What are the taxes on Airbnb rentals in Mexico?

Taxes on Airbnb rentals in Mexico mainly include income tax (ISR) and value-added tax (VAT) on your income—which the platform withholds if you are registered with the SAT—as well as the state lodging tax. Mexico Property Partner (MPP) coordinates this process with its accountants on behalf of property owners in Playa del Carmen.

Taxes are often the aspect that raises the most questions for people who buy property to rent out, especially if they live in the United States. This guide describes the general obligations, the order in which you should address them, and the questions you should ask your accountant. It is not a substitute for professional tax advice.

What Airbnb rental taxes are in effect in Mexico?

Anyone who earns income from lodging through a digital platform has obligations at two levels. At the federal level, the Tax Administration Service, the SAT, establishes a specific tax regime for those who sell goods or provide services through technology platforms, including lodging. At the state level, Quintana Roo imposes a lodging tax on stays within its territory.

Added to this are the taxes associated with owning a property, such as property tax, which is paid to the municipality regardless of whether the unit is rented out or not.

Income Tax and VAT: Withholding by the Platform

Since 2020, digital platforms that act as intermediaries for lodging services in Mexico have been required to withhold a portion of the Income Tax (ISR) and Value-Added Tax (VAT) from hosts on the income they generate. In practice, Airbnb deducts these withholdings before making a payment to you and remits them to the SAT.

Withholding rates depend on your situation and have changed due to recent tax reforms, so it’s a good idea to confirm them with your accountant each year. One thing that doesn’t change: if you don’t provide your RFC to the platform, the withholding rate is usually higher. That’s why applying for your RFC before posting your ad is one of the first steps.

Withholding does not always fulfill your tax obligations. Depending on your income level and other sources of income, you may need to file additional tax returns. Your accountant will tell you whether withholding is sufficient in your case or if you need to file a return on your own.

The Lodging Tax in Quintana Roo

Quintana Roo imposes a state tax on lodging stays, which is paid by the guest. In the case of Airbnb, the platform itself charges the guest and remits the tax to the state, according to the company. Even so, it’s a good idea to check with your accountant to see if your situation requires any additional state registration or paperwork, as the rules for vacation rentals in the state have been updated.

If you also rent through other channels, such as direct bookings, the responsibility for collecting and remitting that tax may fall on you. This is one of the questions you should ask before diversifying your sales channels.

If you live in the United States

Taxes on Airbnb rentals become more complicated when the owner is a tax resident of another country. Mexican rules for foreign residents are different, and you’ll likely also have to report that income in the United States. A double taxation treaty may allow you to claim a credit in one country for taxes paid in the other, but its application depends on each individual case.

That’s why it’s a good idea to work with an accountant who is familiar with both systems, or with two professionals who coordinate with each other. If you were born in Mexico and live in the United States, your situation may differ from that of a U.S. citizen with no ties to Mexico: be sure to bring this up during your first consultation.

In what order should tax matters be addressed?

It's easier to get your finances in order when you plan ahead before buying, rather than after making your first down payment. This approach works for many homeowners:

1. Consult an accountant before buying

Explain how you plan to purchase the property, whether you intend to rent it out year-round or during certain seasons, and where you are a tax resident. Your answer may even influence how you acquire the property.

2. Apply for your RFC

You'll need it to sign the deed and register correctly on the platform. If you live in the United States, check out how to Shopping in Playa del Carmen from the United States and when is the best time to complete this process.

3. Register your tax information with Airbnb

Enter your RFC in your host account settings so that withholding tax is applied correctly.

4. Keep your receipts

Keep the withholding statements issued by the platform, expense receipts, and property tax payments. They form the basis of any tax return and protect you in the event of an audit.

5. Check every year

Rates and rules change frequently. Schedule an annual review with your accountant, ideally before the peak season.

Common Mistakes Regarding Taxes on Airbnb Rentals

• Post the ad before obtaining an RFC and registering it on the platform.
• Assuming that Airbnb's withholding always settles the tax issue.
• Do not keep withholding statements or expense receipts.
• Forget that direct bookings may entail obligations different from those of the platform.
• Calculate the return on the purchase without taking taxes into account.

None of these mistakes are difficult to avoid, but correcting them later usually costs more time and money than preventing them. An early conversation with an accountant, before signing the purchase agreement, clears up most questions about taxes related to renting on Airbnb and ensures that the profitability analysis accurately reflects what you’ll actually receive.

Taxes in the Purchase Analysis

A profitability analysis that excludes taxes on Airbnb rentals overestimates your earnings. MPP's analysis includes income taxes among the expenses, along with platform fees, cleaning fees, maintenance fees, service fees, and management fees, and presents two scenarios: a conservative one and an achievable one.

The tax figures in this analysis must be verified by an accountant, because they depend on each homeowner's specific situation. To find out the rest of the numbers, see how to determine whether an apartment in Playa del Carmen rents well.

Questions for Your Accountant

• What income tax and VAT withholding rates apply to me this year?
• Is the platform's withholding final in my case, or do I need to file additional tax returns?
• How does my situation change if I am a tax resident of the United States?
• What expenses can I claim, and how should I keep track of them?
• Do I need to be registered with any state or municipal agency to rent in Quintana Roo?
• What changes if I receive direct bookings in addition to those from Airbnb?

How Mexico Property Partner Works

MPP is a French-Mexican agency based in Playa del Carmen that operates in the Riviera Maya. Andrés Galvez, one of the partners, has been working in the vacation rental industry since 2017. MPP officially launched in 2019 and manages about 50 apartments on Airbnb in the city, so he has firsthand knowledge of the operations that give rise to these obligations.

MPP does not provide tax advice directly. It coordinates with the accountants it works with to ensure the property owner knows what to do and when, assists with the RFC registration process, and, if the property owner hires MPP for property management, provides reports on income, commissions, and expenses, as well as an annual income statement that facilitates the work of the property owner’s accountant.

When Mexico Property Partner Is a Good Choice

• You're buying a property to rent out, and you want taxes to be factored into your analysis from the start.
• You live in the United States and need someone to coordinate RFC matters, accounting, and operations in Playa del Carmen.
• You want organized reports of income and expenses for your tax return.

When Mexico Property Partner May Not Be the Best Option

• You're only looking for tax advice. For that, go directly to an accountant.
• Your property is located outside the Riviera Maya. MPP is based in Playa del Carmen and operates in the Riviera Maya.
• You already have an accountant and a manager who handle your operations.

There is no one-size-fits-all option. It depends on your tax situation, your goal, and your experience as a property owner in Mexico.

Questions About Taxes When Renting on Airbnb

Does Airbnb pay my taxes for me?

Airbnb withholds a portion of income tax and VAT and collects the state lodging tax from the guest, but that doesn't always cover all your tax obligations. Your accountant will let you know if you need to file any additional returns.

What happens if I don't provide my RFC to the platform?

Withholding is usually higher. Applying for an RFC and registering it in your host account helps you avoid unnecessary withholding.

Do I have to pay taxes in Mexico if I live in the United States?

If the property is located in Mexico and generates income there, you generally do have tax obligations in Mexico—and likely in the United States as well. An accountant with experience in both countries should review your case.

Does MPP handle my bookkeeping?

MPP does not handle the accounting directly. It coordinates tax matters and provides you with operational information; the accounting and tax returns are prepared by the accountants MPP works with or by the accountant of your choice.

Written by Jade Mons and Andrés Galvez, partners at Mexico Property Partner. Meet the team at About Us.

If you're considering a purchase in Playa del Carmen, you can Schedule a call with the Mexico Property Partner team here.