Property and Luxury Taxes
In addition to the standard property tax that everyone pays, Costa Rica also has a luxury tax you may be required to pay depending on the construction value of your property, as well as the type of property you have.
Property taxes in Costa Rica, as compared to other countries, are pretty reasonable. The property tax is paid either once a year in February or you can pay every quarter by the last days of the months of March, June, September, and December. The amount is 0.25% of the declared value and it applies to all types of properties. Every 5 years you have to submit a new declared value to the municipality of which they will either approve or disapprove of your valuation in about a year. You calculate this by determining your land value (see links below) plus construction value. Then you need to add your construction value, including fences, pool, driveway, ranchos, etc. This can be done by previous values submitted plus any improvements that were done since the last declaration. If you don’t file your declaration every 5 years, then the municipality will do it for you and you will have to accept their appraisal.
Luxury Tax (Impuesto Solidario)
The luxury tax was established to pay for housing for low-income citizens. It is paid to the “Hacienda”, which is the national tax collecting authority. If your house or condo is for permanent, occasional, or recreational use and has a value of over 131 million colones (2019) construction value, not including the land value, then you will have to pay a luxury tax. This tax is due each year by January 15th and is declared every 3 years. If you find that your construction value is over the minimum, then you add the value of your land (see links below) to the construction value to get the total amount that you will be taxed on. Any property used commercially is not subject to this tax. Any part of your construction that is for commercial use, such as an office, or a barn used for agricultural production, can be deducted from the total construction value when determining whether or not your property exceeds the minimum. If it still exceeds the minimum, then you can still deduct those values from the total plus any part of your land that falls under commercial use, such as working farmland.
As opposed to the standard property tax where failure to make your declaration will result in an appraised value made by the municipality, if you fail to make your declaration by affidavit to the Hacienda on time, you will be fined and interest will be charged on the amount you owe. Inspections are possible to verify your declaration.
For condominiums, you have to include the value of your condominium’s construction, PLUS, the value of your percentage of any other construction in the common areas such as clubhouses, pools, gyms, sidewalks, internal streets, storage areas, etc., then if you exceed the minimum, you will need to add your portion of the land value as well to determine how much tax to pay.
Any new construction done on your property has to be added by the 3-year due date to redeclare your value. So, for example, you just declared your current value and then decide to build a pool next week, you don’t have to pay the added luxury tax on the pool until the next declaration.
Ok, now that you have the value of your construction (that exceeds the minimum of 131 million colones) and added the value of your land, you will need to sum up the results of each of the brackets below to determine the total that you owe. We have created a calculator to make it easy for you! Click here to find it.
From ¢131.000.000 to ¢329.000.000 0.25%
¢329.000.000 to ¢659.000.000 0.30%
¢659.000.000 to ¢988.000.000 0.35%
¢988.000.000 to ¢1.318.000.000 0.40%
¢1.318.000.000 to ¢1.646.000.000 0.45%
¢1.646.000.000 to ¢1.978.000.000 0.50%
¢1.978.000.000 and above 0.55%
So, for example, the full value of your property is 720 million colones, you would calculate your tax as follows:
329,000,000c x .0025 = 822,500c
330,000,000 x .0030 = 990,000c
61,000,000 x .0035 = 213,500c
822,500 + 990,000 + 213,500 = 2,026,000 colones luxury tax total.
Again, you can use our calculator to make it easier to find your total for both the standard property tax and the luxury tax.
Property Value Maps by Province
The information on this page can change anytime due to changes in the current law. Please consult your accountant for updates and more details or call our office at 2637-1919 or (888)772-8890 US/Canada to consult with our property management accountant.