Since 2020, the Congress of Mexico City approved updates to the rates for the Property Acquisition Tax in Mexico City, also known as the Real Estate Acquisition Tax (ISAI, per its acronym in Spanish), which has led various judicial bodies to rule on its constitutionality. These bodies have declared that the ISAI rate update is unconstitutional, arguing that it lacks progressivity.

A key issue is the inconsistency in the criteria used to determine the effects of injunctions granted by these judicial bodies. Throughout the years, some resolutions have resulted in the complete exoneration of the ISAI, while others have mandated partial or full payment of the tax, resulting in conflicting outcomes. On May 16, 2024, the Collegiate Circuit Court (Pleno Regional en Materias Administrativas y Civil de la Región Centro-Norte de la Ciudad de México) issued a rresolution to resolve this discrepancy regarding ISAI criteria for the 2021 and 2022 fiscal years. In this resolution, the court determined that appeals (amparos) granted should result in complete exemption from  ISAI for the appellant, aiming to prevent further controversy. This rresolution is relevant for the current year and for pending appeals, as the lack of progressivity in ISAI determination persists. In addition, this resolution establishes mandatory case law for Mexico City judicial bodies.

Our team of experts is available to address any questions or comments you may have on Property Acquisition in Mexico City.

Interested in industrial Poles in the Mexican State of Yucatán? Read our Tax Alert on Welfare Industrial Poles Decree (Progreso I and Merida I).

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