Buying Florida Property from Mexico: Worldwide Income, the Treaty and US Financing
If you are a tax resident of Mexico, the Ley del Impuesto sobre la Renta taxes you on all your income wherever the source is [1], so rent from a Florida home belongs in your Mexican annual return; you may be able to credit US tax paid, subject to the conditions in article 5 of the LISR [1], so ask a Mexican tax professional. A US-Mexico income tax treaty exists [2][3], and financing for buyers without a Social Security number runs through foreign-national loan programs.
Does Mexico tax the rent or sale of my Florida property?
Article 1 of the Ley del Impuesto sobre la Renta (LISR) says residents in Mexico owe income tax on all their income, regardless of where the source of wealth is located [1]. For an individual, Article 90 says individuals resident in Mexico who obtain income in cash, in goods, in credit, in services or of any other type are subject to the tax [1].
Article 150 says individuals who obtain income during a calendar year, other than exempt income and income on which a final tax was paid, must pay their annual tax by filing a return in April of the following year [1]. The copy of the law we read is the one posted by the Cámara de Diputados, which states it is current through a reform published in the Diario Oficial on 1 April 2024, so ask a Mexican accountant whether later changes affect you.
We did not find a SAT page we could read on this topic: sat.gob.mx returned an access error to our automated requests. Use the SAT portal or a contador to confirm how foreign rent and any gain on a sale are reported.
Will I be taxed twice, in the US and in Mexico?
Article 5 of the LISR allows residents in Mexico to credit, against the Mexican income tax they owe, the income tax paid abroad on income from a foreign source, provided it is income on which Mexican tax is owed and the accumulated income includes the foreign tax paid [1].
On the US side, the IRS says income from US real property owned by a nonresident alien is taxed at 30 percent (or a lower treaty rate), and an owner holding the property to earn rent may elect to treat it as effectively connected income, which permits deductions and taxes net income at graduated rates [4]. Which approach yields a better result, and how the credit works in your case, is a question for tax professionals on both sides.
What does the US-Mexico income tax treaty cover for an individual owning a US home?
Mexico appears on the IRS "United States Income Tax Treaties - A to Z" page [3]. The IRS Mexico page lists the income tax treaty (1992), its technical explanation, a protocol (2003) and the technical explanation of that protocol [2].
The IRS pages we read do not say how the treaty treats rent or sale proceeds from US real estate for an individual, and we are not going to paraphrase a treaty we have not read article by article. Treat the treaty as a reason to ask a cross-border tax professional, not as a promise of a lower tax.
How does a mortgage work for a buyer living in Mexico?
Buyers who live abroad and have no Social Security number generally look at foreign-national loans. They are lender-specific, so we do not publish ratios, minimum down payments or rates; we share what our lending partners require after reviewing your file. Global G Home Loans is a mortgage broker; we do not give tax, legal or foreign-exchange advice.
What the federal rules say about lending in general: a lender making a covered consumer mortgage secured by a dwelling must consider items such as current or reasonably expected income or assets, credit history and debt obligations, and must verify what it relies on with reasonably reliable third-party records [5]. That rule, 12 CFR 1026.43, applies to consumer credit secured by a dwelling [5]; Regulation Z does not apply to credit extended primarily for a business, commercial or agricultural purpose, so a business-purpose investment loan, such as a DSCR loan, can fall outside it [9]. For a Mexican borrower that commonly means organizing bank statements and income records from Mexico, with translations where needed.
What should I expect on source of funds and on a future sale?
FinCEN's page on its Residential Real Estate Rule says that on March 19, 2026 a federal court vacated the rule [8]. Title agents and lenders may still ask about the source of funds under their own procedures, so keep transfer records.
On a later sale, FIRPTA applies when a foreign person disposes of a US real property interest. The IRS says the buyer is generally the withholding agent, the general rate is 15 percent of the amount realized, and a reduced or no-withholding exception exists for a buyer who will live in the property, depending on price [6]. The IRS says individuals ineligible for a Social Security number can obtain an ITIN for the taxpayer ID these transactions require [7].
Frequently asked questions
Do Mexican residents pay Mexican tax on income from abroad?
Article 1 of the LISR says residents in Mexico owe income tax on all their income, wherever the source is located [1].
Sources: Ley del Impuesto sobre la Renta (texto vigente, última reforma DOF 01-04-2024)
When is the annual return due for individuals?
Article 150 of the LISR says individuals with income during a calendar year, other than exempt income and income taxed with a final tax, pay their annual tax by filing a return in April of the following year [1]. Confirm current rules with the SAT or an accountant.
Sources: Ley del Impuesto sobre la Renta (texto vigente, última reforma DOF 01-04-2024)
Can I credit US tax against Mexican tax?
Article 5 of the LISR allows residents in Mexico to credit income tax paid abroad on foreign-source income, subject to its conditions [1].
Sources: Ley del Impuesto sobre la Renta (texto vigente, última reforma DOF 01-04-2024)
Does the United States have an income tax treaty with Mexico?
Yes. Mexico is listed on the IRS A-to-Z treaty page, and the IRS Mexico page lists a 1992 income tax treaty and a 2003 protocol with technical explanations [2][3]. What it means for your specific property is a question for a cross-border tax professional.
Sources: Mexico - Tax treaty documents; United States Income Tax Treaties - A to Z
How is US rental income of a nonresident taxed without a treaty benefit?
The IRS says income from US real property owned by a nonresident alien is taxed at 30 percent (or a lower treaty rate), with an election to treat it as effectively connected income so net income is taxed at graduated rates [4].
Sources: Nonresident aliens - real property located in the U.S.
Will the lender verify my income and assets from Mexico?
For consumer credit secured by a dwelling, the lender must verify the information it relies on to determine repayment ability using reasonably reliable third-party records [5]; business-purpose investment loans can fall outside that rule [9]. Lenders of foreign-national loans may ask for additional items; we tell you what our lending partners require.
Sources: 12 CFR 1026.43 Minimum standards for transactions secured by a dwelling; 12 CFR 1026.3(a), Exempt transactions: business, commercial, agricultural, or organizational credit
Sources
- Ley del Impuesto sobre la Renta (texto vigente, última reforma DOF 01-04-2024). Cámara de Diputados del H. Congreso de la Unión. Artículos 1, 5, 90 y 150. Accessed .
- Mexico - Tax treaty documents. Internal Revenue Service (IRS). Accessed .
- United States Income Tax Treaties - A to Z. Internal Revenue Service (IRS). Accessed .
- Nonresident aliens - real property located in the U.S.. Internal Revenue Service (IRS). Accessed .
- 12 CFR 1026.43 Minimum standards for transactions secured by a dwelling. eCFR / Consumer Financial Protection Bureau (Regulation Z). (c)(2) and (c)(3). Accessed .
- FIRPTA withholding. Internal Revenue Service (IRS). Accessed .
- ITIN guidance for foreign property buyers and sellers. Internal Revenue Service (IRS). Accessed .
- Residential Real Estate Rule. Financial Crimes Enforcement Network (FinCEN). Accessed .
- 12 CFR 1026.3(a), Exempt transactions: business, commercial, agricultural, or organizational credit. Consumer Financial Protection Bureau (Regulation Z). (a) An extension of credit primarily for a business, commercial or agricultural purpose is exempt; 12 CFR 1026.43(a): the ability-to-repay section applies to any consumer credit transaction secured by a dwelling. Accessed .