On December 27th, 2024, a decree was published in the Official Gazette of Mexico City reforming, adding and repealing various provisions of the Fiscal Code of Mexico City which also added an article to the Austerity, Transparency in Remunerations, Benefits and Resource Management Law of Mexico City, and amended an article of the Organic Law of the Executive Power and Public Administration of Mexico City (the “Decree“).
In this regard, an obligation was added for individuals and legal entities who are owners of land or soil and buildings adhered thereto consisting on the filing of an informative return to the Ministry of Administration and Finance of Mexico City regarding the occupancy status of residential properties with a value exceeding $4’524,974.08. [1]
In this regard, on February 17th, 2025, the Ministry of Administration and Finance of Mexico City published in the Official Gazette the General Rules (the “General Rules“) for submitting the Informative Return as provided in the last paragraph of Article 132 of the Mexico City’s Tax Code.
These General rules set forth that owners or holders of residential properties must annually report the occupancy status of their properties, specifying whether the property is inhabited, meaning that at least one person physically resides in the property permanently during the last year; or the occupancy mode, i.e., the various ways a person may use a property, including any agreement that authorizes its use.
It should be noted that, according to the General Rules, an option will be available for taxpayers to declare their refusal to share information related to the occupancy status of residential properties.
The return must be filed annually, no later than June 30th of the corresponding fiscal year, through electronic means enabled by the Treasury of Mexico City.
Following the General Rules, the purpose of this return is to contribute to the updating of the cadastral and cartographic register of Mexico City, yet it does not imply an acknowledgement of ownership or possession.
On the other hand, while Article 466 of the Fiscal Code of Mexico City sets forth a fine ranging from $4,272.00 to $10,821.00 for those who fail to file the documents, the General Rules expressly state that no sanctions will apply to those who refuse to provide information.
The obligation to submit the informational return -which does exist- should not be confused with: a) the possibility of indicating a “refusal to share information regarding the status of residential properties in terms of their occupation”; nor with b) the non-binding nature of “submitting documents” that prove ownership.
Legal Implications and Potential Challenge
At first glance, presumably the Decree and the General Rules seem to aim at planning and cadastral updating. However, it must be noted that they pose certain risks to various human rights, particularly the right to privacy and confidentiality, to legal certainty, and to private property.
In addition, it can be observed that the tax authority is requesting information unrelated to the components of property tax. Rather, such powers fall under the purview of agencies responsible for urban development and territorial planning, the gathering of geographic and statistical data on thee population, housing planning and verifying land use.
Therefore, we consider that there are grounds to challenge the Decree and the General Rules through an “Amparo Indirecto” procedure, which must be filed within 30 days of the publication of the General Rules (i.e., no later than March 28th, 2025).
Our Tax Practice and Dispute Resolution Groups have extensive experience in handling constitutional cases in tax and administrative matters, and we are at your service if you need further clarification on the content of this newsletter.
[1] Approximately US$226,000.00 at an exchange rate of Mx$20.00 per US$1.00.
