Recover the unconstitutional “ISAI” Real estate tax or avoid paying it. (Application: Mexico City)

Calatrava’s Tax and Administrative Law teams are prepared to assist you in recovering or avoiding payment of the Tax from Property Acquisition (“ISAI”), paid upon acquisition of property in Mexico City.

The Federal Judicial Branch declared the ISAI tax unconstitutional. The basis for this decision was that the mechanism for calculating the tax violates the principle of tributary proportionality, established in Article 31, Fraction IV of the Federal Constitution.

According to the Código Fiscal de la Ciudad de Mexico (“CFDMX”), the ISAI is applied upon the acquisition or transmission of real estate based, and it is determined by a tariff that shifts the amount of taxes to be paid in function with the value of the property acquired.

In strict theory, the tabulation should guarantee that those who acquire real estate with higher values pay higher taxes than those that acquire properties with lesser value.

Nevertheless, the PJF has indicated that the tariff is regressive. Due to an error in the formula for determining the tax, the ISAI to be paid diminishes as property values increase, notwithstanding that it should increase. Under these conditions, the tax implications are more onerous for those who acquire properties of lesser value, therefore disproportionate and accordingly, unconstitutional.

To date, the court’s declaration of unconstitutionality is considered obligatory jurisprudence in Mexico City. Thus, the possibility exists to require its application, and accordingly recover ISAI paid upon acquisition of real estate in Mexico City. Additionally, it may be possible to obtain protection against the regulation whereby the ISAI need not be paid, notwithstanding that the law has not yet been repealed.

Our partners are prepared to support you in this process; contact us.

Rafael Cardenas: [email protected]
Francisco D. Melendez: [email protected]


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