realistic eviction timelines into their investment planning and consider taking out specialist landlord legal expense insurance. Always obtain advice from a qualified Mexican attorney before attempting to end a tenancy or commencing eviction proceedings.

What should expat landlords know about managing property remotely in Mexico?

Running a rental property from abroad introduces a distinct set of legal, tax, and practical obligations in Mexico. Understanding these requirements before you leave the country — or before your first tenant takes up occupation — can prevent considerable difficulty further down the line.

Tax withholding responsibilities: Where the landlord resides outside Mexico, responsibility for withholding and remitting the tax component of the rent falls either to the tenant or to the Mexican letting agent or accountant managing the property, depending on who collects the rent. If rent is paid directly to the landlord in another country, it is the tenant who must withhold and submit the tax. Whoever performs the withholding must remit the amount to SAT no later than the 17th day of the month following the month in which the deduction was made. Non-resident landlords should ensure that either their property manager or their tenant is clearly identified in the lease or management agreement as bearing this responsibility, since failure to withhold and remit can expose both parties to liability.

Power of attorney: For landlords based abroad, it is strongly advisable to grant a trusted person in Mexico — ideally a property manager, accountant, or lawyer — a poder notarial (notarised power of attorney). This authorises them to act on your behalf when signing documents, dealing with government authorities, handling any legal proceedings, and managing day-to-day landlord responsibilities, without requiring you to travel to Mexico each time an issue arises.

Property management: Property management companies regularly handle compliance obligations on behalf of non-resident foreign landlords, charging 8–12% of rental income for a comprehensive service that includes legal and tax compliance (as of 2025). For remote landlords, this arrangement is often the most workable solution. Ensure that any management agreement explicitly covers tax withholding, CFDI issuance, lease registration, and maintenance coordination.

Repatriation of rental income: Mexico does not impose currency controls that specifically restrict the transfer abroad of rental income, and funds can generally be remitted through the Mexican banking system. However, both your Mexican bank and the receiving institution in your home country may ask for documentation establishing the source of the funds. Keep thorough records of all rent payments, tax receipts, and bank transfers.

Where SAT detects a landlord receiving rental income without paying and declaring the applicable tax, it may conduct an audit reaching back up to five years. SAT officers actively monitor social media platforms and vacation rental websites — including Facebook groups and Airbnb listings — to identify undeclared rental activity across Mexico. The message for overseas landlords is unambiguous: compliance is not optional, and the tax authority actively searches for non-compliant operators through online channels.

Always engage a Mexican tax lawyer or accountant with specific experience advising non-resident foreign property owners. The official SAT portal at sat.gob.mx provides guidance on obligations for overseas residents (in Spanish), and Mexico’s National Immigration Institute at gob.mx/inm covers residency and work permit requirements.

Frequently asked questions

Can a non-resident own and let property in Mexico?

Yes. Foreign nationals may legally own and let property in Mexico, including within restricted coastal and border zones through a fideicomiso (bank trust structure). Non-resident landlords face a 25% withholding tax on gross rental income with no expense deductions permitted (as of 2025). All rental income derived from Mexican property is subject to Mexican taxation regardless of where the landlord lives or where the rent is received. Consult SAT and a Mexican tax adviser to clarify your specific obligations.

Do I need a local agent to let my property in Mexico?

There is no legal obligation to use a letting agent, but for non-resident landlords it is strongly recommended. A local property manager can take care of tenant screening, rent collection, SAT tax withholding, CFDI issuance, lease registration (mandatory in Mexico City from August 2024), and maintenance coordination. Comprehensive full-service management typically costs 8–12% of monthly rental income (as of 2025).

How long does a standard residential lease last in Mexico?

The standard term for a residential lease is one year, though longer or shorter terms can be agreed between the parties. If the lease expires and the tenant continues to occupy the property without any objection from the landlord, the tenancy automatically becomes an indefinite month-to-month arrangement. Most state Civil Codes set a maximum residential lease term of 10 years.

Is there rent control in Mexico?

In Mexico City, as of August 2024, all residential rent increases are capped at the prior year’s inflation rate as measured by the Bank of Mexico. This replaced the former ceiling of 10% per year. Outside Mexico City, rent control provisions vary by state. In 2025, most states require that rent increases align with official inflation indices. Check the Civil Code of the relevant state for the rules applicable to your property.

What taxes do I pay on rental income as a non-resident landlord in Mexico?

Non-resident individual landlords pay a flat 25% withholding tax on gross rental income with no expense deductions permitted (as of 2025, per SAT). Furnished properties and short-term lets also attract 16% IVA (VAT). Short-term rental operators may additionally owe state hospitality taxes of approximately 2–3% per night. Foreign corporations owning rental property are taxed at a flat rate of 30%. Always verify current rates directly with SAT at sat.gob.mx and seek advice from a qualified Mexican tax adviser.

What is a fiador and do I need one?

A fiador is a guarantor — typically a Mexican property owner — who undertakes to meet the tenant’s rent obligations should the tenant default. Demanding a fiador is standard practice throughout Mexico and gives landlords an additional legally enforceable layer of security beyond the deposit. A landlord cannot be compelled to accept a tenant without a fiador if the lease requires one, although alternatives such as institutional rental bonds are available.

How hard is it to evict a non-paying tenant in Mexico?

Eviction in Mexico must follow a court process and can be protracted. If a tenant declines to leave voluntarily after receiving proper notice, the landlord must obtain a judicial eviction order — a step that, even in uncomplicated cases of non-payment, can take a year or longer. In contested cases, proceedings may run for several years. Mexico City’s 2024–2025 reforms encourage mediation as a preliminary step. Foreign landlords are strongly advised to invest in rigorous tenant screening and to take legal advice before initiating any eviction process.

Do I need to register my lease in Mexico City?

Yes. From August 2024, landlords of residential properties in Mexico City are required to register all new lease agreements in the government’s digital registry within 30 days of signing. Existing leases were required to be registered within 90 days of the decree coming into force. This obligation applies to all residential landlords, including foreign nationals. Short-term rental hosts in Mexico City must additionally register separately on the Host Registry established under the April 2024 amendment to the Tourism Law. Consult the Mexico City government website at cdmx.gob.mx for the current registration portal and guidance.