Property Taxes / Impuesto de Propiedad
Property taxes in Costa Rica are much lower than in the US and Canada. The tax is 0.25% of the assessed value of your home or property. If your home is valued at $100,000, your property tax would be $250 for the year. Your value is decided by either the value it is registered at the National Registry (Registro) or the price at the purchase of the home. By law, it is the responsibility of the home owner to have their property reassessed every 5 years. If your home is assessed by the municipality, it is more than likely it will be assessed at a higher value so because of this, it is best you do so yourself. The tax year runs from 01 October of the current year to 30 September of the succeeding year Individual Tax
There are two forms of taxes, the Municipal Tax and Real Estate Tax. The Municipal Tax is administered at the municipal level and varies throughout the country. Paid quarterly, the type of property, location and other factors contribute to the calculation of this tax. The Real Estate Tax in based on the declared value of the property, at a rate of 6%. This tax is applicable throughout the country regardless of the properties location.
Nonresident individuals are liable to tax only on their Costa Rican-sourced income. Married couples are taxed separately.
Luxury Home / Impuesto de Solidaridad
The Costa Rican government enacted this law for the sole purpose of assisting families in poverty with new homes. The Tax Office / Direction de Tributacion developed guidelines for appraising homes and properties. This tax is based on calculation the construction values (finishing/ window/floors/ granite tops vs. tile/ electrical and plumbing). If your home is valued above 117 million colones, or about $
This tax was enacted by the Costa Rican Congress in November 2008. It went into effect October 1, 2009 and will be in effect until October 1, 2019, but have you ever really know a tax to go away? The Tax Office (Direction de Tributacion) developed the guidelines for the appraisal of buildings and land. The purpose of the Law is to tax “luxury homes” in Costa Rica so the Costa Rican government can to provide homes to families in extreme poverty. The tax is based on calculating the construction values, as in the finishes, type of windows, type of flooring granite tops verses tile and more as well as electrical and plumbing systems. If the construction value exceeds 117 million colones, or about $245,000 USD depending on currency exchange rates, the home is then classified as a ‘luxury home,’ and must pay the annual tax. After the construction cost is calculated, the value of the land is added, and the tax is finally calculated at a rate of 0.25% to 0.55% of the total estimated value and based on a sliding scale.
Is there a Capital Gains Tax?
There is no capital gains tax which is appealing if you want to make a foreign investment. You will not be taxed by the Costa Rican government on the profit from the future sale of your property as long as this is not undertaken as a means of business. You would be obligated to pay taxes on any “declared” earnings being brought back to your country of citizenship.