Monterrey Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Monterrey

Monterrey, the capital of Nuevo Leon state, is a major business and industrial hub in northeastern Mexico. As the country's third largest city, Monterrey attracts many business travelers and tourists who seek out short-term rental accommodations through platforms like Airbnb and VRBO. However, before launching a short-term rental business in Monterrey, it's important to understand the relevant federal, state, and local regulations.

At the federal level, Mexico requires all short-term rental hosts to register with the Mexican Tax Administration Service (SAT) and obtain a tax ID number known as an RFC. Hosts must report their rental income and pay the applicable taxes, which include the Value Added Tax (VAT) of 16% and the Income Tax (ISR), which ranges from 0-35% depending on the host's total income.

In 2022, Airbnb reached an agreement with the Mexican government to automatically collect and remit the 16% VAT on behalf of hosts in Mexico. However, hosts are still responsible for reporting and paying their income taxes directly to the SAT. Failure to properly register and pay taxes can result in fines and penalties.

At the state level, Nuevo Leon has no specific laws regulating short-term rentals. However, there have been discussions in the state congress about potentially implementing a state-wide permitting system and occupancy tax for vacation rentals to level the playing field with hotels. As of 2023, no such state regulations have been enacted yet.

Locally, the Monterrey city government passed an ordinance in February 2022 requiring short-term rental platforms like Airbnb to collect and remit a 3% lodging tax on behalf of hosts. This tax applies to all short-term rentals of less than 30 days. Platforms must register with the city, provide data on rental activity, and file monthly tax reports.

The Monterrey ordinance defines short-term rentals as the rental of up to two private rooms within a host's primary residence, or the rental of an entire home or apartment for less than 30 days at a time. Hosts are required to obtain a permit from the city and post their permit number on all listings. Permits are valid for one year and must be renewed annually.

To obtain a short-term rental permit in Monterrey, hosts must submit an application, proof of property ownership or a rental agreement, a copy of their official ID, and documentation of their RFC tax registration. Hosts must also certify that their rental meets all safety and habitability requirements, such as having smoke detectors, fire extinguishers, and posted emergency contact information.

Short-term rentals are allowed in most residential zones in Monterrey, with the exception of social housing developments and gated communities that prohibit the activity in their HOA rules. In mixed-use and commercial zones, short-term rentals are generally permitted but may be subject to additional restrictions or permitting requirements.

Enforcement of the Monterrey short-term rental ordinance is largely complaint-based. The city has set up a hotline and online portal where residents can report suspected illegal rentals or nuisance properties. Fines for non-compliance can range from 500 to 1500 times the daily value of the Measurement and Updating Unit (UMA), which is set by the Mexican central bank and fluctuates over time.

While Monterrey has taken steps to regulate and tax short-term rentals at the city level, the rules are not as extensive as in some other major Mexican destinations like Mexico City and Quintana Roo. With no state-level regulations currently in place, the permitting and tax requirements for vacation rentals in the Monterrey metropolitan area can vary significantly from one municipality to another.

Hosts and investors interested in starting a short-term rental business in the Monterrey region should carefully research the specific rules in their local jurisdiction, register with the appropriate tax authorities, and obtain any required city permits before listing their property online. Working with a local attorney or property manager experienced in navigating the evolving regulatory landscape can help short-term rental operators stay compliant and successful in this growing market.

Short-Term Rental Licensing Requirement in Monterrey

Property owners must obtain the necessary permits and approvals from the city government to operate a short-term rental in Monterrey, Nuevo Leon. Monterrey has specific regulations for short-term rentals, which are defined as the rental of a private room or entire home for less than 30 days at a time.

Monterrey's primary permit required for short-term rentals is the Municipal Operation License for Short-Term Accommodation (Licencia de Funcionamiento Municipal para Alojamiento Temporal). To be eligible for this license, the property must be located in a zone that allows for short-term rental activity, as determined by the city's land use plan.

The short-term rental license application process involves submitting detailed documentation to the Monterrey Municipal Development Secretariat (Secretaría de Desarrollo Urbano y Ecología de Monterrey), including:

• Completed application form
• Proof of property ownership or a valid rental agreement
• Official identification of the property owner or host
• Floorplan of the property indicating the areas to be used for short-term rental
• Proof of registration with the Mexican Tax Administration Service (SAT) and a valid tax ID number (RFC)
• Payment of the applicable license fee

Once issued, the Municipal Operation License for Short-Term Accommodation is valid for one year and must be renewed annually. The license number must be prominently displayed on all online listings and advertisements for the short-term rental property.

