The Supreme Court of Justice of the Nation (SCJN) declares the ISAI rate in effect in 2024 in Mexico City unconstitutional.

Executive Summary:

• On October 9, 2026, the jurisprudence P./J. 196/2026 (12a.) was published in the Judicial Weekly of the Federation, through which the Plenary of the Supreme Court of Justice of the Nation (“SCJN”) determined that the rate of the Tax on Acquisition of Real Estate (“ISAI”), provided for in article 113 of the Fiscal Code of the City of Mexico in force in 2024, violates the principle of tax proportionality established in article 31, section IV, of the Federal Constitution.
• The Supreme Court of Justice of the Nation (SCJN) identified that the ISAI tax rate in effect during the 2024 fiscal year could cause the tax to decrease when moving from one tax bracket to another, even if the property's value increased. Consequently, a higher-value property could generate less tax than the acquisition of a lower-value property.
• The case law will be binding on the courts from October 13, 2026. However, its publication does not eliminate the obligation to pay the ISAI nor does it, in itself, generate the right to obtain a refund of the amounts previously paid.
• Although the criterion refers specifically to the rate in force in 2024, its reasoning constitutes a relevant parameter for examining the constitutionality of other tax rates with similar calculation mechanisms, without implying its automatic application to different provisions.

Mechanics of the ISAI and grounds for its unconstitutionality

The ISAI is a local tax levied on the acquisition of real estate located in Mexico City, payable by individuals and legal entities carrying out such transactions. It is calculated on the highest value resulting from comparing the acquisition price, the cadastral value, and the appraised value, in accordance with the provisions of the local Tax Code.

During the 2024 fiscal year, Article 113 of the Mexico City Tax Code established a tax rate comprised of different ranges, determined according to the property's value. To calculate the tax, the corresponding range had to be identified, and the fixed fee was added to the amount calculated by applying a factor to the portion of the property exceeding the lower limit of that range.

Although this mechanism was intended to increase the contribution as the value of the property increased, the SCJN identified that the fixed fees and applicable factors did not maintain an adequate relationship between the different ranges, which generated unjustified reductions in the tax when moving from one to another.

To illustrate this distortion, the Supreme Court of Justice of the Nation (SCJN) pointed out that, according to the rate in effect in 2024, a property valued at $2,975,728.34 generated a tax of $147,861.83, while another property valued at $2,975,728.35, higher by just one cent, generated a tax of $128,817.18. Thus, an increase in the value of the property could cause a decrease of $19,044.65 in the tax, demonstrating a tax burden contrary to the constitutional principle of proportionality.

In this regard, the SCJN specified that the constitutionality of a progressive tariff does not depend solely on whether it includes increasing ranges, rates and factors, but on whether its effective application corresponds to the contributory capacity of the people obliged to pay.

Consequently, it determined that article 113, in force in 2024, violates the principle of tax proportionality by not guaranteeing that the amount of the contribution increases as the value of the property increases.

Scope and effects of jurisprudence

In the amparo appeals 296/2025, 297/2025, and 298/2025, the Supreme Court of Justice of the Nation (SCJN) determined that the constitutional defect identified in the tax rate did not affect the other essential elements of the ISAI (Tax on Acquisitions and Transfers of Real Estate), and therefore its unconstitutionality did not eliminate the obligation to pay said tax. Consequently, constitutional protection was granted to correct the distortions in its calculation and, where applicable, to refund the amounts paid in excess, in accordance with the effects established in the respective rulings.

The ruling also has implications for disputes related to previous fiscal years. Through General Agreement 9/2026-LAG, published in the Official Gazette of the Federation on September 18, 2026, the Supreme Court of Justice of the Nation (SCJN) lifted the suspension of pending appeals before the Collegiate Circuit Courts regarding the constitutionality of the ISAI rates for 2022, 2023, and 2024, and ordered them to be resolved in accordance with the reasoning established in the aforementioned precedents.

Regarding the 2025 and 2026 fiscal years, the SCJN's reasoning provides a relevant parameter for examining the ISAI rates applicable in those periods, particularly to determine whether the interaction between their ranges, fixed fees and calculation factors produces results consistent with the principle of tax proportionality, or whether there are distortions similar to those identified in the 2024 rate.

Furthermore, the significance of this jurisprudence is not limited to the ISAI (Tax on Real Estate Acquisitions), as it provides elements for examining the constitutionality of other taxes whose determination is carried out using ranges, fixed rates, and calculation factors. In particular, its reasoning allows for evaluating whether the combined application of these elements generates tax burdens consistent with the ability to pay and, where applicable, strengthens the arguments for challenging provisions that produce disproportionate results.

In this regard, their reasoning can strengthen the constitutional defense in disputes related to other taxes that include brackets, fixed rates, and calculation factors, when their application generates unjustified reductions between brackets or tax burdens that are contrary to the taxpayer's ability to pay. Thus, the criterion provides elements for identifying and challenging potential distortions in the determination of other taxes.