April 29, 2026 in Mexico City — Mexico imposes a layered vehicle tax system: ISAN federal tax at purchase, annual tenencia state tax, environmental verification (holograma), and annual registration. For a MXN 500,000 family car, expect to pay MXN 30,000-50,000 in taxes and fees in year one, dropping to MXN 20,000-30,000 per year thereafter.
Mexico's Vehicle Tax System Overview
Mexico taxes vehicles at multiple levels:
- ISAN (federal): Paid once at purchase of new vehicles
- Tenencia (state): Annual state tax, some states have eliminated it
- Holograma (environmental): Based on emissions, affects driving access
- Verificación (emissions test): Annual/semi-annual emissions test
- Registration (alta): Annual or biennial renewal fee
ISAN: Federal Excise on New Vehicles
ISAN (Impuesto Sobre Automóviles Nuevos) is Mexico's federal excise tax on new passenger vehicle purchases. The rate varies by vehicle reference value tier:
| Vehicle Reference Value | Approximate ISAN Rate | ISAN on MXN Value |
|---|---|---|
| Up to MXN 400,000 | 2% | Up to MXN 8,000 |
| MXN 400,001-700,000 | 2.5% | MXN 10,000-17,500 |
| Above MXN 700,000 | 3% | MXN 21,000+ |
ISAN is calculated on the vehicle's reference value (valor referencial), not the final purchase price. This value is set at the time of first sale and adjusted annually for inflation. ISAN is paid once — at the first registration in Mexico.
Tenencia: Annual State Vehicle Tax
Tenencia is an annual state vehicle tax. Since 2013, it has been managed by states rather than the federal government. Rates and existence vary significantly:
| State | Tenencia Status | Notes |
|---|---|---|
| Nuevo León | Eliminated | No tenencia since 2014 |
| Jalisco | Eliminated | No tenencia |
| CDMX | Active | Based on vehicle value + holograma |
| State of Mexico | Active | Based on vehicle value |
| Querétaro | Eliminated | No tenencia |
| Aguascalientes | Eliminated | No tenencia |
In states that still charge tenencia, the amount depends on vehicle reference value. Typical rates range from MXN 448 to MXN 3,000+ per year for standard family cars. Some states offer exemptions for vehicles under certain value thresholds (e.g., under MXN 400,000 reference value).
The Holograma: Environmental Classification
Mexico's environmental hologram system classifies vehicles based on emissions and technology:
| Holograma | Vehicle Type | CDMX Driving Restriction |
|---|---|---|
| H00 | Electric + best PHEVs | Full access, all days |
| H0 | Euro 5/6, low-emission | Full access, all days |
| H1 | Euro 4+ petrol, Euro 5+ diesel | Partial restriction during alerts |
| H2 | Older high-emission | Banned on Hoy No Circula days |
| 2 | Pre-Euro, highest emission | Heavily restricted in CDMX |
In Mexico City, the Hoy No Circula (Today You Don't Drive) program restricts vehicles based on their holograma and license plate number. Vehicles with holograma 2 face the most severe restrictions and may be banned from the entire CDMX area during high-pollution alerts.
Verification (Verificación) Requirements
Annual emissions verification is required for most vehicles, with stricter requirements in the Valley of Mexico (CDMX and surrounding areas):
- CDMX: Verification every 6 months, cost approximately MXN 500-800 per test
- State of Mexico: Annual verification, approximately MXN 500-700
- Other states: Annual or biennial verification depending on local requirements
Verification must pass to renew your vehicle registration (alta). Failing verification means your vehicle is not legally registered and you cannot drive it.
Total Annual Cost Example
| Cost Item | Mexico City (CDMX) | Jalisco (Guadalajara) | Nuevo León (Monterrey) |
|---|---|---|---|
| Tenencia (annual) | MXN 1,000-3,000 | MXN 0 (eliminated) | MXN 0 (eliminated) |
| Verificación (2x/year) | MXN 1,000-1,600 | MXN 500-700 | MXN 500-700 |
| Insurance (annual) | MXN 15,000-25,000 | MXN 12,000-20,000 | MXN 12,000-20,000 |
| Registration (annual) | MXN 1,500-2,500 | MXN 1,000-1,500 | MXN 1,000-1,500 |
| Total annual | MXN 19,000-32,000 | MXN 13,500-22,200 | MXN 13,500-22,200 |
Annual vehicle ownership in Mexico City (including tenencia) costs approximately MXN 20,000-35,000 per year for a mid-range family car. In states that have eliminated tenencia, costs are approximately MXN 3,000-8,000 lower per year.
Business Tax Deductions
Vehicle costs are deductible for business purposes in Mexico:
- ISAN: Deductible as business expense for empresas
- Tenencia: Deductible for business vehicles
- Fuel and maintenance: Deductible with proper documentation
For employees receiving a company car, SAT allows tax-free personal use up to an annual limit (approximately MXN 150,000 value equivalent). Beyond this, the benefit is taxed as income.
Conclusion
Mexico's vehicle tax system involves ISAN at purchase (MXN 10,000-20,000 on new mid-range cars), annual tenencia in some states (MXN 448-3,000), bi-annual verification (MXN 500-1,600 per test), and annual registration (MXN 1,000-2,500). States like Nuevo León, Jalisco, and Querétaro have eliminated tenencia, making vehicle ownership significantly cheaper in those states. In Mexico City, the holograma system also restricts driving for older high-emission vehicles. Use our Mexico Car Tax Calculator for exact costs.
Disclaimer: Tax rates based on SAT and state revenue office data as of April 2026. Confirm current tenencia status and rates with your state revenue office, as several states change tenencia policy annually.
Official Resources: SAT Mexico | SEMARNAT Environmental | State Revenue Offices