Selling in Mexico
Selling your home in Mexico: ISR relief and the paperwork to prepare
Understand Mexico’s 700,000-UDI home-sale exemption, the three-year lookback and the records to prepare before the notary calculates ISR.
AI-generated illustration; not a photograph of a specific property or location.
When you decide to sell your home, the likely sale price is only part of the plan. You also need to know what you will receive at closing after settling the transaction’s commitments. Preparing the ISR calculation early helps you negotiate with a clear figure and plan your next purchase.
Mexico’s home-sale exemption can provide substantial relief when the conditions are met. Where tax is payable, acquisition records and documented improvements help establish the gain correctly. Start the review before accepting an offer, with the Mexican notary and your accountant where appropriate.
What the 700,000-UDI exemption means
Article 93 of Mexico’s Income Tax Law provides an exemption for the sale of a qualifying principal home up to 700,000 UDIS of sale consideration, subject to formalization before a legally authorized certifying official and other requirements. The ceiling relates to the sale price, not the profit. You must not have used the exemption on another home sale during the immediately preceding three years. [1]
The UDI is a unit whose peso value is published by Banco de México. The peso ceiling therefore changes. Its formula is 700,000 × the applicable UDI value; the notary uses the value relevant to the transaction. [2]
For illustration only: if one UDI were MXN 8.80, the ceiling would be MXN 6,160,000. MXN 8.80 is a rounded assumption, not today’s UDI quotation or a tax estimate for your sale.
Prepare evidence that it is your home
Article 155 of the regulations lists documents including an electoral identification card, tax receipts for electricity or fixed-line telephone service, and specified account statements. The address must match the property fully or in its essential elements. The provision permits qualifying documents in the taxpayer’s name or that of a spouse or direct-line ascendant or descendant. [3]
Review these while preparing the sale photographs and property file. If the address uses an old street name, the unit number is written differently or a bill is in a relative’s name, show it to the notary early. They can identify what is needed to document the match.
The purchase deed establishes acquisition, but does not by itself settle every requirement for principal-home treatment. Keep acquisition records and evidence of use as your home in separate, clearly organized sections.
A price above the ceiling may still receive partial relief
Exceeding 700,000 UDIS does not necessarily remove the entire exemption. The law provides for a calculation on the excess with proportionate deductions. [1]
Using the illustrative MXN 6,160,000 ceiling, a sale for MXN 8,000,000 leaves an excess of MXN 1,840,000: 23% of the price. That 23% is not an ISR rate. It illustrates the proportion used in the calculation. The taxable gain and resulting tax depend on acquisition cost, allowable deductions, adjustments and the circumstances of the sale.
Rather than applying a general percentage to your asking price, request a calculation based on your documents. Two possible closing prices can be modeled so you can see how your expected proceeds change.
Which expense records should you gather?
Article 121 covers documented acquisition cost, qualifying construction, improvements and extensions, certain notarial expenses, taxes, registration charges, appraisal costs and purchase or sale commissions paid by the seller, subject to the applicable rules. Ordinary upkeep is treated differently from qualifying improvements. [4]
For an extension, gather invoices, contracts and construction records. Keep routine repainting or sale-preparation expenses separate: improving presentation does not automatically make every expense deductible. Clearly categorized records make the review more useful.
Keep the purchase deed and records from the original acquisition. If documents are missing, ask what alternative evidence the rules allow in your situation. Do not discard a potentially relevant expense without checking, or include one without support.
Sale price, taxable gain and cash proceeds are different
If a mortgage remains outstanding, some sale proceeds may be used to pay it off. That affects the cash you receive, but the outstanding mortgage is not automatically an additional deduction from taxable gain.
Ask for a closing estimate separating the agreed price, loan payoff, selling costs, calculated tax and expected net proceeds. It makes planning the down payment for your next home much clearer.
The notary’s calculation and your filing obligations also need separate attention. Ask which receipts you will receive and whether the transaction must be reported in your annual return, including where an exemption applies.
Co-owners, foreign nationals and tax residence
For co-owned property, provide the deed, ownership shares and marital-property information. Do not simply multiply the exemption ceiling by the number of owners: the review must address each seller’s share and circumstances.
Nationality and tax residence are different matters. A migration card or RFC number alone does not settle every tax question. A seller resident abroad for tax purposes may fall under Article 160, a different regime from that for Mexican tax residents. Provide this information early so the notary and accountant can review the applicable treatment and any available calculation options. [5]
Common questions
Is the 700,000-UDI ceiling applied to profit?
No. It relates to the consideration received for the qualifying home sale. Gain is a separate calculation. [1]
Must I have owned the home for three years?
The stated lookback concerns using the exemption on another home sale in the preceding three years. It is not, by itself, a three-year ownership rule. Other requirements still apply. [1]
Does a higher price remove all relief?
Not necessarily. Partial relief and a proportional excess calculation may apply. [1]
When should I request the estimate?
Before committing to the final sale price, so you can negotiate with an informed view of your likely proceeds.
Sources and references
Editorial source review: 15/10/2026.