Specific taxes in Mexico in 2026: what you really pay beyond income tax

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You know your Mexican income tax rate. But buying a flat, hiring a nanny, renting on Airbnb or running a café brings other taxes. This guide lists the specific taxes that matter in 2026, what they really cost and how to keep them down legally.

Mexico specific taxes in 2026: the key figures

Is this guide for you?

Read on if you…

• buy, sell or rent out property in Mexico;
• employ staff or run a small business there;
• want to know what you pay beyond income tax in your daily life.

Probably not your case if you…

• are only after income tax rates and brackets;
• are a large importer or manufacturer needing customs and IEPS compliance in depth.

What is IEPS and what does it cost in 2026?

IEPS, the impuesto especial sobre producción y servicios, is Mexico's excise tax. Producers and importers pay it, then pass it on in the price. You see it at the till, not on a return.

The 2026 budget raised several of these "health taxes". Rates and quotas also move each year with inflation. Check the latest figures before you price a product.

Which state and local taxes will you meet?

Mexico is a federation. Each of the 32 states, and many municipalities, set their own rates. The same flat can cost very different amounts in taxes in Mexico City and Quintana Roo.

Payroll tax (ISN)

Employers pay a state tax on gross salaries. Rates sit around 2% to 4%. Mexico City charges 4%. It applies even if you hire one employee, such as a nanny paid through payroll.

Lodging tax

Hotels and short-term rentals charge a state lodging tax on the room price, usually 3% to 5%. Airbnb and similar platforms collect it in many states. Hosts outside platforms must register and pay it themselves.

Property transfer tax (ISAI)

When you buy property, you pay ISAI on the higher of the price or the appraised value. Rates range from about 2% to 5%. Mexico City uses a progressive scale. The notary calculates and collects it at signing.

Property tax (predial)

The municipality charges a yearly tax on the cadastral value of your property. It's cheap by international standards. Many cities give a discount if you pay the whole year in January or February.

Vehicle taxes

The federal new car tax (ISAN) applies to new car sales. Some states also charge a yearly vehicle tax, tenencia. Others have abolished it.

What special VAT and withholding rules hit digital nomads?

Three rules matter if you live online.

1. Foreign digital services. Netflix, Spotify, cloud tools and apps charge 16% Mexican VAT to Mexican users.
2. Platform withholding. If you earn through platforms such as Airbnb, Uber or online marketplaces, they withhold income tax and VAT. For example, hosts typically suffer 4% income tax withholding and half the VAT.
3. Imports. Online purchases from abroad pay VAT and duties. Mexico raised import tariffs for 2026 on many goods from countries without a trade agreement.

Want the full picture of your taxes? Start with the tax landscape overview of Mexico. Comparing countries? See specific taxes in Paraguay and specific taxes in Costa Rica.

How do you pay less, legally?

1. Buy property in the right state. ISAI and notary costs differ by state. On a MXN 5 million flat, 2% versus 5% is MXN 150,000.
2. Register your rental on a platform that collects lodging tax. You avoid separate filings and fines.
3. Use the border region rate if you really operate there. Qualifying businesses in border regions charge 8% VAT and get an income tax credit.
4. Pay predial early. Early payment discounts are common.
5. Keep CFDI invoices for business purchases. VAT and IEPS on business costs can be credited, as explained in business expenses in Mexico.

Common mistakes (and what they cost)

• Budgeting only the property price → transfer tax, notary and registry fees add 5% to 8% to the cost.
• Renting short-term without registering → state lodging tax, fines and back VAT on several years of bookings.
• Hiring staff informally → payroll tax, IMSS contributions and labour claims later, often several times the saved amount.
• Ignoring platform withholding in your return → you pay twice or miss credits you're owed.
• Assuming no inheritance tax means no tax on gifts → gifts from non-relatives are taxable income for the receiver.

Frequently asked questions

Does Mexico have an inheritance or wealth tax?

No. Mexico has no federal inheritance, estate or wealth tax in 2026. Inheritances and legacies are exempt from income tax, and gifts between spouses and direct relatives are exempt too. Gifts from other people above about three annual UMAs are taxable income. Property received may still trigger local transfer tax in some states.

What is IEPS in Mexico?

IEPS is the federal excise tax on specific goods and services: alcohol, tobacco, sugary and energy drinks, junk food, fuel, gambling and some telecom services. Producers and importers pay it and pass it on in the price. Rates range from 3% to 200%, and some goods carry fixed quotas per unit.

How much is property transfer tax in Mexico?

It depends on the state and municipality. Rates usually range from about 2% to 5% of the higher of the price or the appraised value. Mexico City uses a progressive scale. The notary calculates and collects it at signing, together with registry fees. Budget 5% to 8% in total closing costs.

Do Airbnb hosts pay lodging tax in Mexico?

Yes, in most states. Lodging tax is usually 3% to 5% of the room price. Airbnb collects it in many states. Hosts also face income tax and VAT withholding by the platform. If you rent directly to guests, you must register with the state and file the tax yourself.

What is the VAT rate in Mexico in 2026?

The standard rate is 16%. Qualifying businesses in the northern and southern border regions charge 8%. Basic food, medicine and exports are zero-rated. Some services, such as residential rent and medical services, are exempt. Foreign digital services sold to Mexican users are subject to 16% VAT.

Do employers pay payroll tax in Mexico?

Yes. Each state charges a payroll tax on gross salaries, usually 2% to 4%. Employers also pay social security contributions to IMSS, housing fund contributions to INFONAVIT and retirement savings. These apply even to one domestic employee on payroll. Contractors invoicing with CFDI don't trigger payroll tax.

Related guides

• Tax landscape overview of Mexico
• Business expenses in Mexico
• Capital gains tax in Mexico
• Legal forms of business in Mexico
• Personal tax deductions and benefits in Mexico
• Tax landscape overview of Costa Rica
• All country tax guides

Sources

• SAT – Servicio de Administración Tributaria
• Chamber of Deputies – federal laws (IEPS Law, VAT Law)
• Diario Oficial de la Federación
• Ministry of Finance (SHCP)
• PwC Worldwide Tax Summaries – Mexico: Other taxes

This guide is general information, not personalised tax advice. See how we research and review.