Publication
ISABI Tax Rate Increase Goes Statewide in Baja California Sur
By Alonso Sandoval and Carlos Sugich
Los Cabos Municipality Led the Change in 2025
As previously reported in our client alert, effective January 1, 2025, Los Cabos became the first Municipality in the State of Baja California Sur to increase the Real Estate Transfer Tax (Impuesto sobre adquisicion de Bienes inmuebles – ISABI) from 2% to 3%, pursuant to the decree published on December 27, 2024. This adjustment marked a significant shift in local real estate taxation and set the foundation for broader statewide reform.
Beginning of 2026: Statewide ISABI Harmonization Takes Effect
On December 24, 2025, Decree No. 3263 was published in the Official State Gazette, amending the Municipal Treasury Laws of Mulegé, Comondú, Loreto, and La Paz to align with the Los Cabos Municipal Treasury Law. As a result, the ISABI rate has been fully harmonized across all five municipalities of Baja California Sur at 3%. Effective January 1, 2026, individuals and legal entities acquiring real property (land and permanent constructions) in these municipalities are subject to ISABI at a rate of 3% of the property’s taxable value.
Reduced ISABI Rate for Donations and Family Successions
A preferential ISABI rate of 1.5% continues to apply to acquisitions by donation or succession between:
- Spouses; and
- Relatives in a direct ascending or descending line.
In these cases, ISABI is calculated on the appraised value of the property, after deducting an amount equivalent to five times the daily value of the UMA (Unidad de Medida y Actualización).
Environmental Sanitation Charge
In addition to ISABI, a separate environmental sanitation charge applies in three specific scenarios:
- Individuals who contract lodging and hotel services;
- Parties entering into motor vehicle rental agreements; and
- Parties to maritime vessel charter or rental agreements.
This charge is assessed on a per-day basis and is calculated at a rate ranging between 50% and 70% of the daily value of the UMA, depending on the type of service and the applicable municipal regulations.
Market Implications of the ISABI Increase and Environmental Charges
- Higher Transaction Costs (Immediate Impact). The statewide 3% ISABI rate increases closing costs, particularly for high-value residential, hospitality, and mixed-use assets.
- Shift in Deal Timing and Structuring. We anticipate increased demand for legal, tax, and structuring strategies aimed at optimizing transaction timing, ownership vehicles, and succession planning.
- Pressure on Hospitality and Rental Markets. The environmental sanitation charge adds incremental operating costs for:
- Hotels;
- Short-term rental platforms; and
- Branded residences with rental programs.
- More Selective Investment Demand. The combined effect of higher taxes and operating charges is likely to reduce speculative transactions, favoring long-term, fundamentals-driven capital.
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 17 locations throughout the United States and in Mexico, including Phoenix and Tucson, Arizona; Los Angeles, Orange County, Palo Alto and San Diego, California; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno-Tahoe, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
