Apartment inherited among several siblings: taxes in Mexico

When parents leave an apartment and there are several sibling heirs, undivided co-ownership is the most common situation. It works while everyone agrees, but soon questions appear: what taxes are paid on inheritance? What if one wants to buy out the others? What if everyone prefers to sell? This guide goes through the three routes and the associated tax costs in Mexico.

How co-ownership arises

When the succession (testamentary or intestate) closes, the heirs sign the adjudication deed before a notary. If the apartment is not assigned to a single person, it remains in co-ownership in the proportions that the will or state civil code determines (for example, three siblings in equal parts: each with 33.33%).

Co-ownership is registered in the Public Property Registry and all co-owners appear in the entry.

Is ISR paid on inheritance?

No. Transmission by inheritance is exempt from ISR for the heir, under article 93 section XXIII of the LISR. Nor is there a federal inheritance tax. What there is are the costs of the succession process:

• Notarial fees of the succession.
• Appraisals.
• State ISAI on the inheritance transmission, depending on the state (in CDMX it accrues, in other states it is exempt or has a reduced rate).
• Public Property Registry fees for registration.

These costs are prorated among the heirs according to their shares.

Three paths when there are several siblings

1. Maintain co-ownership

Viable as long as siblings get along. Administrative decisions (rent, make improvements, authorize a third party to occupy) are made by majority. Disposition decisions (sell, mortgage) require unanimity. Maintenance, predial, water and repair expenses are shared by percentage.

If the apartment is rented, income is also shared and each sibling declares their part in their leasing regime before SAT.

2. One buys out the others

It is the most used solution when one of the siblings wants to keep the property. It involves a sale of the percentages of the other siblings to the sibling who stays. Each percentage sale generates:

• ISR for the sibling who sells their share, calculated on the gain (sale price minus adjudication value updated by INPC, minus documented improvements).
• State ISAI borne by the sibling who buys, on the proportion acquired.
• Notarial fees and RPP fees.

The homestead exemption can be applied for the sibling who sells their share if they actually resided in the apartment, within the article 93 LISR caps (700,000 UDIs per taxpayer, once every three years).

3. Sell the entire apartment to a third party

If all siblings agree, this is the cleanest exit. Each one receives the corresponding portion of the price and declares their individual taxable gain.

For each sibling:
Gain = (Sale price × % co-ownership)
     − (Adjudication value × % × INPC factor)
     − (Documented improvements × %)
Provisional ISR = Progressive rate of art. 152 LISR

If one qualifies for the homestead exemption and others do not, only the first is exempt on their share.

Co-ownership dissolution: an intermediate alternative

There is a "co-ownership dissolution" figure in public deed, distinct from a sale, that allows adjudicating the property to one of the co-owners by paying the others their share in money. In certain states, this figure has more favorable tax treatment than a formal sale: ISAI may be calculated only on the difference or be exempt if the local tax code allows.

It is wise to consult the notary and state treasury before choosing the path: what is saved on ISAI may not be saved on ISR.

Step-by-step process if one buys out the others

1. Agree on the price between siblings. It is wise to hire an independent appraisal to set the value of 100% of the property.
2. Determine the amount each selling sibling will receive according to their percentage.
3. Go to a notary public for the deed of percentage sale or co-ownership dissolution.
4. The notary calculates and withholds ISR from the selling siblings and settles the state ISAI of the buying sibling.
5. Register the new ownership in the RPP.
6. Each sibling reports the operation in their annual return for the year.

Practical case: three siblings in CDMX

An apartment in the Del Valle neighborhood was adjudicated in 2017 to three siblings at $4,500,000 MXN according to appraisal. In 2026, two of them decide to sell their share to the third, who already lives there. The current appraisal is $7,200,000 MXN.

• Each selling sibling transfers 33.33%, equivalent to $2,400,000 MXN.
• Proportional acquisition cost, updated by INPC, approximately $2,070,000 MXN each.
• Gain per sibling: $330,000 MXN. Estimated ISR at 15%–18%: $50,000 to $60,000 MXN each.

The buying sibling pays ISAI on $4,800,000 MXN (66.66% of the property), approximately between 3% and 4% in CDMX.

Mistakes to avoid

• Selling or buying between siblings "verbally" without recording the deed: legally it has no effect.
• Calculating ISR as if the inheritance had zero cost.
• Forgetting the homestead exemption when applicable.
• Not documenting improvement expenses: every documented peso reduces gain.
• Processing the sale before registering the inheritance adjudication.

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