In addition to the municipal license, short-term rental hosts in Monterrey must also register with the Nuevo Leon State Tourism Secretariat (Secretaría de Turismo de Nuevo León) and obtain a state-level tourism registration number. This process involves providing documentation similar to that of the municipal license application.

Failure to obtain and maintain the necessary licenses and registrations can result in fines and penalties from both the city and state authorities. The Monterrey government has the power to suspend or revoke the operating licenses of non-compliant short-term rentals.

It's important to note that in addition to the specific short-term rental regulations, properties must also comply with all relevant building, safety, and health codes. This may include requirements for smoke detectors, fire extinguishers, emergency signage, and accessibility features.

Hosts should carefully review all the requirements and ensure their property is in full compliance before listing it for short-term rental site. Working with a local property manager or attorney familiar with the evolving regulations can help navigate the licensing process and avoid potential pitfalls.

As the short-term rental market continues to grow in Monterrey, the city and state governments will likely continue to refine and update their policies. Staying informed about any regulatory changes is crucial for hosts to maintain compliance and protect their business.

Required Documents for Monterrey Short-Term Rentals

Property owners must submit a comprehensive application package to the Municipal Planning and Urban Development Secretariat (Secretaría de Desarrollo Urbano y Ecología) to apply for a short-term rental permit in Monterrey, Nuevo Leon. The application requires several key documents to demonstrate compliance with city regulations and ensure the property meets all necessary standards.

One of the most important documents is proof of property ownership or a valid rental agreement if the applicant is a tenant. This document establishes the applicant's legal right to use the property for short-term rental purposes. If the property is owned by a company or trust, additional documentation may be required to verify the applicant's authority to act on behalf of the entity.

Applicants must also provide a copy of their official identification, such as a passport or voter ID card. For properties owned by a company, the legal representative must provide their identification along with proof of their authority to represent the business.

A detailed site plan and floor plan of the property is another essential component of the application. The site plan should show the location of all buildings, parking areas, and outdoor spaces. The floor plan must clearly label all bedrooms, bathrooms, and common areas to be used by guests. These plans help city officials verify that the property meets occupancy limits, parking requirements, and safety standards.

To ensure compliance with tax regulations, applicants must submit proof of their registration with the Mexican Tax Administration Service (SAT) and their tax ID number (RFC). Short-term rental operators are required to pay both value-added tax (VAT) and income tax on their rental revenue, so proper tax registration is critical.

The application also requires a signed affidavit from the property owner or authorized representative certifying that the information provided is true and accurate. This affidavit holds the applicant legally responsible for any false or misleading statements in the application.

If the property is located within a gated community or condominium complex, the applicant may need to provide additional documentation from the homeowners association (HOA) or building management. This could include a letter confirming that short-term rentals are permitted under the community's rules and any specific guidelines or restrictions that apply.

Finally, all short-term rental permit applications must include payment of the required fees. As of 2023, the application fee in Monterrey is 500 pesos, with an additional 1,000 peso fee for the first year's permit upon approval. Payment can be made via bank transfer or at the municipal treasury office.

In summary, the key documents required for a Monterrey short-term rental permit application are:

1. Proof of property ownership or rental agreement
2. Official identification of the applicant or legal representative
3. Site plan and floor plan of the property
4. Proof of SAT tax registration and RFC number
5. Signed affidavit certifying the accuracy of the application
6. HOA or building management approval (if applicable)
7. Payment of application and permit fees

Property owners can navigate Monterrey's short-term rental permitting process by carefully compiling all necessary documentation and submitting a complete application package. However, with the evolving regulatory landscape, consulting with local experts is important to ensure ongoing compliance and avoid potential penalties.

Monterrey Short-Term Rental Taxes

Like the rest of Mexico, short-term rentals in Monterrey are subject to several federal, state, and local taxes. It's important for property owners to understand and comply with these tax obligations to avoid penalties and ensure the success of their rental business.

At the federal level, all short-term rental income in Mexico is subject to the Value Added Tax (VAT) of 16% and the Income Tax (ISR), which ranges from 0-35% depending on the host's total income. Hosts must register with the Mexican Tax Administration Service (SAT) and obtain a tax ID number (RFC) to report and pay these taxes.

