It is easy to assume the acquisition tax on a Los Cabos purchase is a percentage of the purchase price. It is a reasonable assumption and it is not what the law says.
The municipal revenue law sets the tax base at Article 37 as the highest of three different figures, and the price you agreed is only one of them. The other two are the cadastral value the municipality holds, and a formal appraisal carried out by a qualified expert working from the list the notario or the bank draws on.
If either of those comes in above your price, your tax is calculated on the higher number.
This page explains what the appraisal is, who carries one out, who pays for it, how long it lasts, and what happens if it comes in above the price you agreed.
The three candidates, and the highest wins
The municipal revenue law sets the base for the acquisition tax as the highest of three figures: the price stated in the contract, the cadastral or fiscal value, and the expert commercial appraisal.
In plain terms, the highest of:
- the price stated in the contract, what you and the seller agreed
- the official value, also called the cadastral or fiscal value, the figure the municipality holds on record
- the avalúo comercial pericial, a formal commercial appraisal by an expert holding municipal authorization
Where a property changes hands at or near market value, the contract price is usually the highest of the three and the rule makes no difference. It bites in the cases where it is not: a purchase below market, a property whose cadastral value has recently been revised upward, or an appraisal that reads the property more generously than the negotiation did.
What an avalúo is, and who may carry one out
An avalúo is not a market appraisal in the sense a US buyer means. It is a formal valuation, prepared to a set methodology, for an official purpose.
Two separate things decide who does it. The law sets the qualification: the appraisal has to come from an expert authorized by the municipality, under its own regulation for valuers. Practice decides the appointment: the buyer pays, and banks and notaries work from their own lists, so the choice is made from one of those rather than by you.
What follows is practical. Ask your notario who will be appointed and when, before the appraisal is commissioned rather than after. An appraisal from someone outside the relevant list may be a perfectly good opinion of value and still not do the job the transaction requires.
The validity clock
An appraisal is valid for a limited period, roughly three months.
Roughly three months sounds generous until you set it against a Mexican closing timeline, particularly one involving a trust permit for a foreign buyer, which adds its own waiting period.
The practical consequence is straightforward and it costs real money when it goes wrong. An appraisal obtained early in the process, to inform a negotiation or to satisfy a lender, can expire before the deed is signed. If it does, it has to be redone, and paid for again.
Sequence it deliberately. Ask your notario when in the process the appraisal should be commissioned so that it is still valid at signing.
This reflects our latest information and can change. An appraisal’s validity period is set by the municipality and is the kind of thing that moves. Ask us which of the three values is likely to be the base on a property you are considering. We can help you obtain the cadastral figure and put the timing question to the notaries we work with, so you know before you offer rather than at closing.
How the three values actually interact
This is the part the market tends to skip, and it is worth understanding properly because it is the whole mechanic.
The three are not averaged and they are not negotiated between. The law takes whichever is highest and uses that. So the question is never “what is my property worth”, it is “which of these three is the biggest number, and do I know it yet”.
The contract price is the one you control. On a purchase at market value it is usually the highest of the three, and when that is the case nothing surprising happens.
The cadastral or fiscal value is the municipality’s own figure. It is generally well below market, which is why it is usually not the one that decides the base. But it is revised periodically, and a property whose cadastral value was recently reassessed can carry a figure much closer to market than its neighbors do. So this is the figure worth asking about early. It is the one that can have moved since anybody last looked.
The appraisal is commissioned as part of the process and is a professional opinion of value on the day. It can land above the contract price for ordinary reasons: a rising market between agreement and closing, a property improved since it was listed, or simply a cautious valuer.
So there are two ways your tax base ends up above your purchase price, and neither involves anything going wrong. The cadastral figure can already be higher, or the appraisal can come in higher.
What follows practically. Ask for the cadastral value early, before you commission anything, because it is a matter of record and it tells you whether the appraisal is even the variable that matters. If the cadastral figure is already above your price, the appraisal result will not change your base. If it is well below, the appraisal is the number to watch.
