2025 Tax Guide for Foreigners Buying Property in Puerto Vallarta

2026 Tax Guide for Foreigners Buying Property in Puerto Vallarta

Yes, a foreigner can buy property in Puerto Vallarta. The key is understanding that, because it’s within the “restricted zone” (less than 50 km from the coast), the purchase is made through a bank trust or a Mexican company, and entails tax obligations both at the time of purchase and throughout ownership and eventual sale.

[IMAGE: View of beachfront properties in Puerto Vallarta with the bay in the background]

Why do foreigners need a trust in Puerto Vallarta?

The Mexican Constitution restricts direct ownership by foreigners within the 50-kilometer strip of coastline known as the restricted zone. Puerto Vallarta and the entire Banderas Bay fall within this zone.

The legal solution is the restricted zone trust: a contract in which an authorized Mexican bank holds the title to the property, while you, as the beneficiary, retain all rights of use, rental, remodeling, sale, and inheritance. In practice, it’s your property in all that matters. The trust is established for renewable periods and has an annual administration fee.

The other option, common for investments or multiple properties, is to acquire through a Mexican company with foreign capital, which raises other tax and registration considerations.

Taxes on the Purchase: What You Pay in the Acquisition

Upon closing the purchase, the buyer assumes several costs and taxes, including:

Property Acquisition Tax (ISAI): a percentage of the transaction value, which varies depending on the municipality.
Notary and closing costs.
Costs for establishing the trust and obtaining the permit from the Ministry of Foreign Affairs.
Registration fees with the Public Registry of Property.

These costs are added to the property price, so it’s advisable to budget for them from the beginning to avoid surprises.

Taxes While You Own Property

Owning property in Mexico involves recurring obligations:

Property tax: the annual property tax, which in Mexico is usually low compared to other countries.
Annual trust fee: the bank charges for managing your trust.
Income tax if you rent it out: if you generate income by renting your property (including platforms like Airbnb), you must declare it to the SAT (Mexican Tax Administration Service) and comply with the corresponding tax regulations. This is one of the most overlooked points and one that causes the most problems later.
Taxes When Selling: Income Tax on the Gain

When you sell your property, you may be subject to Income Tax (ISR) on the gain. There are exemptions under certain conditions, but specific requirements apply, especially for foreigners.

Good tax planning from the time of purchase—and proper record-keeping of improvements and expenses—can significantly reduce what you will pay when you sell. That’s why the decisions you make when buying directly affect your finances years later.

And what about my taxes in my country of origin?

If you are a U.S. citizen, remember that the IRS taxes your worldwide income, so renting or selling your property in Mexico can also have implications in the United States. Mechanisms exist to avoid double taxation, but they require coordinated management between both tax systems. A firm with binational experience is key here.

How a Local Accounting Firm Can Help You

Buying property in Puerto Vallarta as a foreigner involves banks, notaries, the Mexican Tax Administration Service (SAT), and sometimes authorities in your home country. An accounting firm with experience serving international clients coordinates the tax aspects of the entire process: explaining what you will pay and when, structuring the purchase for the lowest possible tax impact, and keeping your obligations up to date while you are the owner—all in your language.

Frequently Asked Questions
Can a foreigner own a house in Puerto Vallarta?

Yes. Within the restricted zone, property is acquired through a bank trust or a Mexican company. The foreigner retains all rights to the property, including the right to sell or bequeath it.

Do I have to pay taxes if I rent my property in Mexico?

Yes. Rental income, including income from platforms like Airbnb, must be declared to the SAT (Mexican Tax Administration Service) under the corresponding tax regime. Failure to do so may result in fines.

Do I pay taxes in Mexico and also in my home country?

Possibly. Some countries, like the United States, tax the worldwide income of their citizens. Mechanisms exist to avoid double taxation, but they require specialized advice to be applied correctly.

Conclusion

Buying property in Puerto Vallarta as a foreigner is entirely possible and safe, provided you understand the tax rules that apply before, during, and after the purchase. Good advice from the beginning protects your investment.

And it saves you from costly surprises.

At Sayulita Consultores, we have over 40 years of experience assisting foreign buyers and investors in Banderas Bay, with expertise in navigating both the Mexican and U.S. tax systems. Schedule a free consultation and we’ll review your case in Spanish or English before you sign.