In 2022, Airbnb reached an agreement with the Mexican government to automatically collect and remit the 16% VAT on behalf of hosts. However, hosts are still responsible for reporting and paying their income taxes directly to the SAT.

At the state level, Nuevo Leon does not currently impose any additional taxes specific to short-term rentals. However, there have been discussions in the state congress about potentially implementing a state-wide lodging tax for vacation rentals, similar to the tax paid by hotels. As of 2023, no such tax has been enacted yet.

Locally, the Monterrey city government passed an ordinance in February 2022 requiring short-term rental platforms like Airbnb to collect and remit a 3% lodging tax on behalf of hosts. This tax applies to all short-term rentals of less than 30 days and is paid to the city's treasury department.

So, in total, short-term rentals in Monterrey are subject to the following taxes:

1. 16% federal Value Added Tax (VAT) - collected by Airbnb
2. 0-35% federal Income Tax (ISR) - paid directly by hosts to SAT
3. 3% Monterrey city lodging tax - collected by rental platforms

It's crucial for hosts to keep accurate records of all rental income and expenses, as well as proof of tax payments. The Mexican tax authorities have the power to audit short-term rental operators and impose fines for non-compliance.

Hosts should also be aware that in addition to income taxes, they may be subject to higher property tax rates for short-term rentals compared to regular residential properties. In Monterrey, the property tax rate for non-owner occupied properties can be up to double the rate for primary residences.

To navigate the complex tax landscape, many short-term rental owners in Monterrey choose to work with a local accountant or property manager who specializes in vacation rentals. These professionals can help ensure compliance with all tax requirements and optimize deductions to minimize the overall tax burden.

As the short-term rental market continues to grow and evolve in Monterrey and across Mexico, it's likely that tax regulations will also adapt. Hosts should stay informed about any changes to tax laws at the federal, state, or local levels that could impact their business. Joining local host associations or online forums can be a good way to stay up-to-date on regulatory developments and connect with other rental operators navigating the same challenges.

Nuevo Leon Wide Short-Term Rental Rules

While the city of Monterrey has specific regulations for short-term rentals, the state of Nuevo Leon as a whole has not yet implemented a comprehensive legal framework for vacation rentals. However, some state-level rules and initiatives impact short-term rental operators throughout Nuevo Leon.

One important aspect is the state's tourism law, which requires all individuals and companies offering tourism services, including short-term rentals, to register with the Nuevo Leon Ministry of Tourism (Secretaría de Turismo de Nuevo León). This registration process involves providing basic information about the property, the host, and the services offered.

Registered short-term rentals are then listed in the state's official tourism directory and may be eligible for certain promotional opportunities or support from the tourism ministry. However, registration does not currently involve any additional taxes or fees at the state level.

In recent years, there have been several attempts in the Nuevo Leon state congress to pass more comprehensive regulations for short-term rentals. In 2019, a bill was introduced that would have required all vacation rentals to obtain a state-level operating permit, pay a lodging tax similar to hotels, and comply with certain safety and quality standards.

The proposed law also sought to limit short-term rentals to certain zones and establish a statewide registry of all vacation rental properties. However, after opposition from some host groups and concerns about the potential impact on tourism, the bill did not advance.

In 2021, another proposal was put forward to create a voluntary certification program for short-term rentals in Nuevo Leon. Under this scheme, hosts could apply for a state seal of approval by meeting certain safety, cleanliness, and guest satisfaction criteria. The idea was to promote high-quality vacation rentals and provide a competitive advantage for certified properties.

While this certification program has not yet been implemented, it reflects an ongoing interest from state policymakers in promoting and regulating the growing short-term rental market. As more cities in Nuevo Leon grapple with the impacts of vacation rentals on housing affordability and neighborhood character, there may be renewed pressure for state-level solutions.

In the absence of comprehensive state regulations, the legal landscape for short-term rentals in Nuevo Leon remains somewhat fragmented. While Monterrey has taken the lead in establishing permit requirements and taxes, other cities in the metropolitan area like San Pedro Garza García and Guadalupe have their own zoning rules and restrictions.

