Renting Your Casita: The 30% Tax Rule for Foreigners

The guests have paid, the platform has paid out, and the money is in your account. Then comes the question every foreign owner eventually asks: what does Mexico want, and how much? The answer starts with one word — resident — because the two answers lead to two tax systems that barely resemble each other.

This guide walks through the 30% rule, why it hits gross rent and not net, what changes if Mexico calls you a resident, how the platforms withhold, and the paperwork that keeps it boring. Figures here are directional — as of 2026, confirm with a contador.

The rule

The 30% tax rule, plainly

Mexico's income tax — ISR, Impuesto Sobre la Renta — draws a hard line between residents and non-residents, and rental income sits on it. Rent from a Mexican property is Mexican-source income, taxed no matter where you live. The difference is how. Not a tax resident? The law applies a flat withholding to the rent — the figure quoted everywhere is roughly 30% of the gross payment. The tenant, or the platform in a short-term let, withholds it and remits it to the SAT, the Servicio de Administración Tributaria, Mexico's tax authority. You receive what is left.

As of 2026, 30% on gross is still the widely cited rate for rent paid to a non-resident, adjusted from time to time — a contador, a Mexican accountant, can confirm the current figure in minutes. Directionally the shape is stable: a non-resident landlord loses roughly three pesos of every ten the casita earns, before any hosting cost is paid.

Resident or not

Non-resident or resident: it changes everything

Two kinds of residency get mixed up here, and keeping them apart saves money. Immigration residency — the temporary or permanent card that lets you live in Mexico legally — is issued by the immigration authority and has nothing directly to do with taxes; we cover it in our guide to visas and residency in Mexico. Tax residency is defined by the income tax law, and it is decided by facts, not cards.

Mexico considers you a tax resident if your principal home — your casa de estancia permanente — is in Mexico, or if you spend more than 183 days in the country in a calendar year. Notice what is missing: a resident card. Many foreigners hold temporary residency yet spend most of the year abroad, and for tax purposes they remain non-residents. The reverse is possible too — enough tourist days and the calendar makes you a resident whether you meant it or not.

This single fact is the biggest lever in the whole topic. Get it wrong and you will overpay for years, or underpay and meet the SAT later. The table below puts the two systems side by side; treat the numbers as directional, as of 2026.

	Non-resident	Resident
Tax rate	Flat withholding, roughly 30% of gross rent, collected before you receive the money.	Progressive ISR on net income — roughly 1.9% up to about 35% by band.
What you can deduct	None. Expenses, mortgage interest, and depreciation do not reduce the bill.	Plenty. Maintenance, predial, utilities, management fees, and depreciation.
Who collects	Tenant or platform withholds and remits to the SAT.	You declare and pay, mainly through your annual filing.
Paperwork	An RFC so the withholding can be reported, little else day to day.	RFC, a registered tax regime, and a full annual declaration.
Best for	Short-term hosts who spend most of the year outside Mexico.	Long-term owners who live in Mexico or hover near the 183-day line.

Gross, not net

Why 'on gross' is the expensive word

The expensive word is gross. The non-resident's 30% applies to the full rent before you subtract a single cost — cleaning, repairs, new linens, the platform's commission, the mortgage, even depreciation. None of it reduces the bill. Say the casita earns the peso equivalent of $1,000 USD in a month: the non-resident loses $300 to withholding and receives $700, which must still cover every hosting cost. A resident with the same $1,000 and $400 of legitimate deductions pays ISR on $600 — and on a modest rental income that progressive rate lands well below 30%, often in the low teens.

Mexico takes its cut off the top of the rent — before the cleaning, the repairs, or the mortgage are paid. That is the entire meaning of 'on gross'.

That gap — 30% of everything versus a progressive slice of what is left — is why tax status, not occupancy, decides whether a casita pencils out. It is also why the famous figure frightens people who would pay far less as residents, and reassures people it should not. The withholding applies whether the rent arrives through a platform, a manager, or a handshake. If you are still deciding whether renting out the casita makes sense at all — demand by town, the build timeline, the management reality — our guide to rental income for land buyers walks through it.

The resident path

The resident path: RFC, deductions, and the 183-day clock

If Mexico does consider you a tax resident, the rental moves onto the resident track. You register with the SAT, obtain your RFC — Registro Federal de Contribuyentes, the tax ID — and declare the rent in your annual return, the declaración anual. ISR is progressive: as of 2026 the bands start around 1.9% and climb to roughly 35% at the top, and most casita owners land in the lower half. Then come the deductions: predial, the annual property tax — a separate, much smaller bill than income tax, explained in our guide to property taxes on Oaxaca land — plus maintenance and repairs, utilities you pay, management fees, and depreciation of the construction.

