Mexico’s cost of living is very low by global standards, with a Cost of Living Index around 34 and Rent Index near 10 relative to New York = 100, making daily expenses and housing highly affordable for residents and expats.

Home affordability is relatively good, with a property price-to-income ratio of about 6.4 years, while rents remain low outside prime areas of Mexico City and tourist zones, though prices have risen in main nearshoring and coastal markets.

Average incomes are modest and below many OECD countries, with a purchasing power index around 64; wages are improving in manufacturing and services but still limit domestic buying power despite low living costs.

Mexico has a progressive federal income tax from 1.9% up to 35% on higher incomes, a standard VAT of 16% (0% on some essentials), relatively low property taxes, and frequent rule changes that can make compliance complex for individuals and small firms.

Mexico ranked 60th in the final World Bank Doing Business 2020 report and remains a key nearshoring hub with strong manufacturing links to the US, but investors face bureaucracy, legal uncertainty, security issues, and uneven rule of law despite improving industrial regions.

The social security system (IMSS, ISSSTE, and public programs) provides mandatory health coverage, pensions, and some unemployment and disability support, but benefits and service quality vary sharply by region and formal vs informal employment status, leaving many informal workers underprotected.