Countries › Mexico › Guide › 11. Real estate and land › Local property taxes: municipal property tax (predial) and real estate acquisition tax, with Nuevo León as a worked example

Local property taxes: municipal property tax (predial) and real estate acquisition tax, with Nuevo León as a worked example

Last verified: 2026-10-26 · Status: Stable

Property tax and the tax on acquiring real estate are local: the Constitution reserves to municipalities the taxes states set on property, its subdivision, transfer and improvement, based on unit land and construction value tables approved by state legislatures. Federal law cannot exempt them, and they interact with federal income tax: property tax is deductible against rent and the local transfer tax paid by the seller is deductible from the gain. In Nuevo León (Monterrey) the acquisition tax is 3 percent of the higher of price and cadastral value and property tax is 2 per thousand a year of cadastral value, plus 2 per thousand for vacant lots.

USD conversions use MXN 18.6638 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 23 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Legal conversions in Mexico use the Banxico FIX, which differs slightly. Conversions are for orientation only.

Key facts

Real estate acquisition tax rate, Nuevo León municipalities	3 %Ley de Hacienda para los Municipios de Nuevo León art. 28 bis, as of 2026-10-26 · in force
Annual property tax rate on cadastral value, Nuevo León municipalities	2 per thousandLey de Hacienda para los Municipios de Nuevo León art. 21 bis 8, as of 2026-10-26 · in force

The rule

1. Who taxes property. Municipalities receive the contributions, including additional rates, that states set on real estate, its subdivision, division, consolidation, transfer and improvement, and those based on changes in property value. Federal laws may not limit states' power to set them or grant exemptions; state laws may not grant exemptions or subsidies to anyone; only public domain property of governments is exempt unless used by private parties or state companies for other purposes. Municipal councils propose rates and the unit value tables for land and construction to the state legislature.
Cost to do it: Rates vary by state and municipality.Constitución Política de los Estados Unidos Mexicanos art. 115, section IV, item a) and paragraphs reformed DOF 23 December 1999 and 29 January 2016, Constitution art. 115, section IV, 1999-12-23 official text · verified 2026-10-26

2. Federal income tax interaction. Landlords may deduct the year's property tax and local improvement contributions from rental income, also when using the 35 percent blind deduction. Sellers may deduct notary fees, taxes and duties on the purchase and sale deeds and the local tax on income from sales of real estate.
Cost to do it: Deduction, not a cost.Ley del Impuesto sobre la Renta arts. 115 and 121, section III, LISR arts. 115 and 121, 2013-12-11 official text · verified 2026-10-26

3. Nuevo León example: acquisition tax. Individuals and companies acquiring land, or land with buildings, in Nuevo León pay the real estate acquisition tax at 3 percent of the taxable value, which is the higher of the transaction value and the cadastral value. A first home buyer who owns no other real estate in the state and buys a property within 30 annual quotas pays 3 percent after reducing the value by 15 annual quotas. The text published by the Nuevo León Congress lists its last reform as Periódico Oficial 25 January 2023.
Cost to do it: 3 percent of the higher of price and cadastral value.
Example: A house in San Pedro Garza García bought for MXN 4,000,000 with a cadastral value of MXN 3,000,000 pays acquisition tax of MXN 120,000. / Price about USD 214,319; tax about USD 6,430.Ley de Hacienda para los Municipios del Estado de Nuevo León, P.O. 28 December 1974, arts. 28 bis (reformed P.O. 30 December 2016) and 28 bis 1, Arts. 28 bis and 28 bis 1, 2016-12-30 official text · verified 2026-10-26

4. Nuevo León example: property tax. Property tax is computed on the cadastral value determined under the Cadastre Law at 2 per thousand a year; vacant lots pay an additional 2 per thousand. Changes in cadastral value apply from the following two month period.
Cost to do it: 2 per thousand of cadastral value a year (4 per thousand for vacant lots).
Example: A home with a cadastral value of MXN 3,000,000 pays MXN 6,000 a year; a vacant lot of the same value MXN 12,000. / About USD 321 and USD 643 a year.Ley de Hacienda para los Municipios del Estado de Nuevo León arts. 21 bis 5, 21 bis 7 and 21 bis 8 (reformed P.O. 30 December 2004), Arts. 21 bis 7 and 21 bis 8, 2004-12-30 official text · verified 2026-10-26

Worked example

A company buys a warehouse in Apodaca, Nuevo León, for MXN 20,000,000 (about USD 1,071,593) with a cadastral value of MXN 16,000,000. Acquisition tax is 3 percent of MXN 20,000,000, MXN 600,000 (about USD 32,148), collected through the notary. Annual property tax on the MXN 16,000,000 cadastral value is MXN 32,000 (about USD 1,715).

Step by step

1. Identify the state and municipality and obtain its current fiscal law and annual revenue law.
2. Get the cadastral value from the municipal cadastre before pricing the deal.
3. Budget acquisition tax on the higher of price and cadastral value where the state uses that base.
4. Confirm the seller is current on property tax and water before signing; notaries usually require receipts.
5. Deduct property tax from rental income and local deed taxes from the sale gain (LISR arts. 115 and 121).

Common traps

Using one state's rates elsewhere: each state and municipality sets its own; Nuevo León figures are only an example.
Under declaring the price: the base is often the higher of price and cadastral value.
Unpaid property tax follows the property in practice; check receipts before closing.
Vacant land can carry surcharges, as in Nuevo León (art. 21 bis 8).

Sources

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