Plan to purchase a Costa Rica luxury home? Then you should read on. Because the Costa Rica Luxury Home Tax is important for your future. The Costa Rican tax authorities created the Luxury home tax or Impuesto Solidario in 2009.
This book is a Costa Rica luxury home tax guide to calculating the value of your property in Costa Rica. It also assists you in filling out the luxury home tax forms. And it takes into account all the guidelines that are given by the Ministry of Tax (Ministerio de Hacienda).
It doesn’t matter if your luxury home is located in the Central Valley, a luxury home on the golf course or a luxury home on the beach, the luxury home tax is for the whole country of Costa Rica. Finally, if you are buying a Luxury home in Costa Rica or selling one, you should know what you are up to.
By Roger A. Petersen
Attorney at law
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The Costa Rica luxury home tax
The book about the Costa Rica Luxury Home tax or Solidarity Tax contains active links to an extensive array of documents, laws, regulations, valuation maps, and calculation tables. You can either download the information or access directly using this book.
Together, this should provide you with a good framework for making an informed decision about what you should do with this new tax. In conclusion, we are talking about la Ley 8683. This is the impuesto solidario para el fortalecimiento de programas de vivienda.
Land valuation maps
While the Ministry of the Treasury has also compiled land valuation maps for most of Costa Rica, most of these maps were completed in 2008. In addition, the Ministry of the Treasury expects the local Municipal governments to incorporate them into their valuation standards.
The Legislature has placed into the law sanctions for not complying with the law. Specifically Article 12 of the law establishes fines and penalties for either failing to file the required declaration form or filing the form but under reporting the value of the property.
Failing to file?
The Costa Rica luxury home tax law imposes sanctions for failing to file IF the tax is due or UNDER REPORTING the value of the property. However, the law does not mention any sanction or penalty for NOT FILING if you don’t owe anything. As such, if the value of your property is under the ¢126,000,000 (during 2016) you should probably not file anything. If you are borderline it would be good to have some sort of appraisal on file in case you are audited in the future. Owners of properties in condominium should contact their condominium administrator or board of owners.
Especially those who own property in large and expensive gated communities are bound to be checked on first.
More than 300 m2 construction
Those who have more than 300 m2 (3,300 sq.ft.) construction should get an appraisal.
Appraisal fees run all over the map. I have found 5 companies that do appraisals for banks and other institutions, who have years of experience and will take responsibility if the government does not accept their appraisal. They will charge depending on the location of your property and the size of your property.
The appraisers usually include in this the cost of pulling a study of your property in the National Register and pulling a survey, so you don’t have to worry about this.
Also, they will calculate the common areas if you live in a gated community or condominium.
A lower value than $233.5K
In 2017, properties with construction of a lower value than ¢126,000,000 are exempt of paying the fee of 0.25% over your appraised value. (about $233,500 at exchange of ¢540/$1)
Tax rates for 2017 are
Up to ¢316.000.000,00 – 0,25%
From ¢316.000.000,00 up to ¢634.000.000,00 – 0,30%
From ¢634.000.000,00 up to ¢950.000.000,00 – 0,35%
From ¢950.000.000,00 up to ¢1.268.000.000,00 – 0,40%
From ¢1.268.000.000,00 up to 1.584.000.000,00 – 0,45%
From ¢1.584.000.000,00 up to 1.903.000.000,00 – 0,50%
Over ¢1.903.000.000,00 – 0,55%
Obligation to file
There is no obligation to file if you are under that value. If your property is borderline, we recommend filing. You have to file before the 1st of January 2010. If you don’t file and they catch you as a result, you will be charged 10 times the tax you should have paid. If you file the wrong values, they will charge you 5 times the tax.
As you can see, we have tried to make this as easy as possible for you and we are not charging you for this, we just wanted you to receive the usual after-sale service that you are used to as a AE Real Estate Group client.
If you are in need for a luxury home tax appraisal, send us an email at email@example.com and we’ll refer you to a registered appraiser.
The purpose of the law
ARTICLE 1.- Purpose of the Law
The creation of this tax is in favor of the central Government. The tax will finance public programs for the poor or extremely poor.
Only residential properties will have to pay the Costa Rica luxury home tax. In addition, property used occasionally or for recreation, including fixed and permanent premises pay the tax.
For more on Costa Rica luxury home tax, feel free to purchase the E-book by Attorney at Law Roger Petersen through the above link or click here.