IVA is Mexico's value added tax, applied to the sale of every product and service except real estate, food, medicine, and medical care. It works much like the sales tax charged in the US and Canada.

In the context of your real estate deal, IVA doesn't apply to the property sale itself — but it is added to the fees and commissions charged by the lawyers, the notario, and the real estate agents and agencies. Mexico's IVA rate is 16% and has held steady there for many years.