For example, San Pedro Garza García, an affluent suburb of Monterrey, has banned all short-term rentals in residential zones, only allowing them in certain commercial areas. On the other hand, Guadalupe has no specific short-term rental regulations, leaving hosts to navigate the general business licensing and tax requirements.

This patchwork of local rules can create confusion and compliance challenges for hosts operating in multiple cities across the state. As the short-term rental market continues to evolve, there may be growing calls for a more unified and consistent regulatory approach at the state level in Nuevo Leon.

In the meantime, hosts should carefully research and comply with all applicable rules in their specific municipality while staying informed about any potential changes to state-level policies. Joining local host associations, participating in public forums, and engaging with elected officials can help short-term rental operators have a voice in shaping the future of the industry in Nuevo Leon.

Does Monterrey Strictly Enforce STR Rules?

Based on discussions from Airbnb hosts on Reddit and BiggerPockets forums, it appears that Monterrey and the surrounding Nuevo Leon state have a relatively relaxed approach to enforcing short-term rental regulations compared to some other major cities in Mexico. While Monterrey passed a city ordinance 2022 requiring permits and imposing a 3% lodging tax, the general consensus is that enforcement has been sporadic and inconsistent so far.

Several hosts mention that the permit application process in Monterrey is not as stringent or time-consuming as in places like Mexico City, where the requirements are much more extensive. Some have been able to operate without permits for extended periods without facing any penalties or shutdowns from the city.

Compared to beach destinations like Cancun and Playa del Carmen, which have cracked down more aggressively on unlicensed rentals in recent years, Monterrey is seen as being more hands-off and Airbnb-friendly. The city seems to recognize the economic benefits of short-term rentals and is not actively seeking to discourage the practice.

That said, there are still reports of occasional fines and warnings from city inspectors for hosts operating without permits or not collecting the required taxes. However, the overall sentiment is that Monterrey is not nearly as strict as some other Mexican cities when it comes to STR enforcement.

On BiggerPockets, some investors advise that while it's always best to fully comply with local regulations, the chances of facing serious consequences for minor violations in Monterrey are relatively low. The city's complaint-based enforcement system means that hosts who maintain positive relationships with neighbors and avoid generating excess noise or trash issues can often fly under the radar.

However, most experienced hosts still recommend obtaining proper permits and insurance to mitigate risk and liability, even if active enforcement is limited. With the Monterrey city government collecting tax revenue from Airbnb directly, there is always the potential for increased scrutiny of individual hosts to ensure compliance.

In summary, while Monterrey has short-term rental regulations on the books, the city is generally seen as more welcoming and lenient towards Airbnb than other major Mexican markets. Enforcement efforts have been inconsistent, and many hosts can operate without major interference as long as they respect neighbors and do not generate complaints. However, the smartest approach is still to follow all local permitting and tax requirements to avoid potential issues down the line as the STR market continues to evolve.

How to Start a Short-Term Rental Business in Monterrey

Starting a short-term rental business in Monterrey can be a lucrative venture, but it's important to follow the proper steps to ensure compliance with local regulations and set yourself up for success. Here's a numbered list of steps to get started:

1. Research and understand the short-term rental regulations in Monterrey and Nuevo Leon state. Familiarize yourself with the city's permit requirements, zoning restrictions, tax obligations, and any other relevant rules.
2. Determine if your property is eligible for short-term rental use. Check the zoning of your property and ensure that vacation rentals are allowed in your area. Review any HOA rules that may restrict short-term rentals if you're in a condominium or gated community.
3. Register your business with the Mexican tax authorities (SAT) and obtain a tax ID number (RFC). This is required for all business owners in Mexico, including short-term rental operators.
4. Apply for a Municipal Operation License for Short-Term Accommodation from the Monterrey Municipal Development Secretariat. Submit all required documents, including proof of property ownership, identification, floor plans, and your RFC number.
5. Register with the Nuevo Leon Ministry of Tourism to obtain a state-level tourism registration number. This involves providing documentation similar to the municipal license application.
6. Set up your business entity, such as a sole proprietorship or LLC, and open a separate bank account for your rental income and expenses. Consult with a local accountant or attorney to choose the best structure for your situation.
7. Prepare your property for guests by furnishing, decorating, and equipping it with necessary amenities. Consider hiring a professional photographer to take high-quality photos for your online listing.
8. Create a detailed property listing on popular vacation rental platforms like Airbnb and VRBO. Be sure to highlight your property's unique features, amenities, and location. Include your municipal license number in the listing.
9. Establish a system for managing bookings, guest communication, cleaning, and maintenance. Consider using vacation rental software to automate tasks and streamline operations.
10. Determine your pricing strategy based on local market rates, seasonality, and your expenses. Research comparable listings in your area to ensure your rates are competitive yet profitable.
11. Implement guest screening and check-in procedures to ensure the safety and security of your property. Clearly communicate house rules and expectations to guests before and during their stay.
12. Comply with all tax requirements by collecting and remitting the 16% VAT and 3% lodging tax on your rental income. Keep accurate records of all transactions and consult with a tax professional to ensure proper reporting.
13. Continuously monitor and adjust your business practices based on guest feedback, market trends, and any changes to local regulations. Stay informed and engaged with the short-term rental community in Monterrey to share best practices and advocate for fair policies.

