Capital Gains Tax (ISR)
Capital gains tax in Mexico is the Impuesto Sobre la Renta (ISR) applied to profit from selling real property, governed by ISR Law Articles 93, 120, 121, and 126.
By Daniel Ortega · Last reviewed 12 November 2026
How it works
When a foreign owner sells Mexican real estate in November 2026, the notary handling the closing calculates and withholds the ISR at closing before releasing funds to the seller. Tax residents may elect a progressive rate from 1.92 percent to 35 percent on the net gain (sale price minus authorized deductions under Article 121, including documented purchase cost adjusted for inflation, capital improvements with facturas, and real-estate commission), or pay 25 percent of the gross sale price. Non-residents and those without an RFC typically pay 25 percent of gross proceeds. Resident sellers of a primary home may exempt up to 700,000 UDIs (approximately 6.23 million pesos in November 2026) of the sale price under Article 93, fraction XIX, once every five years. The payment withheld by the notary is provisional and is credited against the seller annual ISR filing.