IVA (Impuesto al Valor Agregado) (Value Added Tax / VAT)ee-VAH
IVA (Impuesto al Valor Agregado) is Mexico's federal value-added tax, levied at 16 percent on most goods and services under the IVA Law (Ley del IVA). The sale and long-term unfurnished rental of residential property (casa habitación) are exempt under Articles 9 and 20.
By Daniel Ortega · Last reviewed 12 November 2026
How it works
A foreign buyer purchasing residential property in Mexico pays no IVA on the sale of the home itself, whether new construction or resale, because Article 9, section II of the IVA Law exempts constructions attached to the soil destined or used for casa habitación. Land is also always exempt under Article 9, section I. Commercial property transactions pay 16 percent IVA on the construction value (not land). Long-term unfurnished rentals of residential property are exempt under Article 20, section II, but furnished rentals, short-term vacation rentals (renta vacacional) and hotel or lodging use all pay 16 percent IVA. Notary fees, real-estate broker commissions, property-management services and most professional services related to the transaction carry 16 percent IVA. The tax is collected by the service provider and remitted to SAT (Servicio de Administración Tributaria).