By following these steps and remaining diligent in your compliance and customer service, you can build a successful short-term rental business in Monterrey. While the process may seem daunting at first, with proper planning and execution, you can tap into the growing demand for vacation rentals in this vibrant Mexican city.

Who to Contact in Monterrey about Short-Term Rental Regulations and Zoning?

If you have questions or need assistance with short-term rental regulations and zoning in Monterrey, there are several key contacts and resources available:

1. Secretaría de Desarrollo Urbano y Ecología de Monterrey (Monterrey Secretariat of Urban Development and Ecology)

Handles zoning and land use regulations for the city and issues permits for short-term rentals

Phone: +52 (81) 8130-6565
Email: sedue@monterrey.gob.mx
Address: Zaragoza 1000 Sur, Centro, 64000 Monterrey, N.L., Mexico

2. Tesorería Municipal de Monterrey (Monterrey Municipal Treasury)

Manages the collection of the 3% lodging tax on short-term rentals

Phone: +52 (81) 8130-6100
Email: tesoreria@monterrey.gob.mx
Address: Zaragoza 1000 Sur, Centro, 64000 Monterrey, N.L., Mexico

3. Secretaría de Turismo de Nuevo León (Nuevo Leon Ministry of Tourism)

Handles the state-level tourism registration for short-term rentals

Phone: +52 (81) 2033-3000
Email: contacto.turismo@nuevoleon.gob.mx
Address: Calle 5 de Mayo 525 Pte, Centro, 64000 Monterrey, N.L., Mexico

4. Servicio de Administración Tributaria (SAT) - Mexican Tax Administration Service

Manages federal tax registration and payments for short-term rental operators

Phone: +52 (55) 627-22-728
Website: www.sat.gob.mx

5. Asociación Mexicana de Profesionales Inmobiliarios (AMPI) - Monterrey Chapter

Professional association for real estate agents and property managers and can provide guidance on local short-term rental market and regulations.

Phone: +52 (81) 8143-2139
Email: contacto@ampimonterrey.com
Address: Río Amazonas 310, Del Valle, 66220 San Pedro Garza García, N.L., Mexico

You can get the most relevant information and guidance for operating a short-term rental in Monterrey by contacting the appropriate office or organization based on your specific needs and questions. Building relationships with these local authorities and staying informed about any changes or updates to regulations that may impact your business are important.

In addition to these official resources, connecting with other short-term rental owners and managers in the area can provide valuable insights and support. Joining local host groups on platforms like Airbnb or Facebook can help you network with experienced operators and stay on top of best practices and emerging trends in the Monterrey market.

What Do Airbnb Hosts in Monterrey on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions from Airbnb hosts on Reddit and BiggerPockets forums, opinions about Monterrey's local regulations are mixed. Here are a few key takeaways from these sources:

A brief mention that some hosts on BiggerPockets argue that Monterrey and other Mexican cities are unlikely to overly restrict short-term rentals because tourism is important to the local economy.

Some discussion that enforcement of short-term rental rules in Monterrey has been inconsistent so far, with many hosts able to operate without permits. But the city is seen as becoming stricter, especially for hosts generating complaints. This suggests Monterrey hosts have mixed views - appreciating the opportunity but wary of a crackdown.

References to Airbnb collecting lodging taxes on behalf of hosts in Mexico as of 2022 as part of an agreement with the government. This likely impacts host sentiment, but no direct opinions from Monterrey hosts are provided.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.