Destinations · Mexico
Mexico
Half the cost of Sydney, a real treaty, easy visas, and worldwide tax from day one.
Tax regime
Australia treaty
Flight from Sydney
Timezone
How Mexico taxes youindicative
Mexico taxes residents on worldwide income at progressive rates to 35%, from the first day you count as resident, not after a grace period. The headline sweeteners are on the investment side: gains on shares sold through a recognised stock exchange are taxed at a flat 10%, and Mexican dividends carry a 10% withholding on top of corporate tax. There is a full tax treaty with Australia, which caps withholding on the Australian income you keep and gives you a tie-breaker if both countries claim you. The everyday reality is SAT (the Mexican tax authority) whose registration, e-invoicing (CFDI) and filing machinery runs in Spanish and assumes you have an accountant.
- Salary
- Progressive 1.92% to 35% (top rate from roughly MXN 4.5m ≈ A$390k). Employees are withheld at source; everyone else deals with SAT directly.
- Capital gains
- Flat 10% on gains from shares sold through a recognised stock exchange. Off-exchange sales (private companies, real estate) are taxed at progressive rates with cost-base indexation for inflation.
- Dividends & interest
- Mexican dividends: 10% withholding on the net dividend, on top of 30% corporate tax already paid. Foreign dividends and interest are taxed at your progressive marginal rate, Australian franking credits mean nothing to SAT.
- Crypto
- No dedicated crypto regime: SAT treats disposals as ordinary income or alienation-of-goods gains at progressive rates up to 35%, the 10% exchange rate does not apply to crypto. Guidance is thin; get Mexican advice before realising anything large.
- Social security
- IMSS social security applies to Mexican employment (employer-heavy contributions); self-employed expats generally sit outside it and buy private cover instead.
Australia has a tax treaty with Mexico
A treaty gives you two things that matter. First, a tie-breaker: if both countries claim you as a resident, the treaty cascade (permanent home → vital interests → habitual abode → nationality) decides who wins. You can’t simply be fully taxed twice on the same income. Second, reduced withholding on Australian-source income you keep: unfranked dividends at 15% and interest at 10% instead of the default non-treaty rates.
Walk your own facts through the cascade with the Treaty Tie-Breaker tool.
Visa pathways
Every pathway carries a tax-residency consequence, the row most visa guides leave out. A visa gets you in; it doesn’t decide who taxes you.
Temporary resident visa (economic solvency)
nomadindicativeOne to four years of residence by showing income of roughly A$4,500+/month over the last six months, or savings around A$75k+ over twelve. Applied for at a consulate before you fly.
- Income $54,000+ / year
- Assets $75,000+
- Family can come
Timeline: ~2 months from application to arrival
Tax residency: Meeting its conditions makes you tax resident there, usually what you want, because a genuine new tax home is your strongest fact against Australia.
Thresholds are set in multiples of the Mexican minimum wage/UMA and drift every year, and consulates apply them inconsistently, so check the specific consulate. Making Mexico your home makes you tax resident under the home / centre-of-vital-interests test; the visa itself is neither necessary nor sufficient.
Permanent resident visa (higher solvency)
goldenindicativeIndefinite residence for retirees and the well-resourced: roughly A$7,500+/month income or ~A$300k in savings/investments, with no renewals ever again.
- Income $90,000+ / year
- Assets $300,000+
- Family can come
Timeline: ~3 months from application to arrival
Tax residency: Meeting its conditions makes you tax resident there, usually what you want, because a genuine new tax home is your strongest fact against Australia.
Usually granted on retirement-style passive income; some consulates only issue it to applicants of pension age. Also reachable after four years as a temporary resident. Permanent residence is a strong "I actually left" fact for the ATO, and a strong "you live here" fact for SAT.
Work visa (employer sponsored)
workindicativeA Mexican employer with an INM registration obtains a work permit; you convert it at a consulate. The standard route for a local job offer.
- Employer sponsor required
- Family can come
Timeline: ~3 months from application to arrival
Tax residency: Meeting its conditions makes you tax resident there, usually what you want, because a genuine new tax home is your strongest fact against Australia.
Employer-driven and paperwork-heavy, but reliable. Salary is IMSS-covered and withheld at source, which simplifies your SAT life considerably compared with self-employment.
Family unit visa
familyindicativeResidence through a Mexican spouse, partner or child, one of the more straightforward family routes in the region.
- Family can come
Timeline: ~3 months from application to arrival
Tax residency: Meeting its conditions makes you tax resident there, usually what you want, because a genuine new tax home is your strongest fact against Australia.
Marriage to a Mexican citizen opens a two-year track to permanent residence. Family ties in Mexico also weigh heavily in the treaty tie-breaker, usually in your favour if the ATO argues.
What Mexico City costsindicative
Typical expat defaults in AUD, the same figures the Break-Even Calculator pre-fills for Mexico. Treat them as comparison-grade, not budget-grade.
| Rent, family home in Mexico City (per month) | est. $3,800indicative |
| Rent, 1, 2br couple/single (per month) | est. $2,200indicative |
| International school (per child, per year) | est. $20,000indicative |
| Private health, family (per year) | est. $6,000indicative |
| Private health, single (per year) | est. $2,200indicative |
| One-off relocation (movers, flights, deposits) | est. $18,000indicative |
| Return flight home (per person) | est. $2,500indicative |
| Day-to-day cost index vs Sydney (ex-rent) | 55%indicative |
Honest downsides
- Security is genuinely region-dependent: Mexico City neighbourhoods, Mérida and Querétaro feel safer than their reputation; other states are on the DFAT do-not-travel list. Where you live matters more than the country average.
- Bureaucracy runs in Spanish, SAT registration, CFE electricity accounts, banking, INM renewals. Without workable Spanish or a good gestor/accountant, routine admin becomes a part-time job.
- It is about as far from Australia as you can get: ~16 hours flying, a 15, 17 hour time-zone gap that inverts your working day against AEST, and A$2,500 flights making "quick trips home" neither quick nor cheap.
- The cost of living is roughly half of Sydney, but so are local salaries; this is a destination for imported income, not for building a local career.
What most people miss about Mexico
- Worldwide taxation starts on day one of Mexican residency. There is no NZ-style transitional exemption or Portuguese-style special regime. Your Australian dividends, interest and gains are SAT’s business immediately.
- You must register with SAT (RFC number) once resident, many expats simply never do, which works until it very much doesn’t: banks, notaries and property sales increasingly demand an RFC, and back-filing in Spanish is painful.
- The treaty caps withholding and breaks ties, but it does not move your Australian rent: rental income from Australian property stays taxed in Australia at non-resident rates from the first dollar, with Mexico crediting rather than exempting.
- The flat 10% only covers exchange-traded sales, selling your Australian private company or off-market parcels as a Mexican resident lands at progressive rates up to 35%, before the treaty credit maths starts.
Run your numbers for Mexico
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