Unconstitutionality of the real estate acquisition tax, applicable for 2024
On September 23, 2022, the Full Bench of the First Circuit of Mexico City issued a precedent declaring the unconstitutionality of the rate for calculating the Real Estate Acquisition Tax, as stipulated in Article 113 of the Fiscal Code of Mexico City.Now, this judgment specifically referred to the rate applicable in the years 2020 and 2021, but the violation was equally applicable for the fiscal years 2022 and 2023, as the reforms regarding the applicable rate in those years contained the same flaw. Consequently, the criteria of that precedent must be applicable. Therefore, during those fiscal years, our firm filed various legal protections against the mentioned tax, obtaining favorable judgments that resulted in refunds of the amounts paid for said contribution.
On December 26, 2023, a decree was published in the Official Gazette of Mexico City, amending and adding various provisions of the Fiscal Code of Mexico City, including the rates specified in Article 113 of that legal framework for calculating the Real Estate Acquisition Tax.
From the analysis conducted on those rates applicable for 2024, we confirm that the constitutional violation for which protection was granted persists. Consequently, any transaction resulting in the payment of this tax can be declared unconstitutional through legal protection, following the same criteria adopted by the Full Bench of the First Circuit of Mexico City. Therefore, any transaction through which real estate is acquired within the territory of Mexico City may be subject to such legal protection and benefit from it. The protection must be processed within 15 days following the payment date of the mentioned tax.
It is worth noting that such legal provisions could be modified at any time. Therefore, if the mentioned contribution is incurred during the fiscal year 2024, it should be subject to analysis at that time.
We are at your disposal for any questions that may arise.
ECIJA Mexico
socios.mexico@ecija.com
+52 55 5662 6840
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