Updated property values, along with removal of heavy subsidies along the coast, have led to a steep jump in property taxes for many in Puerto Peñasco this year. Technically, explained City Secretary Atty. Miguel Angel Maciel Felix, the property tax itself remains at 8.8% per thousand, though the above extenuating factors have bumped up rates.
At a press conference held Thursday, Jan. 12th, the City Secretary was joined by Director of Revenue Luis Molina Coronado to clarify these points and address several questions that have arisen given this year’s steep hike.
Despite the rise, Maciel Felix and Molina Coronado underscored the higher discount incentives this year, providing for a 25% discount on property taxes paid in January, 20% in February, and 15% in March. Revenue Director Luis Molina Coronado further indicated there are payment plans possible for those with outstanding balances.
Maciel Felix detailed two particular factors that have impacted property taxes in the area this year: updated property values (which had not been appraised for two years), and a significant change in the percentage of state subsidies applied to properties.
The City Secretary explained, “In November 2022, the State Congress approved updates to cadastral values for 2023, which had not occurred for a period of over 2 years. The cadastral value comprises of the value of the land and that of construction. The cadastral value for this period definitively reflects the current property tax amount; therefore, a higher property value automatically implies an increase in the amount owed.”
“In addition,” continued the City Secretary, “within the 2023 revenue law approved in December for the 72 municipalities in Sonora, modifications were made to what is known as a “reduction rate” (rather, subsidy). This means that for anyone who owns property in Puerto Peñasco, their property tax includes a reduction rate. There are two types of reduction, one for the urban area and the other for what is considered the tourist zone.”
“The tourist zone had received up to an 88% reduction in some parts, and 80% in others; similarly, the urban zone received this same reduction percentage,” explained Maciel, “Nevertheless, the reduction (subsidy) level was reduced in the tourist zone from 80% (or 88%) to 40%. This means these properties previously had only paid 12% – 20% of the determined tax, and now they are going to pay 60%. This is how I can best explain what happened with the property tax; in conclusion, while there was not an increase in the tax rate, there was a reduction in the subsidy rate on the updated property values.”
Criteria applied by the Municipal Urban Development Office is used to determine what comprises the urban vs. tourist zone distinction, though the latter specifically encompasses coastal areas. “From Blvd. Costero (road toward [Sandy Beach] condominiums) up to the Federal Zone,” outlined the City Secretary, “in La Cholla, just along the coast; in Las Conchas, Blvd. Mar de Cortez to the beach, the Malecon (coastal front), in the Mirador the strip from Ave. Campeche to the beach.”
Maciel Felix emphasized the most important revenue for the municipality comes from property taxes, and “obviously the city has to recover revenue from a reduction in these subsidies.” Looking back to the “boom” Puerto Peñasco experienced from 2003 – 2007, he remarked, “There’s a reason as to when the subsidies were established, as an incentive because property tax payments exploded, so much so the State Congress had to consider some type of reduction. Today, however, there is more stability and there’s no longer a reason for these rates to exist in determined areas.”
The City officials stated the rise in revenue will be reflected in benefits throughout the city, noting accomplishments this past year (prior to the increase) to address outstanding balances and road paving projects, among others. Maciel Felix expressed, “benefits will be reflected for those with higher payments, or rather the tourist zone, such as a pedestrian corridor along Blvd. Costero, improvements to city entrances (Las Conchas, from the Golfo, and Sonoyta); this will be reflected in greater impacts for a better image of Puerto Peñasco so that it continue to be the best destination and gain even greater acceptance; also, so that those who pay more in property taxes see this reflected in projects made possible through the tremendous impact to their wallets.”
The City Secretary, along with the Director of Revenue, acknowledged there are cases where property taxes have risen 100% – 200%, and even 500% to 600% in the “tourist zone.” Using one of the outlaying parts of the city, Maciel detailed, “for example, Colonia San Rafael is immensely large and had a value of 100 pesos/sq. meter when created in 2007. While no modifications had been done on paper, there had been changes in commercial values through sales. Plus, there were big changes; when the area was created in 2007 there were no services, and today a large majority of the area has these. This in turn must impact the value, and that’s what happened. Experts stated the adjustment from 100 to 200 pesos in cadastral land values obeys the principle of supply and demand, and obviously the commercial value is above 200 pesos(per sq. meter).
It is worth noting, Col. San Rafael is still considered to be one of the lower economic parts of the city and still lacks public services in areas.
Property Tax Discounts are again in place for payments made during the first three months of the year. It is notable, reiterated the City Secretary, these discounts are above those from past years, offering 25% off payments in January, 20% in February, and 15% in March. In addition, remarked the Director of Revenue, retired and disabled individuals who already receive an exemption will still qualify for this during the months Jan-March, though must complete paperwork in a timely manner at the Collections Office (with the possibility of a 50% discount from April-December).
Property taxes can be paid throughout the year, though all are encouraged to take advantage of available discounts now through March.
NOTE: We encourage you take a copy of your most recent tax payment to verify there are no additional charges (or mistakes regarding past payments)
The Municipal Collections Offices is located on Boulevard Kino (near intersection with) Constitution Avenue. Hours: Monday – Friday, 8 a.m. – 3 p.m. / Saturdays 9 a.m. – 3 p.m.