When a foreigner who is not a Mexican tax resident sells a condo in Cancún, Mexico’s Income Tax Law gives two ways to pay: 25% of the full sale price, with no deductions, or 35% of the gain. In a normal sale before a notary you can choose, and the notary calculates and pays the tax at closing. Here is how both options work, taken from Article 160 of the law.
The two options, side by side
| Option 1: gross price | Option 2: net gain | |
|---|---|---|
| Rate | 25% | 35% (top rate of the Article 152 tariff) |
| Applied to | The total sale price | Sale price minus your deductions |
| Deductions | None | Adjusted cost, improvements, closing costs, appraisal, commissions |
| When it applies | Always available | Sale in a public deed (or with a legal representative in Mexico) |
| Legal source | Ley del ISR, Art. 160 | Ley del ISR, Arts. 160, 152, 121 and 124 |
Source: the current text of the Ley del Impuesto sobre la Renta published by Mexico’s Chamber of Deputies (last reform published April 1, 2024), read on October 23, 2026.
Option 1: 25% of the sale price
The default rule in Article 160 is simple: the tax is 25% of the total income, without any deduction. It does not matter what you paid for the condo, so even a sale at a loss pays it. If the buyer is a Mexican resident, the buyer withholds it. If the buyer is also a non-resident, you file and pay it yourself within 15 days of getting paid.
Option 2: 35% of your gain
The same article lets you pay instead on the gain, at the highest rate of the individual tariff in Article 152, currently 35%. Normally this option requires a legal representative in Mexico, but the law waives that requirement when the sale is recorded in a public deed (escritura pública), which is how a condo sale in Cancún is formalized.
The gain is calculated with the rules for individuals (Articles 119 to 128). Article 121 lets you deduct:
- Your acquisition cost, adjusted: Article 124 separates the land from the construction (land counts as 20% if they cannot be separated), reduces the construction cost by 3% for each year you owned it (to no less than 20% of the original cost) and adjusts the result for inflation. The adjusted cost can never be less than 10% of the sale price.
- Construction, improvements and additions: Real investments, not maintenance, also adjusted.
- Closing costs on both ends: Notary fees, taxes and registry fees from your purchase and your sale, plus the appraisal.
- Commissions: Brokerage commissions you paid when buying or selling.
If you bought pre-construction and sell after delivery, your purchase contract, payment receipts and deed are what prove your cost. Keep them all.
A simple example
These are made-up round numbers, just to show the difference. Say you sell for MXN $5,000,000 and, after the Article 124 adjustments, your deductible cost plus closing costs and commissions add up to MXN $4,400,000:
Option 1: 25% of the price
25% × MXN $5,000,000 = MXN $1,250,000
Option 2: 35% of the gain
Gain = MXN $5,000,000 − MXN $4,400,000 = MXN $600,000; 35% × MXN $600,000 = MXN $210,000
The break-even point is a gain of about 71% of the sale price (25 ÷ 35). Below that, the gain option costs less, which is why most sellers who can document their costs choose it.
What the notary does
When the sale is recorded in a public deed, Article 160 makes the notary responsible for the tax: the notary calculates it, states it in the deed and pays it to the tax authority within 15 days of signing. The notary needs your deductions to apply the gain option, so bring your paperwork to the notary’s office well before closing, not on the day.
Two more rules in the same article are worth knowing. If the price is paid in installments over more than 18 months under the deed, the tax can be paid as each installment becomes due. And if the tax authority appraises the property more than 10% above the agreed price, the difference is treated as income of the buyer if the buyer is a non-resident, taxed at 25%, which is something to keep in mind if you are selling to another foreigner below market value.
Before you list: a seller’s checklist
Gather your cost documents
Purchase deed or contract, payment receipts, invoices for improvements, closing-cost receipts and commission invoices. Without them, the gain option loses most of its value.
Ask the notary for both calculations
25% of the price and 35% of the gain, in writing, before you agree on a price.
Confirm your tax residency
Resident and non-resident sellers are taxed under different parts of the law. Your accountant confirms which applies to you.
Check your home country
Your own country may tax the same sale or allow a credit for the Mexican tax. That depends on its rules and any tax treaty, so ask your accountant at home.
Where this leaves you
Selling a Cancún condo as a foreigner is a well-defined process: the notary handles the tax at closing, and your main job is to arrive with the documents that let you pay on the gain instead of the price. Keeping those documents starts on the day you buy, along with the closing costs when buying property in Mexico, which are deductible later. If you rent the condo in the meantime, read how rental income is taxed for foreign owners. If you are buying again, browse condos for sale in Cancún.
This article is general information, not tax or legal advice. Rates and rules are taken from the law text cited above as of October 23, 2026 and can change. Tax treaties, your residency status and your home country’s rules can change the result, so confirm your situation with a Mexican accountant and your notary before you sell.
Frequently asked questions
What is the capital gains tax for foreigners selling property in Mexico?
Under Article 160 of Mexico’s Income Tax Law, a non-resident pays 25% of the total sale price with no deductions. When the sale is recorded in a public deed before a notary — the normal case — the seller can instead opt to pay on the gain at the top rate of the individual tariff in Article 152, which is 35%.
Which is better, 25% of the price or 35% of the gain?
It depends on how large your gain is. 25% of the price equals 35% of the gain when the gain is about 71% of the sale price, so unless you bought for very little, the gain option usually costs less. Your notary or accountant runs both numbers with your real acquisition cost and deductions.
Who withholds the tax when a foreigner sells?
In a sale recorded before a notary, the notary calculates the tax, states it in the deed and pays it to the tax authority within 15 days of signing. Outside that case, the law makes the buyer withhold if the buyer is a Mexican resident; if the buyer is also a non-resident, the seller files and pays within 15 days of receiving the money.
What can I deduct from the gain?
Article 121 lists the adjusted acquisition cost, investments in construction, improvements and additions (not maintenance), notary fees, taxes and registry fees from both the purchase and the sale, the appraisal, and commissions you paid on the purchase or the sale. Keep every invoice from the day you buy.
Does the home-sale exemption apply to foreigners?
The exemption for selling your home (casa habitación), up to 700,000 UDIS, is in Article 93, which belongs to the part of the law for resident individuals. The rules for non-residents are in a different title, where Article 160 applies. Whether you qualify as a Mexican tax resident is a question for your accountant.
Can I pay the tax in installments if the buyer pays in installments?
Yes, if the deed sets payments over more than 18 months and the tax interest is guaranteed. The tax is then paid as each payment becomes due, on the 15th of the following month.
