Mexico’s taxpayer ombudsman flagged missing property-purchase invoices Aug. 27, gob.mx a tax-record problem that can affect foreign homeowners selling in Puerto Vallarta.
PRODECON asked Mexico’s tax authority, SAT, how certain owners could substantiate acquisition costs without the required fiscal invoice. Its request concerned purchases after 2014 from companies or business taxpayers that failed to issue that document.
Separately, federal income tax law limits the qualifying home-sale exemption to 700,000 investment units, known as UDIs. SAT That ceiling applies to sale proceeds, while eligibility also depends on the seller’s circumstances and supporting records.
How the rules affect Puerto Vallarta owners
For this report, I reviewed federal tax provisions, Foreign Ministry procedures, and Puerto Vallarta’s published property-record requirements. Those documents address separate questions: the seller’s tax residence, whether the property qualifies as a home, allowable deductions, and authority to transfer it.
Under Article 126 of the Income Tax Law, assignments of trust rights over real estate also fall within property-sale payment provisions. SAT Holding a condominium through a fideicomiso, or bank trust, does not remove the sale from the tax calculation.
For an owner in Marina Vallarta, Versalles, or Emiliano Zapata, that distinction affects the proceeds available after closing. The federal calculation and the bank’s transfer process require different records. Completing one does not establish that the other is ready.
Immigration status and tax residence require separate evidence
Article 9 of the Federal Fiscal Code defines Mexican tax residence by a person’s home location and, where relevant, their center of vital interests. When someone maintains homes in two countries, the code considers factors including income sources and the principal location of professional activities.
A temporary or permanent residency card therefore does not, by itself, settle the tax-residence question. The applicable fiscal test can also involve a tax treaty.
SAT’s 2026 rules for foreign nationals selling their homes, Rule 3.11.3, establish a rebuttable presumption of Mexican tax residence. The seller must declare that status under oath, provide an RFC or CURP, and identify a fiscal or notification address.
That address must be outside the home being sold. The declaration must be included in the public instrument.
The rule also requires a Mexican tax-residence certificate or, alternatively, the fiscal identification card called the cédula de identificación fiscal. The supporting document must accompany the instrument’s appendix.
The presumption remains subject to contrary evidence. These paperwork provisions do not authorize a seller to declare Mexican fiscal residence when their circumstances establish otherwise.
The home-sale exemption has several conditions
Under Article 93, the transfer must be formalized before a notary, and the property must qualify as the taxpayer’s home. The seller must not have used the same exemption on another home sale during the preceding three years.
The three-year restriction concerns a previous exempt sale. It does not establish a three-year minimum ownership period.
The 700,000-UDI ceiling also needs careful interpretation. It concerns the consideration received, not a 700,000-UDI profit-tax-free allowance. For proceeds above the ceiling, the law calculates the taxable gain on the excess and allocates deductions proportionately.
Banco de México publishes the daily peso value of the UDI. The exemption’s peso equivalent therefore changes; a dollar estimate from an earlier purchase cannot establish the applicable ceiling.
The regulation also limits the land included within the home definition. Article 154 covers land up to three times the area covered by the home’s construction. Owners selling a house on a larger parcel need that boundary examined in the calculation.
Which documents establish that it was your home?
Article 155 of the tax regulation specifies the evidence a seller can present to the notary. Its categories include:
- An INE voter credential.
- Fiscal receipts for electricity or fixed-line telephone payments.
- Statements from financial institutions, commercial stores, or nonbank credit-card providers.
The documents may bear the seller’s name, their spouse’s name, or a direct ancestor’s or descendant’s name. The address must match the deed address fully or through its fundamental elements, with the notary recording that correspondence.
A SEAPAL water receipt and a municipal property-tax receipt serve other purposes. Neither appears in Article 155’s enumerated residence-evidence categories. Nor does a passport or immigration card.
Read together, these rules require two separate findings: the seller’s qualifying fiscal status and evidence that the property was their home. An investment property cannot qualify solely because its owner holds Mexican immigration residence.
How taxable gains are calculated
For individuals within Mexico’s resident tax regime, Article 120 uses a calculation tied to the acquisition-to-sale period, capped at 20 years. Part of the gain enters the seller’s other annual taxable income; the remainder follows the article’s separate rate procedure.
That structure means there is no single flat capital gains rate for every resident seller.
For an individual who remains tax-resident abroad without a Mexican permanent establishment, Article 160 sets a default tax of 25% of gross proceeds without deductions. It also permits a gain-based option when the seller has a qualifying Mexican representative and meets the transaction requirements.
That option applies the highest individual rate to the legally determined gain. The 2026 tax tariff sets that rate at 35%. Access to the option depends on satisfying its conditions before treating it as the seller’s tax outcome.
Consider a simplified illustration using Article 160. A 10 million-peso sale produces a 2.5 million-peso tax under the gross-proceeds method. If the qualifying alternative applies and the legally calculated gain is 2 million pesos, 35% produces 700,000 pesos.
Those figures illustrate the two bases. They are not a closing estimate and exclude transaction expenses.
Which expenses can reduce the gain?
Article 121 permits several deduction categories in the gain calculation. They include proven acquisition cost; construction, improvements and extensions; qualifying seller-paid notary expenses, taxes and duties; appraisal costs; and commissions or brokerage charges.