Then there is the clock. Cross 183 days in Mexico in a calendar year and you are a tax resident for that year, home-base rule aside. If you live near that line, log your entry and exit dates — the SAT and your contador will both want it. Residency has a flip side worth naming: your worldwide income becomes taxable here, not just the casita's rent. Foreign tax credits usually stop the same money being taxed twice, but the obligation is real and wider. That is the trade — a kinder rate on the casita in exchange for a fuller return.

The platforms

Airbnb and the platforms: who withholds what

In practice, most casitas here rent through Airbnb, with Vrbo and Booking.com behind it. They operate in Mexico through local entities, which makes them withholding agents — the SAT does not have to chase you because the platform collects for it. On each booking it calculates ISR on the taxable portion, withholds it from your payout, remits it to the SAT, and gives you a year-end statement. It also collects IVA — the Impuesto al Valor Agregado, Mexico's 16% value-added tax — on lodging, charged to the guest on top of the nightly rate. Not a cost out of your pocket, but part of why Mexican prices look higher at checkout.

To be onboarded you need a CURP — the Clave Única de Registro de Población, the personal code every taxpayer has — and an RFC; the platform cannot withhold or report without it. What it withholds depends on your status. Resident hosts generally fall under a dedicated regime for plataformas tecnológicas, with withholding rates typically far below the non-resident figure; the annual declaration settles any difference. For non-resident hosts the withholding is meant to satisfy the flat-rate obligation — but confirm it does, because the fit between platform rules and the non-resident regime is exactly what a contador checks in minutes. The year-end receipt is the document they will want.

The paperwork

CURP, RFC, and finding a contador

The paperwork sounds like a wall and is really three items. The CURP comes first — a free, government-issued code built from your name and birth date, obtainable with your passport; think of it as a Mexican Social Security number. The RFC comes second, requiring an appointment, a cita, at a SAT office with your passport, CURP, and proof of address. Foreigners do this every day — bureaucratic and occasionally slow, but routine. Do it before the first booking, because the platform asks for the RFC to set up payouts, and the notario will ask about your tax situation the day you sell.

The third item makes the other two painless: a contador. A good local accountant charges modest, predictable fees — typically a few hundred to a couple of thousand pesos per filing — and earns them back many times over. Your contador tells you which regime you belong in, checks that the platform's withholding matches your obligation, keeps the deduction list honest, and files under their own electronic signature, so you never wrestle the SAT portal at midnight in Spanish. On a coast full of expats the reliable contadores are known by name — ask neighbours, your notario, the host groups. Cheap insurance, and the best tax advice in this article is the sentence that sends you to one.

If you don't file

What happens if you don't file

The temptation to let the first year slide is real, and it costs more than the tax. The SAT can determine what you owe and add the layers: multas, fines for not filing or filing late; recargos, interest that accrues monthly; and actualización, the inflation adjustment that quietly grows the debt. On a small casita those layers can multiply the original bill several times over. And the authority is not guessing — the platforms report host income and withholding every year, so the SAT already knows what your casita earned before you filed a single form. Off-platform cash rentals leave less trail, but bank deposits tell the same story.

The clean path is the cheap path: get the RFC, file, pay. For most small landlords the true bill is far smaller than the dread — especially for residents who claim the deductions they are owed — and a contador can often bring a late landlord into compliance with one corrective filing. Nobody was ruined paying a few thousand pesos of ISR on a casita. People have been annoyed by fines that started smaller and grew while ignored.

The US side

The US side: credit, not double tax

If you are a US citizen or resident, the US taxes your worldwide income, including rent from a casita in Oaxaca. The point of the US-Mexico tax treaty and the foreign tax credit is to stop a double bill: the ISR you pay Mexico generally becomes a credit against your US tax on the same rent, and for many small landlords it offsets most of what the US would otherwise collect. The treaty also settles which country gets first claim and can affect withholding treatment — details where generalities stop being useful.

The arrangement that works: a US CPA or enrolled agent who actually handles Mexico, working alongside your contador. Two advisors sounds like overhead until the alternative is a misapplied credit, a missed deadline on either side of the border, or a double-taxed year one form would have prevented. Every number here is directional — rates move, brackets shift, and your situation is yours alone. Treat this as information, not tax advice, and confirm the details with a contador before relying on any of it.