Foreign owners pay Mexican tax on rental income. Platforms like Airbnb withhold income tax and VAT, at lower rates if you give them a Mexican tax ID (RFC), and guests pay a state lodging tax in Jalisco and Nayarit. Check the condo's rental rules before you buy.
Many of my clients want a home that pays part of its way when they are not using it. That works well on Banderas Bay, but Mexico taxes rental income from Mexican property, including for owners who live abroad. Set it up properly from the first booking and it is simple to run.
Start with the building, not the tax office
Before you buy with rental income in mind, read the condo rules. Some buildings restrict short-term rentals, require registration with the administration or charge guest fees. A property manager who already works in the building can tell you how it performs in high and low season.
What the platforms withhold
- Platforms such as Airbnb must withhold income tax (ISR) and VAT (IVA) for Mexican properties and pay it to SAT, Mexico's tax authority.
- The withholding is much lower if you give the platform a Mexican tax ID (RFC) than if you do not, which is why most owners register.
- Guests also pay a state lodging tax. Jalisco and Nayarit both charge one, and platforms collect it on many bookings.
Getting registered
- Get a Mexican tax ID (RFC) as a non-resident or resident, with the help of a local accountant.
- Give the RFC to each platform you use, so the lower withholding rates apply.
- Decide with your accountant whether the platform withholding can be your final tax or whether you file monthly returns.
- If you rent directly, outside the platforms, issue official invoices (CFDI) and pay the taxes yourself.
- Keep records of income and expenses; they also help when you report the income in the US or Canada.
Don't forget home
US and Canadian owners usually also report Mexican rental income on their home tax return, often with a credit for tax paid in Mexico. Rates and rules change, and every owner's situation is different, so please treat this as general information and confirm with a Mexican accountant and your tax adviser at home.
What owning costs month to month →
Pre-construction and rental projections →
Frequently asked questions
Do foreigners pay tax on Airbnb income in Mexico?
Yes. Rental income from property in Mexico is taxable in Mexico. Platforms withhold income tax and VAT, and the rates are lower when the owner has given them a Mexican tax ID (RFC).
Is there a hotel or lodging tax on vacation rentals in Puerto Vallarta?
Yes. Jalisco and Nayarit both charge a state lodging tax on short-term stays, which platforms collect on many bookings and owners must handle on direct rentals.
Can every condo in Puerto Vallarta be rented short-term?
No. Each building sets its own rules. Check the condo regulations and ask the administration before you buy if rental income matters to you.
