A Practical Guide for Buyers Considering Puerto Vallarta
For many U.S. and Canadian buyers drawn to the sun-drenched coasts of Puerto Vallarta, the dream of owning property in Mexico is often followed by practical questions about ongoing ownership costs.
At the top of that list is a simple and important one:
How much are property taxes in Mexico?
For most North American buyers, the answer comes as a welcome surprise. Property taxes in Mexico—particularly in Puerto Vallarta—are notably affordable and remain one of the most compelling financial advantages of owning real estate here. When compared to the United States and Canada, the long-term cost of ownership is significantly lower and far more predictable.
This article provides a clear overview of how property taxes work in Mexico, how they are calculated, what discounts are available in Puerto Vallarta, and why this affordability does not compromise property values or local infrastructure.
How Property Taxes Work in Mexico (Predial Explained)
In Mexico, property taxes are known as predial and are administered at the municipal level, not federally. Each municipality sets its own rates, assessment criteria, and discount programs.
Unlike the United States and Canada, where property taxes are typically tied to market value, Mexico uses a different system—one that plays a major role in keeping taxes affordable.
Cadastral Value vs. Market Value in Mexico
What Is Cadastral Value?
Property taxes in Mexico are calculated based on the cadastral value (valor catastral) rather than the market value of the property.
The cadastral value is determined by the municipality and takes into account factors such as:
• Location
• Lot size
• Construction type
• Age of the property
• Intended use
Cadastral values are generally lower than market values and are updated conservatively. This approach helps ensure that property taxes remain stable even as real estate values increase over time.
Why This Keeps Property Taxes Affordable
Because cadastral values do not rise as aggressively as market prices, homeowners in Mexico are largely protected from the sharp property tax increases that are common in many parts of the U.S. and Canada.
This system creates long-term predictability and keeps annual ownership costs manageable.
How Much Are Property Taxes in Puerto Vallarta?
In Puerto Vallarta, the annual predial tax rate is approximately 0.08% of the cadastral value, making it one of the lowest effective property tax systems in North America.
When applied to conservatively assessed cadastral values, the result is a very modest annual tax obligation.
Typical Annual Property Tax Ranges
While every property is different, most owners in Puerto Vallarta can expect annual property taxes in the following ranges:
• Condominiums: approximately $50 to $300 USD per year
• Single-family homes: approximately $150 to $600 USD per year
• High-end or oceanfront properties: commonly under $1,000 USD annually
These amounts represent annual taxes, not monthly or quarterly payments.
Property Tax Comparison: Mexico vs. the United States and Canada
To put the affordability of property taxes in Mexico into perspective, consider a hypothetical property with a market value of $500,000 USD:
Annual Property Tax Comparison
Ubicación Typical Annual Property Taxes
Puerto Vallarta, Mexico ~$200–$500 USD
United States (average) ~$5,000–$6,000 USD
Canada (average range) ~$2,500–$12,500 CAD
Actual tax rates vary widely by state, province, and municipality, but the difference is clear: property taxes in Puerto Vallarta represent only a fraction of what many homeowners pay annually in North America.
Property Tax Discounts in Puerto Vallarta
Puerto Vallarta offers early-payment incentives each year that further reduce an already low tax burden.
Early Payment Discounts (Predial)
Property owners who pay their predial early in the year may qualify for the following discounts:
• January: 15% discount
• February: 10% discount
• March: 5% discount
These discounts are widely used by both Mexican and foreign property owners and provide a simple way to reduce annual ownership costs even further.
Property Tax Discounts for Permanent Residents (INAPAM)
Permanent residents of Mexico who are 60 years of age or older may qualify for additional property tax benefits through senior discount programs, often supported by documentation such as an INAPAM card.
In Puerto Vallarta and other municipalities in Jalisco, senior discounts on predial may be available depending on local rules, property type, and eligibility criteria. Because these programs are administered at the municipal level, the exact discount and conditions can vary.
For retirees planning long-term residency in Puerto Vallarta, these programs can provide meaningful additional savings.
How and When Property Taxes Are Paid in Puerto Vallarta
Property taxes in Puerto Vallarta are paid once per year, typically at the beginning of the calendar year.
Payment Options
Owners can pay their predial:
• In person at municipal treasury offices
• At participating local banks
• Through the municipality’s online payment portal
Proof of payment should always be retained, as current property taxes are required for notarial transactions and resale.
What Happens If Property Taxes Are Not Paid?
Although property taxes in Mexico are relatively low, they are a legal obligation.
Unpaid predial taxes:
• Accrue penalties and interest over time
• Must be brought current before a property can be sold
• May result in a municipal lien if left unpaid for an extended period
In practice, outstanding balances are typically resolved by settling the amount due, but keeping taxes current avoids delays and complications during resale.
Residential vs. Commercial Property Taxes in Mexico
In Puerto Vallarta, the predial rate itself is generally similar for residential and commercial properties. However, commercial properties may be subject to higher municipal service fees depending on their size and use.
From a property tax perspective, both residential and commercial owners benefit from the same underlying system: low rates applied to conservative cadastral values.
Do Low Property Taxes Affect Property Values?
A common misconception among international buyers is that low property taxes indicate weak infrastructure or limited public services.
In reality, Puerto Vallarta benefits from a diverse local economy supported by tourism, business activity, and municipal fees. This allows the city to maintain public services while keeping property taxes affordable.
Historically, Puerto Vallarta has demonstrated that low ongoing ownership costs and long-term property value appreciation can coexist, making it an attractive destination for both lifestyle buyers and investors.
Final Thoughts on Property Taxes in Mexico
Understanding how much property taxes are in Mexico is a key part of evaluating the true cost of owning real estate in Puerto Vallarta.
The combination of:
• Low tax rates
• Conservative cadastral assessments
• Early-payment discounts
• Potential senior benefits
creates a level of affordability that is difficult to match in the United States or Canada.
For buyers seeking long-term predictability—whether purchasing a primary residence, vacation home, or investment property—property taxes in Puerto Vallarta remain one of the market’s strongest advantages.
Soy Marco Mata
AMPI-Certified Real Estate Advisor | Licensed Mexican Attorney
Tropicasa Realty,