What is Predial?
Predial
/preh-dee-AHL/
Quick Definition: Predial is Mexico's annual property tax paid to the local municipality where your property is located. It is calculated as a percentage of the property's assessed value (valor catastral) and is typically significantly lower than property taxes in the United States or Canada, often ranging from 0.1% to 0.3% of assessed value.
Mexico's Surprisingly Affordable Property Tax
Predial represents one of the most pleasant surprises for international property buyers in Mexico - an annual property tax that is remarkably affordable compared to what most North Americans and Europeans are accustomed to paying. This municipal tax funds local services such as street maintenance, public lighting, parks, and basic municipal operations. Unlike property taxes in many other countries, predial rates in Mexico have remained relatively low, making property ownership more accessible and affordable for both residents and international buyers.
The predial system in Mexico operates on assessed values that are typically much lower than market values, and the tax rates themselves are conservative. This combination results in annual property tax bills that often surprise foreign buyers with their affordability, particularly those coming from high-tax jurisdictions in North America or Europe.
Why Understanding Predial Matters for Bajío Buyers
For international buyers in Mexico's Bajío region, predial represents a significant ongoing cost advantage of Mexican property ownership. Understanding predial rates, payment schedules, and obligations helps buyers accurately budget for property ownership while appreciating the financial benefits of investing in Mexican real estate compared to their home countries.
Key Features of Predial Tax
Predial Rates in the Bajío Region
Predial rates vary by municipality throughout the Bajío region, but all remain remarkably affordable by international standards:
San Miguel de Allende:
- Residential properties: 0.15-0.25% of assessed value
- Early payment discount: 15% if paid by February
- Average annual bill: $200-800 USD for most properties
- Urban properties: 0.2-0.3% of assessed value
- Early payment discount: 20% if paid by January 31
- Average annual bill: $150-600 USD for typical homes
Guanajuato City:
- Residential rate: 0.1-0.2% of assessed value
- Early payment discount: 10% for January payment
- Average annual bill: $100-500 USD for most properties
Predial vs. International Property Taxes:
- Mexico (Bajío): $200-800 USD annually on $300,000 property
- Texas, USA: $6,000-9,000 USD annually on same property
- Toronto, Canada: $4,000-6,000 USD annually on same property
- California, USA: $3,000-4,500 USD annually on same property
How Predial is Calculated
Understanding predial calculation helps property owners anticipate their annual obligations:
Step 1: Assessed Value Determination
- Municipality establishes valor catastral (assessed value)
- Typically 30-60% of actual market value
- Updated periodically by municipal assessors
- Based on location, size, construction quality, and amenities
Step 2: Rate Application
- Municipal tax rate applied to assessed value
- Rates set annually by local government
- May vary by property type (residential, commercial, vacant land)
- Additional fees may apply for specific services
Step 3: Final Bill Calculation
- Base tax + municipal fees + special assessments
- Early payment discounts applied if applicable
- Payment options: annual lump sum or quarterly installments
Real-World Example
Patricia owns a $400,000 USD home in San Miguel de Allende. The municipal assessed value (valor catastral) is $160,000 USD (40% of market value). With San Miguel's residential rate of 0.2%, her annual predial is $320 USD. By paying in February, she receives a 15% early payment discount, reducing her bill to $272 USD for the entire year.
Predial Payment Process and Schedule
Each municipality in the Bajío region has specific payment procedures and schedules:
Typical Payment Timeline:
- Bills issued: December-January
- Early payment period: January-February (with discounts)
- Regular payment period: March-April
- Late payment period: May-December (with penalties)
- Payment options: Municipal offices, banks, online portals
Where to Pay Predial:
- Municipal treasury offices (Tesorería Municipal)
- Authorized banks and credit unions
- Online payment portals (varies by municipality)
- Convenience stores (Oxxo, 7-Eleven) in some areas
- Real estate management companies (for fee)
What You Need to Pay:
- Property address and account number
- Owner identification (RFC or official ID)
- Previous year's payment receipt (if available)
- Current year's bill or account statement
Consequences of Unpaid Predial
While predial amounts are modest, maintaining current payments is important for several reasons:
Short-term Issues:
Serious Implications:
Staying Current:
Predial for Absentee Owners
International buyers who don't live in Mexico year-round have several options for managing predial payments:
Property Management Services:
- Local companies handle annual payments for fee
- Typically charge $100-300 annually for tax management
- Provide documentation and receipt copies
- Handle any municipal correspondence
Self-Management:
- Online payment systems (where available)
- Trusted local contacts for payment assistance
- Annual visit during payment period
- Banking arrangements for automatic payments
Record Keeping for Absentee Owners:
- Keep all payment receipts (required for property sales)
- Maintain copies of annual tax bills
- Document early payment discounts received
- Store records both physically and digitally
Frequently Asked Questions
The notario público will verify that all predial payments are current before completing your property purchase. Any unpaid predial must be settled by the seller before the property can be legally transferred to you, ensuring you start with a clean tax record.
Predial rate increases are typically modest and regulated by state law. Most municipalities limit annual increases to inflation rates plus a small percentage. Dramatic rate increases are rare and usually require public hearings and approval processes.
No, predial rates are the same for all property owners regardless of nationality. However, the standard early payment discounts (typically 10-20%) are available to all owners who pay by the early deadline, providing significant savings.
Visit your municipal treasury office (Tesorería Municipal) with identification and proof of your new address. Most municipalities allow you to update your contact information easily, ensuring you receive your annual bill and important notices.
Related Terms
Valor Catastral
Assessed property value used for predial calculation
Tesorería Municipal
Municipal treasury office where predial is paid
Closing Costs
Predial clearance required for property transfers
Property Management
Services that can handle predial payments for absentee owners
Need Help Managing Your Mexican Property Taxes?
Our team can connect you with trusted local services to manage your predial payments and ensure you never miss the early payment discounts. Focus on enjoying your Bajío property while professionals handle the administrative details.