If you’re planning to relocate to Mexico—or already investing in property here—there’s one critical area you cannot afford to overlook:
Tax planning for expats.
We’ve seen far too many people make the move to Mexico, buy real estate, or start a business here, only to get hit with unexpected (and completely avoidable) tax bills—sometimes totaling tens of thousands of dollars.
Whether you’re coming to Mexico to live full-time, retire, or invest in real estate, here’s what you need to know to avoid costly mistakes and make the most of your move.
1. Tax Planning for Expats Starts with U.S. Tax Rules
Let’s start with the U.S., because even if you move to Mexico full-time, Uncle Sam still wants his cut.
Unlike most countries, the U.S. taxes based on citizenship, not residency. That means you’re required to report—and potentially pay taxes on—your global income, even if you’re living in Mexico year-round.
This becomes even more complex if you own a business. You’ll need to:
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Register your company in a tax-friendly state like Wyoming, Texas, or Florida
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Maintain legal residency in that state to avoid state income taxes
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Report your foreign accounts and income correctly (FBAR, FATCA, etc.)
Without proper tax planning for expats, it’s very easy to end up paying taxes to multiple U.S. states and the federal government—even if you’re not living there.
2. Understand Mexico’s Tax Residency Rules
Now let’s talk about Mexico—your new home.
Mexico has a rule that catches many expats off guard:If you spend more than 183 days in the country in a year, you’re considered a tax resident, which means your worldwide income becomes taxable in Mexico too.
Of course, with the right tax strategy then this isn’t an issue.
And that’s just the beginning. Here are a few things international real estate investors in Mexico need to understand:
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If you’re earning rental income, it needs to be declared locally
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If you sell a property, you could be subject to capital gains tax—often at much higher rates for foreigners
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Without the right structure (like using a Mexican corporation or declaring it as your primary residence), your tax liability can skyrocket
This is why tax planning for expats relocating to Mexico is essential—before you move, buy, or sell.
3. Real Estate Capital Gains Surprises in Mexico
We’ve seen this scenario too many times:
An expat buys a beautiful home in Mexico. A few years later, they sell it. Then comes the shock—a massive tax bill from the Mexican government.
Why? Because they didn’t structure the sale properly.
Here’s the reality:
Mexico taxes foreigners differently when it comes to real estate sales—and if you’re not properly advised, you could lose a significant chunk of your profits.
4. Why Most U.S. Accountants Don’t Handle Expat Taxes
This might surprise you, but most U.S. accountants won’t work with expats—especially those living in Mexico or running businesses internationally.
The U.S. government imposes heavy compliance burdens on Americans living abroad, and not every CPA is trained to deal with:
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Foreign tax credits and treaties
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Dual filing requirements (U.S. and Mexico)
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Passive foreign investment company (PFIC) rules
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Reporting foreign-owned companies or trusts
We’ve had clients who were forced to part ways with long-time accountants simply because they couldn’t handle the complexity of expat tax law.
That’s why we work with specialized, cross-border professionals who understand both U.S. and Mexican tax systems and can create a plan that protects your wealth on both sides of the border.
5. The Smart Mover’s Advantage: Save More, Stress Less
If you’re relocating to Mexico to live a better life, build wealth, or invest in real estate, then every dollar you save in taxes helps fund that freedom.
With the right tax strategy, you can:
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Avoid double taxation
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Reduce or eliminate capital gains tax
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Structure your real estate and business deals more effectively
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Reinvest your savings into your life in Mexico—travel, family, or growing your portfolio
This is how experienced international real estate investors and long-term expats protect themselves. Not with guesswork—but with solid tax planning for expats from day one.
Final Thoughts: Don’t Let Taxes Undermine Your New Life in Mexico
Moving to Mexico is an incredible opportunity—but without proper tax planning, your dream life could come with an unexpected price tag.
At Entrepreneur Expat, we specialize in helping expats relocate to Mexico the smart way. That includes access to vetted legal and tax experts in both the U.S. and Mexico who know exactly how to structure your move, your business, and your investments for long-term success.
Ready to relocate to Mexico without the tax surprises?
👉 Book a free consultation and let’s talk about how to make your move as financially efficient as it is exciting.
Want to look at international properties?
Check out our international MLS, Expat Property Search.