Acquiring properties in Costa Rica comes with a cost, though certainly justified and fair, considering that properties here are most sought after in the region. They command a great price and are considered a luxury, especially in the most affluent regions such as the Gold Coast. Most will not hesitate to pay what is due and mandated by law.
Paying luxury tax is one of the requirements for having properties in Costa Rica. In 2008, the government enacted the Solidarity Tax, the luxury tax paid by those who owned luxury properties. They call it Solidarity Tax because the tax is used to finance housing projects for Costa Ricans who need decent housing.
Those who own properties worth 220,000 dollars and above are required to pay a certain amount as mandated in the act. To know the property's actual value, the owner must calculate the value of land, construction, and the accessories available in the property.
The rates concerning the luxury tax on properties are the following:
$220,000 - $520,000 = 0.25%
$520,000 - $1,046,000 = 0.30%
$1,046,000 - $1,570,000 = 0.35%
$1,570, 000 - $2, 095,000 = 0.40%
$2,095,000 - $2,615,000 = 0.45%
$2,615,000 - $3,141,000 = 0.50%
Above $3,141,000 = 0.55%
Those who have properties must enroll before the Tax Administration and fill out forms regarding payment of properties, such as D-179. After which, they must file the D-179 then to the Virtual Tax Administration site and update it every three years to account for changes and fluctuations in property value.
The filing must not be beyond January 15 of every year, as mandated in the Solidarity Tax Act. Tax payments must also be made yearly. Those who fail to do so, or will pay late, risks incurring fines and penalties as prescribed in the said act.
If you have further questions regarding luxury taxes and other concerns, please contact us. We are more than willing to help.
Call Kim Mungle (CIPS, RSPS) on
US - 1-907-209-7596
Tollfree US/Canada - 1-888-776-1106
Costa Rica - 011 506-8568-1260