What happens if the appraisal comes in above your price
This is the question people actually have, and the answer follows from the three candidates above rather than from anything complicated.
If the appraisal is the highest of the three, it becomes the base the acquisition tax is calculated on. Not the price you agreed. So an appraisal above your purchase price raises the tax, and it does so without anything having gone wrong.
That is worth knowing before you commission it rather than after, for two reasons.
It changes your closing budget, not your purchase price. The price you agreed is the price you pay the seller. What moves is the tax line in your closing costs, and it moves by a percentage of the gap rather than by the gap itself.
It is a reason to get the cadastral value early. If the cadastral figure is already above your price, you know the appraisal is not the variable that decides your tax base. Our guide to buyer closing costs goes into the other components of a closing budget.
Can you challenge an appraisal? That is a matter for the notario and the municipality, and we hold no verified position on how it works in practice. Ask your notario what the route is before you need it.
What to ask, and when
Four questions, in roughly this order.
Before you agree a price: ask what cadastral value the municipality currently holds for the property. The seller’s predial receipt will indicate it, and it tells you whether the contract price is likely to be the highest of the three.
Before commissioning an appraisal: ask your notario who will be appointed. Banks and notaries work from their own lists, so this is rarely your choice to make, but it is always yours to know.
When planning the timeline: ask the notario when the appraisal should be commissioned so that it is still valid at signing, given the other approvals your purchase needs.
Before signing anything: ask for the acquisition tax to be quoted on the base actually being used, and which of the three values that base is.
Our Buyer’s Guide shows where the appraisal sits in the purchase. If you are selling, our guide to home value covers the market side.
What this page cannot tell you, as of October 2026
We are not able to tell you what an avalúo costs in Los Cabos today, because we have no verified figure and it varies in some transactions.
We are also not able to point you to a public lookup for the register of authorized appraisers. The law establishes that the register exists and that registration is an annual municipal requirement. Whether it is published in a form a buyer can search is a question for the municipality or your notario.
Both are worth asking your notario, who deals with this on every transaction.
Frequently Asked Questions
What is an avalúo?
A formal commercial appraisal prepared by an expert holding municipal authorization, appointed in practice from the list the notario or bank uses, and used among other things as one of the candidate values for the acquisition tax base.
Is my acquisition tax based on what I paid?
Not necessarily. The municipal revenue law sets the base as the highest of the contract price, the cadastral or fiscal value, and the expert commercial appraisal. If one of the other two is higher than your price, that becomes the base.
Who can carry out an appraisal?
The law requires an expert authorized by the municipality. In practice banks and notaries appoint from their own lists, so ask your notario who will be appointed and when. The buyer pays for it.
How long is an appraisal valid?
A limited period, roughly three months. Against a Mexican closing timeline, particularly one involving a trust permit, that is tighter than it sounds, and an expired appraisal has to be redone and paid for again. Ask your notario when it should be commissioned.
What happens if the appraisal comes in above the agreed price?
The higher figure becomes the base the acquisition tax is calculated on, because the law takes the highest of the three values. Your purchase price does not change. Your closing costs do.
Do I need an appraisal if I am paying cash?
Yes. The appraisal is part of how the acquisition tax base is established, and that does not depend on how you are funding the purchase.
Can I challenge an appraisal?
That is a matter for the notario and the municipality, and we hold no verified position on how it works in practice. Ask your notario what the route is, ideally before you need it.
Who pays for the appraisal?
The buyer pays. Banks and notaries work from their own lists of appraisers, so ask your notario who will be appointed and when it should be commissioned.
The short version. Your tax base is whichever of the three values is highest, and you can know two of them before you ever commission an appraisal. Ask us to help you establish which one is likely to decide it on a property you are considering, and we will put the timing question to the notaries we work with.