Written for Mexico. This analysis applies to Mexican federal tax law — ISR (income tax), IVA (VAT) and SAT rules — and cites Mexican statutes. Amounts are in Mexican pesos (MXN).
In Mexico it is now illegal — not suspicious: illegal — to pay for certain transactions in cash above precise amounts. The prohibition lives in art. 32 of the Anti-Money-Laundering Law (LFPIORPI, official text in the Resource Center) and reaches exactly the purchases where cash was the tradition: the house, the car, the watch. And because the caps are set in UMA (Mexico's inflation-indexed daily reference unit), they rise every year without anyone publishing the new figure in your newspaper.
The amounts, in 2026 pesos
With the 2026 UMA at $117.31 (INEGI), the prohibition thresholds work out like this (our own calculation on the law's caps in UMA — high confidence in the multiples, the exact peso figure floats with the UMA):
- Real estate: it is prohibited to settle in cash (or metals) amounts above 8,025 UMA ≈ $941K — whether it is the creation or the transfer of rights. In practice: virtually no real property sale can be touched with cash, and notaries watch for it because their own liability is part of the package.
- Vehicles (new or used), jewelry, metals and precious stones, watches, artwork and gaming and raffle tickets: a cap of 3,210 UMA ≈ $377K. The used car worth $450K paid in bills is a prohibited transaction — for both parties involved.
What happens if it is breached
The LFPIORPI fines are among the heaviest in the administrative system — for these prohibitions, on the order of tens of thousands of UMA or a percentage of the value of the act, whichever is greater (the exact range depends on the case — verify it in the law; the scale is, in any event, devastating compared with the 'savings' of using cash). And the damage does not end there: the transaction stays flagged, the notary who consents to it risks their license, and the payment becomes undocumentable — which connects to the collateral effect almost no one sees coming.
The collateral tax effect: cash leaves no deductible trace
In parallel to the anti-money-laundering ban, the LISR already denied the deduction of payments above $2,000 not made through banking channels — and for the buyer of real estate in cash, the problem blows up years later: the acquisition cost that cannot be demonstrated with a bank flow is a cost the authority can disregard on resale, turning the entire price into taxable gain. Add the visibility of cash deposits on the seller's side and the tax discrepancy on the buyer's side, and there is only one conclusion: in wealth transactions, cash doesn't buy discretion — it is an evidentiary liability working against you on three fronts at once.
About to close a large deal and someone proposes 'part in cash'?
That proposal transfers the entire risk to you: the anti-money-laundering fine, the non-deductible cost and the inability to prove the payment. The correct structure of any wealth transaction — a traceable bank flow, a contract with fecha cierta (a legally provable date), an archived CEP (the interbank payment certificate), and the tax treatment of every peso — is designed before signing. It is a session that shields millions.
Frequently asked questions
Can I pay part in cash under the cap and the rest by transfer?
The law bans settling in cash amounts 'above' the threshold in the transaction — a mixed payment with a cash component under the cap does not breach the literal prohibition, but keeps the tax problems fully intact: that portion is non-deductible/undemonstrable as cost and visible as a deposit on the other side. Legal does not mean advisable.
Does the limit apply between private individuals or only with companies and notaries?
The prohibition of art. 32 applies to the acts, not to the status of the parties — the sale of a car between private individuals is equally covered. The practical difference is enforcement: with notaries (fedatarios) and vulnerable activities involved there are parties obligated to refuse the cash; between private individuals, the breach surfaces later — typically when the money seeks to enter the banking system.
I sold something and was paid in cash legally (under the cap) — anything to watch?
Yes: deposit it with a paper trail. A cash deposit with no documented history (contract, CFDI if applicable, identification of the payer) is exactly what deposit reviews turn into presumed income. Legal cash also needs a file.
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