If you’re thinking about buying property in Los Cabos, one of the first (and most important) questions that comes up is: What are property taxes like?

The short answer?
They’re significantly lower than what most buyers are used to in the U.S. or Canada—and that’s one of the many reasons Cabo continues to attract savvy investors and lifestyle buyers alike.

But there are a few key details you need to understand before making a purchase.

What Are Property Taxes Called in Mexico?

In Mexico, property taxes are known as Predial (sometimes misheard or misspelled, but officially Impuesto Predial).

These taxes are:

• Paid once per year
• Collected by the local municipality (in this case, Los Cabos)
• Based on cadastral value, not market value

Cadastral Value vs. Market Value

Here’s where things get interesting—and advantageous for buyers.

Unlike many markets in North America, property taxes in Mexico are calculated using the cadastral value, which is the government-assessed value of the property. This value is typically lower than the actual market value.

What does that mean for you?

• A property worth $500,000 USD might only pay a few hundred dollars per year
• Even luxury homes in the $1M–$3M range often have annual taxes under a few thousand dollars

For Ultra-Wealthy Investors (UWI) and Foreign Luxury Buyers (FLB), this creates a compelling long-term holding advantage with minimal carrying costs.

When Are Property Taxes Due?

Property taxes in Los Cabos are typically due in the first quarter of the year, and there are early payment incentives:

• January: ~20% discount
• February: ~15% discount
• March: ~10% discount

After March, penalties and interest may apply.

Strategic Tip:
Many experienced investors pay early every year to maximize savings—an easy win for optimizing ownership costs.

What Happens If Taxes Aren’t Paid?

While unpaid property taxes won’t immediately result in losing your property, they will create complications—especially when it’s time to sell.

Before closing any transaction:

• A notary will verify that all Predial taxes are fully paid
• Any outstanding balance must be cleared before title transfer

This is a critical checkpoint in every transaction in Cabo San Lucas and surrounding areas.

Foreign Ownership & Property Taxes

If you’re a foreign buyer purchasing near the coast, you’ll likely own through a Fideicomiso (bank trust).

Important clarification:

• The fideicomiso does NOT change your property tax obligations
• You still pay Predial just like a Mexican owner
• The trust has its own annual fee, separate from property taxes

For Foreign Luxury Buyers (FLB), this structure is standard and secure—but understanding the cost breakdown is key to confidence.

Building or Remodeling? Don’t Skip This Step

If you plan to build or renovate your property:

Make sure all construction is:

• Properly registered with the municipality
• Updated in the public property registry

Why it matters:

• Keeps your property records clean
• Avoids delays or legal issues when selling
• Ensures your assessed value is accurate

This is especially important for Pre-Construction Buyers (PCB) and those adding value to luxury homes.

Why This Matters for Cabo Investors

Low property taxes are one of the hidden advantages of owning real estate in Los Cabos.

For:

• Ultra-Wealthy Investors (UWI): Lower holding costs = stronger long-term ROI
• Retirees (HNW-R): Predictable, affordable annual expenses
• Digital Nomads (DNM): Minimal overhead for second homes or hybrid living

It’s not just about lifestyle—it’s about smart financial positioning.

Final Thoughts

Property taxes in Los Cabos are:

• Simple
• Affordable
• Predictable

And when compared to North American markets, they’re a major reason why so many buyers choose to invest here.

Thinking About Buying in Cabo?

If you’re exploring opportunities in Los Cabos and want clarity on:

• Total ownership costs
• Investment potential
• Best areas for your buyer profile

Reach out to Laidback Legacy. We specialize in guiding high-value buyers through every step—strategically, transparently, and with a long-term mindset.