RESICO for Landlords: How to Pay Taxes on Your Rental Income

If you rent out a house, apartment or commercial space, RESICO for rental income is one of the most convenient tax options the SAT (Mexico's tax authority) offers to individuals with rental income. This regime simplifies the tax calculation, reduces the administrative burden and applies lower rates than the general regime, as long as your annual rental income does not exceed the established limit. In this article we review who can enroll, how the monthly tax is calculated, what obligations come with it, and when it makes more sense than the traditional rental regime with deductions.

What RESICO is and who can enroll

The Régimen Simplificado de Confianza was created to make it easier for individuals with certain activities, including renting out real estate, to pay their taxes. Property owners can enroll if their total income for the year, adding up all their sources under this regime, does not exceed the annual cap set in the income tax law (ISR). If you go over that limit at any point during the tax year, you must move to the general rental regime, where you can deduct expenses such as maintenance, property tax (predial) or mortgage interest. RESICO does not allow deductions, so it is worth comparing both schemes before deciding. It is especially attractive if you rent a single property with low operating costs, since the simplicity of the process makes up for the lack of deductions. Enrollment or a change of regime is done directly on the SAT portal or by visiting an office with an appointment, and it is a good idea to review your Constancia de Situación Fiscal (tax status certificate) before registering to confirm that your profile meets the current requirements.

How the monthly tax is calculated

Unlike the general regime, under RESICO the tax is calculated by applying a direct rate to the income collected during the month, without subtracting expenses. The rate is progressive: the higher the monthly income, the higher the applicable percentage, but in every case it is usually considerably lower than the marginal rate under the general regime. Payment is made monthly and is final, which means there is no later adjustment for that income in the annual return, although you must still report the accumulated income. To determine the amount to pay, you need to identify the total actually collected in the period, including deposits, transfers or cash received for rent.

• The rate is applied to gross income, without subtracting expenses or deductions
• The monthly payment is normally considered final for that income
• You must issue an electronic invoice (factura electrónica) for every rent payment you receive
• If you rent several properties, all income is added together to determine the applicable rate
• Exceeding the annual income limit requires you to change regimes starting the following month

Obligations and comparison with the general regime

In addition to the monthly payment, taxpayers under RESICO must keep their tax information up to date, retain their tenants' payment receipts and file the annual return, which reports total income for the year. You are also required to issue a stamped electronic invoice for every rent collection, whether the payer is an individual or a company. The main difference from the general rental regime is that the latter lets you deduct actual expenses or apply a blind deduction (deducción ciega) equal to a fixed percentage of income, which can be more advantageous if you have high maintenance costs, property management fees or an outstanding mortgage on the rented property.

Frequently asked questions

Can I switch from RESICO to the general regime at any time?

Yes, you can request a change of regime with the SAT, but it generally takes effect starting the month after your request, not retroactively. Weigh the decision carefully, taking your actual deductible expenses into account.

Do I need to keep accounting records if I'm in RESICO?

Formal bookkeeping is not required as it is under the general regime, but you must keep proof of income, lease agreements and the stamped invoices you issue to your tenants each month.

What happens if I rent out a property together with someone else?

Each co-owner must pay taxes individually on their proportional share of the income, and each one decides independently whether to stay in RESICO or move to the general regime based on their own situation.