Property taxes in Cabo San Lucas are remarkably low compared to the United States, averaging just 0.1% of assessed value annually. A $500,000 property typically pays $500-$800 USD per year in predial taxes. However, total ownership costs including HOA fees, fideicomiso maintenance, and utilities range from $5,000 to $25,000 annually depending on property type. Here is the complete 2026 breakdown every owner needs.
1. Predial Tax Rates: How Mexico Calculates Property Tax
Mexico's property tax, called predial, is calculated based on the valor catastral (cadastral value) assigned by the municipal government. This assessed value is typically 30-60% below the property's actual market value, which is why effective tax rates are so low.
The predial rate in the Los Cabos municipality varies slightly by property type and zone but generally falls between 0.08% and 0.15% of the assessed value. The exact rate is set annually by the municipal government and published in the state's Boletin Oficial.
| Market Value | Assessed Value (est.) | Annual Predial Tax | Effective Rate |
|---|---|---|---|
| $250,000 USD | $100,000 - $150,000 | $200 - $400 | 0.08 - 0.16% |
| $500,000 USD | $200,000 - $300,000 | $500 - $800 | 0.10 - 0.16% |
| $1,000,000 USD | $400,000 - $600,000 | $900 - $1,500 | 0.09 - 0.15% |
| $2,000,000 USD | $800,000 - $1,200,000 | $1,800 - $3,000 | 0.09 - 0.15% |
| $5,000,000 USD | $2,000,000 - $3,000,000 | $4,000 - $7,000 | 0.08 - 0.14% |
Compare these rates to US property taxes where the national average is 1.1% of market value. A $500,000 home in the US pays approximately $5,500 per year versus $500-$800 in Cabo. That difference alone is $4,700-$5,000 per year, or roughly $47,000-$50,000 over a decade of ownership.
2. How to Pay Your Predial Tax
Predial tax is paid annually to the municipal government of Los Cabos. There are several payment methods available.
- In person: Visit the Catastro (tax office) in San Jose del Cabo, located on Boulevard Mijares. Bring your property's catastral number and a valid ID. Cash, debit cards, and bank transfers are accepted.
- Online: The Los Cabos municipality offers online payment through their official portal at loscabos.gob.mx. You will need your catastral number and a Mexican bank card or SPEI transfer.
- Through your property manager: Most property management companies in Cabo San Lucas will handle predial payments on your behalf, typically for a small service fee of $50-$100 USD.
- Through your notario: Some notarios offer annual tax payment services as part of ongoing client relationships.
Early payment discount: Paying your predial in January or February earns a discount of 15-20%, depending on the year's municipal budget. For a $1,000 tax bill, the early payment discount saves $150-$200. This is one of the easiest savings available to property owners.
3. HOA Fees by Community
Homeowner association (HOA) fees vary dramatically across Los Cabos communities. Luxury resort communities with extensive amenities charge significantly more than basic condominium complexes.
| Community | Monthly HOA | Annual HOA | Amenities Included |
|---|---|---|---|
| Pedregal de Cabo | $400 - $800 | $4,800 - $9,600 | Security, roads, beach club |
| Palmilla | $500 - $1,200 | $6,000 - $14,400 | Security, golf, beach, club |
| El Tezal condos | $150 - $350 | $1,800 - $4,200 | Pool, security, maintenance |
| Costa Palmas | $600 - $1,500 | $7,200 - $18,000 | Full resort amenities |
| Cerritos Beach condos | $100 - $250 | $1,200 - $3,000 | Pool, common areas |
| Cabo Bello/Tezal | $200 - $400 | $2,400 - $4,800 | Security, pool, landscaping |
HOA fees in Mexico are not tax-deductible for personal residences but can be deducted as an expense if the property generates rental income. Always verify current HOA fees before purchasing, as they can increase annually.
4. Fideicomiso Fees: The Trust You Cannot Avoid
Foreign property owners in the restricted zone (which includes all of Los Cabos) must hold their property through a fideicomiso bank trust. This creates an ongoing annual cost.
| Fideicomiso Cost | Amount (USD) | Frequency |
|---|---|---|
| Initial setup | $2,000 - $3,000 | One-time at closing |
| Annual maintenance | $550 - $1,000 | Yearly |
| Trust renewal (50 years) | $2,000 - $3,000 | Every 50 years |
| Substitution of beneficiary | $1,000 - $2,000 | When selling |
Major banks offering fideicomiso services in Los Cabos include Scotiabank, BBVA, Monex, and Banorte. Fees vary by institution, so comparing quotes can save $200-$400 annually. Your notario publico can recommend the most cost-effective option.
