Unconstitutionality of Mexico City’s property tax

By means of the session dated June 19^th, 2024 the Second Chamber of the Supreme Court of Justice (hereinafter the “Second Chamber”) declared the unconstitutionality of the article 130, portion I of the Mexico City’s Tax Code current in 2023, which establishes the rate for the property tax payment.

The Second Chamber considered that the property tax rate violates the proportionality principle in tax matters, since it generates a distortion in the determination of the property tax by applying diverse value ranges to the property on which the tax will be pay, determining minimum and maximum values. Therefore, the owners of lower value properties must pay a higher property tax than the owners of higher value properties.

The effect of the Amparo lawsuit granted by the Second Chamber is that the taxpayer only pays the fixed fee that corresponds to the range in which its property is located, and the amount obtained by applying the factor to the surplus over the lower limit is returned.

It should be noted that the final judgement was approved by unanimity of the ministers that integrate the Second Chamber, with which the formulated criteria is now obligatory jurisprudence for the courts of lower level located in the country.

In that sense, we estimate that it is possible to applicate the formulated criteria in diverse processes, to obtain the partial refund of the property tax payed in 2023 and 2024.

In virtue of the above, in BDO Legal we are at your entire disposal to address any matter related to this topic, so we invite you to contact us to provide you with our comments and timely advice on each particular case.

Mexico City, June 25, 2024.