Selling Inherited Property and Tax Implications in Mexico
Karla and Erick Cabo Realty
Last update: 2026-10-08
Karla and Erick Cabo Realty
Last update: 2026-10-08
If you inherited a home in Los Cabos, here is the short answer: Mexico has no inheritance tax. You pay nothing to receive the property. Taxes come later, when you sell, and they are calculated in a way that surprises most U.S. families.
We help heirs from California, Texas and Arizona sell inherited homes, condos and lots in Cabo San Lucas, San José del Cabo and the Tourist Corridor. This guide explains what happens when you receive the property, how the tax on the sale really works, and what to prepare before you list it.
💬 Help Me Sell an Inherited Property 📞 Call or Text Us
| 0% inheritance tax in Mexico |
25% of the total sale price for non-residents, with no deductions |
35% of the gain, the other option for non-residents |
| 700,000 UDIS primary-home exemption (Mexican tax residents only) |
500,000 pesos: above this, Mexican residents must report the inheritance |
15 days for the notary to pay the tax after the sale is signed |
Under Mexico's Income Tax Law, property received through an inheritance is exempt from income tax (ISR). There is no federal inheritance or estate tax in Mexico.
The work is legal, not fiscal. Before you can sell, the property must be in your name. How that happens depends on how the owner held title:
| How the owner held title | What happens | Speed |
| Fideicomiso with substitute beneficiaries | The bank transfers the beneficiary rights to the people the owner named | Usually the fastest |
| Mexican will | The heirs complete an estate process (sucesión) before a Mexican notary | Moderate |
| U.S. will only | The U.S. will may need to be recognized in Mexico before the estate process | Slowest, with extra legal steps |
Most foreign owners in Los Cabos hold property through a fideicomiso. If you own in Cabo today, naming substitute beneficiaries is the easiest gift you can leave your family.
When you sell, you pay income tax (ISR) on the gain. The notary who signs the sale calculates the tax and pays it to the SAT, so it is settled at closing.
The gain uses the original owner's cost. For inherited property, Mexican law takes the price your parent (or the person you inherited from) paid, and the date they bought it. That cost is adjusted for inflation from their purchase date. It is not the value on the day you inherited.
This matters for long-held Cabo homes. A house bought 20 years ago for much less than today's price can show a large taxable gain. Find the original purchase deed and receipts for improvements early: they lower the gain.
| Your situation | How ISR is applied | Primary-home exemption |
| Not a Mexican tax resident (most U.S. heirs) | 25% of the total sale price with no deductions, or 35% of the gain if the conditions of the law are met | Generally not available |
| Mexican tax resident | Progressive rates on the gain, after deductions (original cost adjusted for inflation, improvements, notary and appraisal costs, sales commission) | Up to 700,000 UDIS if it was your home and you did not use it in the last 3 years |
For most U.S. heirs, the 35%-of-the-gain option is better when the gain is small compared to the price. Your notary runs both numbers.
| Myth | Reality |
| "Mexico charges an inheritance tax." | No. Receiving property by inheritance is exempt from ISR. |
| "The gain starts from the value when I inherited." | No. It starts from what the original owner paid, adjusted for inflation. |
| "If I buy another property, I don't pay tax." | No. Mexico does not have a reinvestment exemption like some U.S. rules. |
| "I can sell it cheap to a relative to pay less." | The tax authority can apply the appraised value instead of the agreed price. |
💬 Help Me Sell an Inherited Property 📞 Call or Text Us
No. Receiving property through an inheritance is exempt from income tax (ISR), and Mexico has no federal estate tax.
ISR is charged on the gain: the sale price minus what the original owner paid, adjusted for inflation from their purchase date, minus allowed costs.
As a non-resident, you pay 25% of the total price with no deductions, or 35% of the gain if the conditions of the law are met. Your notary compares both.
No. Mexico does not have a reinvestment exemption.
Not always. Many heirs sign through a power of attorney granted before a notary or a Mexican consulate. Ask us before you travel.
Inherited a property in Los Cabos?
Tell us where the property is and how it is titled. As MLS members, we will help you understand its value, coordinate with the notary and sell it for the best net result.
Source: Mexican Income Tax Law (Ley del ISR), articles 93, 124 and 160, and our local experience. This article is general information, not legal or tax advice. Every case is different: confirm the numbers with your notary and tax advisor.
Disclaimer: Karla & Erick | Cabo Realty provides educational content about real estate in Los Cabos. We help buyers and sellers, mainly from the United States, buy and sell homes, condos and lots in the region. We are MLS members and operate under the brokerage Century 21 Paradise Properties. We are not lawyers, notaries or tax advisors.
Karla & Erick | Cabo Realty | Century 21 Paradise Properties
Your home in Los Cabos, with people who live here.
Karla Andreu and Erick Flores are MLS members with Century 21 Paradise Properties, focused on luxury golf and oceanfront communities: Querencia, Palmilla, Pedregal, Quivira, Diamante, Cabo del Sol, Cabo Real, Club Campestre and Puerto Los Cabos.
Most of our clients come from California, Texas and Arizona. We help them buy, sell and relocate with real market data, honest advice and one clear plan from the first video call to closing day.
No pressure. No surprises. Just the right home for the way you want to live.
How Do I Sell My Property in Cabo? A Step-by-Step Guide
Learn how to sell property in Cabo San Lucas and San José del Cabo with this step-by-step guide for U.S. sellers. Understand pricing, taxes, closing process, and how to maximize your net when selling real estate in Los Cabos.
When Is the Best Time to Sell Property in Cabo?
When is the best time to sell property in Cabo? This guide explains seasonality, pricing strategy, and timing for U.S. sellers in Los Cabos to help maximize exposure and results.
What Happens to Real Estate During a Divorce in Mexico? – A Cabo Realty Legal Breakdown
Legal breakdown of what happens to real estate during divorce in Mexico, focused on Los Cabos, Baja California Sur: marital regimes, ownership structures (escritura/fideicomiso), key documents, and practical next steps—updated for 2026.