5. Total Annual Ownership Cost by Property Type
Here is a realistic total annual cost of ownership for the most common property types in Los Cabos, combining all recurring expenses.
| Expense Category | Condo ($500K) | Home ($1M) | Luxury Villa ($3M) |
|---|---|---|---|
| Predial tax | $500 - $800 | $900 - $1,500 | $3,000 - $5,000 |
| HOA fees | $2,400 - $6,000 | $4,800 - $9,600 | $7,200 - $18,000 |
| Fideicomiso | $550 - $800 | $550 - $1,000 | $800 - $1,000 |
| Property insurance | $600 - $1,200 | $1,200 - $2,500 | $3,000 - $6,000 |
| Utilities (electric, water, gas) | $1,500 - $3,000 | $2,500 - $5,000 | $5,000 - $10,000 |
| Maintenance/repairs | $500 - $1,500 | $2,000 - $5,000 | $5,000 - $15,000 |
| Total Annual Cost | $6,050 - $13,300 | $11,950 - $24,600 | $24,000 - $55,000 |
Even at the high end, total ownership costs in Cabo San Lucas are typically 40-60% lower than comparable properties in US resort destinations like Scottsdale, Palm Springs, or Maui when factoring in property taxes, insurance, and HOA fees.
6. Cabo vs US Property Tax Comparison
The property tax savings alone make Cabo an attractive option for US buyers considering a second home or retirement property.
| Location | Property Value | Annual Tax | Effective Rate |
|---|---|---|---|
| Cabo San Lucas | $500,000 | $500 - $800 | 0.10 - 0.16% |
| Scottsdale, AZ | $500,000 | $3,250 | 0.65% |
| San Diego, CA | $500,000 | $5,250 | 1.05% |
| Maui, HI | $500,000 | $1,750 | 0.35% |
| Austin, TX | $500,000 | $9,000 | 1.80% |
| Miami, FL | $500,000 | $5,000 | 1.00% |
Over a 10-year ownership period, a $500,000 property in Cabo saves $25,000-$85,000 in property taxes alone compared to equivalent US locations. When combined with lower labor costs for maintenance, landscaping, and home services, the total cost advantage is substantial.
7. Tax Tips for Cabo Property Owners
Maximize your savings and maintain compliance with these practical strategies.
- Pay early: The January/February early payment discount of 15-20% is free money. Set a calendar reminder every year.
- Challenge your assessed value: If your catastral value seems high relative to the 30-60% of market value norm, you can request a reassessment at the Catastro office.
- Deduct rental expenses: If you rent your Cabo property, predial taxes, HOA fees, fideicomiso costs, insurance, maintenance, and depreciation are all deductible on your US tax return (Schedule E).
- Keep records: Maintain copies of all predial receipts. They are required for property sales to verify no outstanding tax liens.
- Hire a cross-border CPA: US-Mexico tax compliance has nuances around FBAR reporting, FATCA, and tax treaty provisions. A specialist CPA typically charges $500-$1,500 annually and can save you significantly more in optimized filings.
For more details on the buying process and associated costs, read our guide on buying property in Mexico as an American, or contact our team for a personalized cost analysis for your target property.
Frequently Asked Questions
How much are property taxes in Cabo San Lucas?+
Property taxes (predial) in Cabo San Lucas average 0.1% of the government-assessed value (valor catastral) annually. A property assessed at $500,000 USD typically pays $500-$800 USD per year. The assessed value is usually 30-60% below market value, keeping tax obligations low. An early payment discount of 15-20% is available in January and February each year.
How do I pay property taxes in Mexico?+
Property taxes (predial) are paid at the municipal tax office (Catastro) in Cabo San Lucas or San Jose del Cabo, or online through the Los Cabos municipal government website. Payment is due annually, with the tax year running January to December. Early payment in January or February earns a 15-20% discount. You will need your property's catastral number (property ID) and your RFC or CURP number.
What is the total annual cost of owning property in Cabo?+
Total annual ownership costs in Cabo vary by property type. A $500,000 condo in an HOA community costs approximately $8,000-$15,000 per year including predial tax ($500-$800), HOA fees ($3,000-$8,000), fideicomiso maintenance ($550-$1,000), property insurance ($800-$1,500), and utilities ($2,000-$4,000). A standalone home without HOA costs less, typically $4,000-$8,000 annually.
Are Mexico property taxes deductible on US taxes?+
Mexican property taxes may be deductible on your US tax return under the foreign tax credit or as an itemized deduction, similar to US property taxes. If you rent your Mexico property, predial taxes and other ownership costs are deductible as rental expenses on Schedule E. Consult a cross-border tax professional, as US-Mexico tax treaty provisions may affect your specific situation.
What is the fideicomiso annual fee?+
The fideicomiso (bank trust) annual maintenance fee ranges from $550 to $1,000 USD per year, depending on the bank. This is a mandatory annual cost for foreign property owners in the restricted zone, which includes all of Los Cabos. The fee is paid to the Mexican bank that holds the trust and is separate from property taxes and HOA fees.
Aaron Cuha
Real Estate Advisor & Los Cabos Market Expert
Real estate advisor and founder of Living In Cabo. 15+ years helping families navigate complex real estate decisions. Strategic partner with Ronival — Baja's largest brokerage.
