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Real Estate Tax on Undeveloped Properties 

by Luis Ortiz Hidalgo Gerardo Nieto Martinez Gil Zenteno Garcia Alejandro Barrera Fernandez

Published: February, 2012 - Mexico

Submission: February, 2012


Article 41 of the Queretaro Treasury Law for Municipalities regulates the procedure to calculate the real estate tax and providesan annual rate based on the following criteria: Under such Article, the municipalities will determine which of the two rates may apply each year, incorporating the relevant rateto their respective Revenue Law. As it may be noted, owners or possessors of undeveloped properties are obligated to pay the tax at a rate of 8 per thousand, placing them in an unequal position with respect to the owners of developed urban properties, who apply a 1.6 rate per thousand. In our view, this Article is unconstitutional as it violates the equity and proportionality principles in tax matters, since owners or possessor of both developed and undeveloped properties are classified under the same category as real estate taxpayers and, therefore, they should be treated equally under the law.

Therefore, it would be possible to challenge this inequality by filing an amparo action with a federal court of law, within 15 business days following the first payment of such tax rate. A favorable ruling will release the taxpayer from the obligation to pay the tax during the 2012 fiscal year or, if applicable, pay it by applying the 1.6 rate per thousand and obtain, in whole or in part, the refund of the tax paid for the first time, at the rate being challenged. The lawyers of the tax area of our firm would be very pleased to provide you any further information on the above.
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