The article excludes conservation expenses from its construction-and-improvement category. Routine maintenance therefore needs different treatment from an eligible capital improvement.
PRODECON’s August advisory identifies a specific acquisition-record problem: some purchasers did not receive the required seller-issued CFDI, Mexico’s electronic fiscal invoice. The agency asked SAT about a documentation remedy. Its request does not establish that every missing invoice has been cured.
In an archived notaries’ guide, José Antonio Manzanero Escutia, then president of the National College of Mexican Notaries, said in English translation: “It is advisable to ask the notary about everything related to the ISR exemption and deductions when acquiring the property.” The guide connects that advice to records accumulated during ownership.
Missing improvement invoices require their own review. Article 205 of the regulation provides an appraisal route when construction, improvement or extension costs cannot be proven. It allows 80% of the qualifying appraised construction value, referenced to the completion date and considering age.
That provision concerns construction investments. It does not establish a universal substitute for every missing purchase invoice.
The original purchase price also needs adjustment
Article 124 treats land and construction separately when updating acquisition costs. SAT construction costs generally decline 3% annually, subject to a floor, before inflation adjustment. Land receives a separate inflation adjustment.
For inherited property, the same article generally carries forward the predecessor’s acquisition cost and date. An inheritance therefore does not automatically reset the Mexican tax basis to current market value.
The Federal Fiscal Code requires taxes to be assessed and paid in pesos. A dollar-denominated purchase and asking price cannot replace the statutory currency conversion and cost adjustments.
Our guide to the real cost of buying a Puerto Vallarta property provides companion reading on acquisition expenses. The sale calculation requires records of those expenses and how they’re treated under the tax provisions.
The trust needs its own closing review
The Foreign Ministry, known as SRE, describes restricted-zone property trusts as arrangements authorized for terms of up to 50 years. The seller’s actual remaining term must be established from their trust documents.
Under the foreign investment regulation, the trustee bank retains legal title during the trust’s term. The beneficiary’s sale therefore requires the bank’s participation in the relevant transfer.
Banorte’s published sale procedure describes an assignment of beneficiary rights when the purchaser is foreign. When the purchaser is Mexican, its procedure transfers title on the foreign beneficiary’s instructions and extinguishes the trust.
That is the bank’s described procedure. The proposed deed and trustee’s instructions establish the structure for the particular transaction.
Renewal has a separate timetable. Article 12 of the investment regulation requires the extension request to be submitted through the trustee within the 90 business days before the contract expires. You must continue to comply with the permit conditions.
SRE’s current extension procedure, updated in June, lists Form SRE-02-014 for timely or late extensions. The trustee’s delegate signs it, and the file includes the trust deed and subsequent assignments where applicable.
The existence of a late-extension procedure does not mean an expired trust is ready for sale. Extension and assignment are separate procedures in the official framework.
Processing periods do not establish a closing date
BBVA’s trust-creation guidance gives a response period of about 12 business days after receiving all documents and the signed application. That describes one bank’s trust process, beginning with a complete file.
SRE has another clock for a trust’s extinction. Its notification procedure requires the bank to notify the ministry within 40 business days after extinction. That is a reporting deadline after the event, rather than a required 40-day wait before closing.
The distinction matters when evaluating a proposed completion date. A bank’s response period does not include time spent assembling the seller’s tax evidence or correcting local account records.
Puerto Vallarta’s published cadastral registration requirements list a property-transfer notice, the complete ownership instrument, and a predial no-debt certificate. For constructed properties, they also list a SEAPAL no-debt certificate or the latest paid receipt.
The municipal page identifies the cadastral office at the Unidad Municipal Administrativa, Avenida Mezquital 604, in colonia Portales. Its published requirements concern municipal records, separate from evidence of federal exemption.
SEAPAL’s no-debt certificate requirements require the account to have no outstanding debt and specify payment and identification records. A representative also needs a power of attorney and identification for both parties.
The agency lists its central location at Avenida Francisco Villa and Manuel Ávila Camacho, in colonia Lázaro Cárdenas. Clearing that account addresses the water-service record; it does not establish tax residence or entitlement to the home-sale exemption.
Tax reporting continues after the deed is signed
For resident-regime transactions, Article 126 requires the notary to calculate and remit the provisional payment. It also requires calculation information and a fiscal receipt showing the transaction and tax remitted.
“Provisional” describes a payment toward the tax calculation. It does not establish that every individual seller has completed their annual obligations.
Article 150 requires taxpayers with total annual income above 500,000 pesos to report all income, including qualifying exempt home-sale proceeds. Article 93 makes the exemption unavailable when taxpayers omit that income despite a reporting obligation.
The general annual filing period for individuals is April of the following year. Sellers need the closing calculation and fiscal receipt available for that review.
For U.S. citizens and resident aliens, the IRS applies worldwide-income rules. Its home-sale exclusion has separate eligibility conditions, so a Mexican exemption does not establish the U.S. result.
Canada’s revenue agency likewise says a property outside Canada can qualify as a principal residence, depending on the facts. For taxpayers claiming that exemption, its reporting rules require reporting the disposition and designation on the Canadian return. Canadian tax residence, the property’s use, and the designation records determine that separate treatment.
