Taxes
Mexico — Tax: Capital Gains
Mexican tax residents are taxed on worldwide capital gains as ordinary income under the progressive ISR scale (1.92%-35%), except gains from shares sold through the Mexican Stock Exchange, which are subject to a flat 10% withholding on the net gain. Non-residents selling Mexican real estate can elect between a flat 25% of gross proceeds or 35% of the net gain. The sale of a taxpayer's principal residence is exempt from capital gains tax if requirements are met, capped at roughly $244,560 USD of gross proceeds and limited to one exempt sale every three years. Holding period matters: shorter holding periods can face higher effective rates, while longer holds may benefit from reduced rates or full exemption depending on asset type.
VerifiedProfessional tax guide — not a government sourcePwC Worldwide Tax Summaries / SATLast reviewed: 2026-07-19
Key facts
- Tax residents: worldwide capital gains taxed as ordinary income (1.92%-35% ISR scale), except Mexican Stock Exchange shares at a flat 10% on net gain.
- Non-residents selling real estate: choose flat 25% of gross proceeds or 35% of net gain.
- Principal residence sale exemption: capped at ~$244,560 USD gross proceeds, limited to one exempt sale per 3 years.
- Holding period affects the applicable rate/exemption eligibility.
Costs
- Non-resident real estate capital gains (elect one): 25% of gross proceeds OR 35% of net gain
- Mexican Stock Exchange share gains: flat 10% of net gain
- Principal residence exemption cap: ~$244,560 USD gross proceeds, once per 3 years
Timelines
- Principal residence exemption frequency limit: one exempt sale every 3 years
Common mistakes
- Assuming the principal residence exemption applies unconditionally — it is capped in value and limited to once every 3 years.
- Overlooking the choice between 25% of gross proceeds vs 35% of net gain for non-resident real estate sales — the better option depends on the cost basis.