If you own property in Mexico, you're likely subject to the Predial tax, a municipal property tax similar to those in the U.S. or Canada. This article explains what Predial is, how it’s calculated, who pays it, and tips for managing or reducing it.
What is the Predial Tax?
The Predial is an annual property tax imposed by local municipalities across Mexico. It's based on the official value of land and construction (known as "valor catastral") and is typically much lower than property taxes in North America.
Who Needs to Pay Predial?
- All property owners in Mexico (Mexican or foreign nationals)
- Applies to residential, commercial, and undeveloped land
- Even if a property is not occupied, the tax must still be paid annually
When and How to Pay Predial
The Predial tax is usually due by the end of February each year. Many municipalities offer early payment discounts (e.g., 10-20%) for January payments. Payments can be made:
- In person at local government offices
- At participating banks or convenience stores
- Online through the municipal tax website (available in many regions)
Average Predial Rates by Mexican State (2025)
Rates can vary significantly depending on the municipality and property size. Below is a sample of estimated rates for residential properties:
| State | Estimated Annual Rate (%) | Discount for Early Payment |
|---|---|---|
| Mexico City (CDMX) | 0.1 – 0.3% | Up to 8% |
| Jalisco (Guadalajara) | 0.12 – 0.35% | Up to 15% |
| Quintana Roo (Cancún) | 0.1 – 0.25% | Up to 20% |
| Baja California Sur | 0.1 – 0.4% | Up to 10% |
| Yucatán (Mérida) | 0.13 – 0.35% | Up to 15% |
How is the Tax Calculated?
The local municipality determines the value of your property (land + structure) and applies the corresponding tax rate. This official value is often lower than the real market value. The rate is then multiplied by the value to determine the amount due.
Tips to Reduce Your Predial Tax
- Early payment: Many municipalities offer 5–20% discounts if paid in January or February.
- Senior citizen discounts: Some cities offer reduced rates for pensioners or retirees.
- Verify property records: Request a revaluation if the property is overvalued in the municipal registry.
- Pay online: Some municipalities offer additional digital payment discounts.
What Happens If You Don’t Pay?
Failure to pay Predial can result in late fees, fines, or in extreme cases, legal action. The debt can accumulate and may affect future property sales or transfers.
Conclusion
The Predial property tax in Mexico is a relatively low-cost but important obligation for property owners. By paying early, checking eligibility for discounts, and understanding how your tax is calculated, you can manage your Predial effectively and avoid unnecessary penalties.
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