Short-Term Rentals

A foreign buyer considering a property for short-term rental in Mexico must verify three layers before closing: the property title permits commercial lodging use, the condominium bylaws (reglamento de condominio) allow vacation rentals, and the municipality issues operating licenses for the address. Coastal and border properties require a 50-year renewable bank trust (fideicomiso) under the Foreign Investment Law, with setup fees ranging from USD 1,500 to 3,500 and annual maintenance fees from USD 500 to 1,200 depending on the bank. Closing costs average 6 percent of the property value, including notary fees (1 to 2 percent), municipal acquisition tax (ISAI) of 3 to 4 percent in Quintana Roo, and the federal SRE permit fee of MXN 21,650 for restricted-zone properties. Buyers should request written confirmation from the condominium administrator that short-term rentals are permitted, a certificate of no liens (certificado de libertad de gravamen) from the Public Property Registry, and a list of current municipal operating licenses from the seller. Many Playa del Carmen and Tulum developments explicitly prohibit vacation rentals in newer buildings; Cancún Hotel Zone and Cozumel generally allow them but require municipal registration.

Operating a lawful short-term rental in Quintana Roo requires four registrations: a federal tax ID (RFC) from the SAT, enrollment in the State Tourism Registry (RETUR-Q) through the Secretariat of Tourism, a State Tax Contributor Registry (REC) from SATQ, and a municipal operating license from the local government. RETUR-Q registration is free, mandatory and must be renewed annually; the application requires proof of property ownership, a valid RFC, a recent property tax receipt (predial), and Civil Protection approval for fire and safety equipment. Platforms such as Airbnb and Vrbo withhold 16 percent IVA and a portion of ISR on bookings, but hosts remain responsible for filing monthly ISH declarations with SATQ and remitting the 6 percent lodging tax by the 10th of each month. Non-resident foreign owners pay 25 percent ISR on gross rental income under Article 158 of the Income Tax Law, with no deductions for management fees, utilities, maintenance or depreciation; Mexican tax residents may elect to pay progressive rates on net income after allowable expenses. Condominium associations (administrador del condominio) may assess fees for elevator and pool use by guests, and many buildings require advance notice of short-term occupancy. Fines for operating without RETUR-Q registration reach 100,000 pesos, and municipalities may seal properties or request platform delisting for unlicensed hosts.

A non-resident seller of a property used for short-term rentals pays federal capital gains tax (ISR) of 25 percent on the gross sales price with no deductions, or may elect to pay approximately 35 percent of the net gain after purchase costs, improvements and selling expenses by appointing a Mexican legal representative and obtaining an RFC. The notary withholds the applicable amount at closing and remits it to the SAT. Sellers must cancel the RETUR-Q registration, municipal operating license and state tax contributor registry (REC) upon sale, and provide the buyer with copies of the last twelve months of ISH declarations to demonstrate tax compliance. Outstanding lodging tax (ISH) or property tax (predial) becomes a lien on the property and the notary will require proof of payment before formalizing the deed. If the property was held in a fideicomiso, the bank trustee charges a substitution fee (typically USD 1,000 to 2,500) to transfer the beneficial interest to the buyer, and the seller must present a certificate from the fiduciary institution showing no outstanding trust fees. A seller who operated the rental through a Mexican corporation (Sociedad Anónima or Sociedad de Responsabilidad Limitada) may sell the shares instead of the property, avoiding the 25 percent gross withholding but subjecting the share sale to different valuation and disclosure rules. Properties marketed as turnkey vacation rentals command premium pricing only when all registrations, licenses and tax filings are current and transferable; buyers increasingly request proof of RETUR-Q enrollment and a history of occupancy from platforms as part of due diligence.