Mexico Lodging Regulations

Overview
Property
Overview

There is no national short-term rental association but there are quite a number of local short-term rental associations online that you may consider joining, you are not mandated to join any of the associations. The various associations are;

SMRA

Bigger pockets forum

Short-term rental-related events that are hosted in Mexico can be accessed here

Property
Short term rentals
What are short Term Rentals in the Country?

A** **short-term rental in Mexico is considered a furnished living space available for short periods of time, from a few days to weeks, usually for 30 days or less, but can be rented for as little as a week.. Short-term rentals are also commonly known as vacation rentals and are considered an alternative to a hotel. They are typically furnished and include amenities like WiFi, TV, kitchen appliances, and other amenities and can be in condominiums, apartments, or entire houses.

What is the maximum length of stay?

Short-term rentals typically allow stays of no more than 30 days. However, short-term rentals in Mexico are only limited to a maximum of fewer than six months.

Are there National Rules or Regulations Governing Short-Term Rentals in the Country?

There is no precise national rule regarding short-term rental in Mexico instead it is advisable for hosts to have a copy of their guest ID or passport and if possible a copy of the corresponding visa that allows them to stay in the country and also keep a guest register for security reasons.

Some cities and other local jurisdictions also regulate short-term rentals in areas such as short-term rental permits, insurance requirements, HOA bans or rules, registration, etc. Check your municipality to know what applies.

Is there any National Tax that affects short-term rental?

There are various taxes that affect short-term rental in Mexico both at the national and sub-national levels and there are two different tax regimes that affect short-term rental in Mexico, which are;

  1. Technology Platforms Regime
  2. Simplified Trust Regime (RESICO)

1) Technology Platforms Regime

This tax regime is advisable for individuals that use technology platforms such Uber, Airbnb, Fiverr, etc. as your income is taxed by a low fixed percentage. This percentage depends on the total income but the maximum tax rate is 10% and it allows the deduction of certain expenses such as property maintenance, energy fee, water bill, electricity, property taxes, monthly HOA fees, etc.

2) Simplified Trust Regime (RESICO)

This tax regime was created for individuals and businesses with incomes that do not exceed $3,500,000 pesos, and it does not allow tax deductions from expenses. it is basically for residents that have permanent residency. The tax rate is as low as 1-2.5%.

You can choose the tax regime that works for you, but generally, you must have electronic control of your income and expenses and issue electronic invoices in order to be tax compliant. You are also required to obtain your national tax ID known as the Federal Taxpayers Registry (RFC) with the Tax Administration Service (SAT). The four taxes that you may be required to pay as an STR host are;

  • Property Taxes: you may be required to pay property tax if you rent an entire property for a short-term lease. It is less than 2% of the actual amount of your property and it is due every January.
  • Rental Income: you are also required to pay a progressive rental income tax which ranges from 1.92% to 35%. It is popularly known as ISR.
  • VAT/Goods & Service Tax: you are required to levy an extra ****16% of the accommodation fee on your guests for their stay as VAT. It is collected when payment is made for the accommodation. It is popularly known as IVA.
  • Lodging Tax: this is a sub-national tax that varies from state to state that is also levied on guests. It is usually 3%, although it varies from place to place. It is popularly known as ISH. Jalisco’s lodging tax rate is 3%.

Check with your local municipality to know what applies.

Regulations
Are there any Permits, Licenses, or Registrations for Short-term Rentals in the Country?

There is no national permit, license, or registration for short-term rental owners in Mexico instead, you may be required to apply for tax permits at multiple levels of government. However, some local jurisdictions require you to obtain a permit to rent your property as the Mexican constitution gives municipalities the right to regulate tourist rentals, but it does not provide specific guidance on how to do so.

Permits are more commonly required if you are renting out property in commercial zones or in tourist areas. You may be exempted from obtaining permits in some cities if you live in an apartment and rent out a room. In these cases, you can just register with the city and obtain a tax identification number.

It is therefore important to check with your local jurisdiction to know the laws that apply. You can also check your sub-national jurisdiction page on this website to access the latest information on the laws and regulations that applies to your short-term rental properties in different parts of Mexico.

Is there any National Association for STR owners in the Country?

There is no national short-term rental association but there are quite a number of local short-term rental associations online that you may consider joining, you are not mandated to join any of the associations. The various associations are;

SMRA

Bigger pockets forum

Short-term rental-related events that are hosted in Mexico can be accessed here

short term
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Disclaimer

Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.

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