Dear clients & friends,

The Fiscal Code of Mexico City (“CFCDMX") regulates, among other taxes, the property tax. According to the provisions of this Code, taxpayers may be eligible for various reductions in the payment of the property tax if they meet certain requirements.

On November 5th of this year, an initiative was published in the Legislative Gazette of Mexico City proposing an amendment to Article 276 of the CFCDMX regarding reductions in property tax for the installation of photovoltaic systems (solar panels)..

This initiative proposes that individuals or legal entities who own real property and install solar panels on it will be eligible for a 50% reduction in property tax during the first three (3) years following the installation. Additionally, a 20% further reduction will be granted for an additional three (3) years if the taxpayer continues to use solar panels on the property.

Property tax represents a significant portion of the annual expenses for property owners, and therefore, a reduction in this regard would represent considerable savings for taxpayers. The purpose of this reduction is to harness the potential of Mexico City to benefit from solar energy and mitigate global warming through the implementation of fiscal incentives.

Although this initiative has not yet come into effect, we believe it is important for property owners in Mexico City to be informed about this significant incentive, which may be enacted in the coming days. Should you be interested in obtaining this reduction, K&G can perform a legal analysis of the requirements and procedures before the relevant administrative authorities to ensure that, as a taxpayer, you qualify for the reduction related to photovoltaic systems.

Should you have any questions or require advice on this matter, our team of experts is available at the following email:

Paul Kavanagh: paul@k-g.com.mx

Luis Kanchi: Lkanchi@k-g.com.mx

Miguel Alonso: malonso@k-g.com.mx