Property Taxes

Congratulations!, You own a Piece of Paradise, but what now?

As a result of the tremendous amount of wrong information about Costa Rica Property Taxes, how it works and what to do, Costa Rica ABC decided to pay special attention to this very sensitive area and help the owners of real estate in Costa Rica to understand the rules and furthermore, help them to be in full compliance and not to jeopardize their investment. So here are the facts:

Owning Real Estate through a Costa Rican Corporation:

If you own a Corporation in Costa Rica you also have responsibilities, even if you get your Costa Rica Corporation only for your Real Estate investment, for instance:

  • If yours is not an income generating property, then you don’t have to worry about paying any other tax, not even Capital Gains Taxes, but the Yearly Education and Culture Stamp, which is a minor tax over the stock equity of every corporation (S.A. or SRL) registered in Costa Rica.
  • If yours is an income generating property, vacation rental for instance, then you have to keep proper records of your incomes and expenses and report that to the Costa Rican Tax Administration.
  • Keep in mind that if your tenant needs to write off the rent payment, then the payments made to your Costa Rica Corporation might be reported by the tenant; therefore the Tax Administration would know there is a taxable activity taking place.
  • Althought there is a lot of confusion when it comes to the Corporations Tax, it still up, so both active and inactive corporation are liable for thise Tax, 2015 is the last year, according to Costa Rican Supreme Court.

Property Taxes:

The property taxes are mandatory in Costa Rica and payable to the local Municipality, regardless if we are talking about raw land, single lots, condominiums or regular houses owned by individuals or Costa Rica Corporations. So you need to observe:

  • The reported value matches at least the assigned value to the area where the estate is according to the Local Municipality, by the book the reported value should be what you paid.
  • Pay quarterly, at least, the Costa Rica Property Taxes, you can choose also a yearly payment.
  • To update that price every 5 years.

Currently several Costa Rican Municipalities are foreclosing properties because the owner failed paying the property taxes on time, by using the new Foreclosure Law created back on May 2008.

Luxury Homes Tax

This is the most recent tax created by Costa Rica Government and will tax only residential properties, including features such as pool, tennis court, BBQ Ranch, etc; if the value gets to  ₡ 128,000,000, starting at 0.25% and with a maximum tax rate of 0.55% since it is a progressive tax. As follows some of the bullet points:

  • The value of the house is determined by a Guide designed by the Government, not by the paid price or the reported value at the local Municipality, actually, this information will be forwarded by the Costa Rica Tax Administration to the Municipalities for them to double check the reported values for Regular Property Taxes.
  • Once the tax basis is determined, a tax return must be filed and the tax must be paid.
  • If there is any improvement or addition to the construction it has to be reported on the next tax return.
  • Commercial properties such as hotels, office buildings, etc. are not subject of this tax.

When it comes to the Luxury Homes Tax, the key is to fill out the above mentioned guide in order to make sure if your property meets the criteria.

If you want Costa Rica ABC to help you figure out if you property falls into this category please subscribe to our Screening Service for just $75 by clicking on the button below:

Title Monitoring

Unfortunately, just within the last year, there were 540 cases of property frauds in Costa Rica, therefore you want to monitor the title of the property and make sure:

  • The property still yours.
  • Get a monthly comprehensive report of your property title status.

DISCLAIMER:THIS IS NOT A TITLE INSURANCE, THE TITLE MONITORING SERVICE IS PROVIDED TO MAKE SURE THAT YOUR PROPERTY IS NOT BEEN SUBJECT OF FRAUD AND IN CASE IT IS YOU CAN FILE THE PROPER CLAIM ACCORIDNG TO COSTA RICA LAWS AND PROCEDURES.

How can we help

For this comprehensive and personalized SLICE OF PARADISE PROTECTION service – where we take all the property ownership headaches away from you so that you can focus on enjoying your time here and not waiting around for hours in various banks and government agencies or worst case scenario lose your property – , we�ll do on your behalf:

LAND PACKAGE ($375.00)

  • Screening the status of your Costa Rican Corporation (Filings, Books, Stocks, Ownership, Representation).
  • Filing the yearly form D101 (Income Tax for the current year) for your Non Income Generating Costa Rica Corporation. If yours is an Income Generating Property please contact us.
  • Filing the yearly Form D110 (Education and Culture Stamp for the current year).
  • Screening your Property Status at the Costa Rican Property Record Office.
  • Screening your Property Status at the Local Municipality in terms of reported value and pending taxes.
  • Taking care of the yearly payment of the regular Property Taxes on your behalf. (the amount of the taxes is not included on the price below).
  • Monthly Title Monitoring.

STANDARD HOUSE PACKAGE ($430.00)

  • Screening the status of your Costa Rican Corporation (Filings, Books, Stocks, Ownership, Representation).
  • Filing the yearly form D101 (Income Tax for the current year) for your Non Income Generating Costa Rica Corporation. If yours is an Income Generating Property please see our STANDARD RENTAL HOUSE PACKAGE option.
  • Filing the yearly Form D110 (Education and Culture Stamp for the current year).
  • Screening your Property Status at the Costa Rican Property Record Office.
  • Screening your Property Status at the Local Municipality in terms of reported value and pending taxes.
  • Taking care of the yearly payment of the regular Property Taxes on your behalf. (the amount of the taxes is not included on the price below).
  • Monthly Title Monitoring.
  • Screening your Property to make sure if it falls or not into the new Luxury Home Tax. If by result of the screening your property falls into the Luxury Home Category, there will be an extra fee for filing the mandatory forms D144 (one time) and D179 (Yearly).

STANDARD RENTAL HOUSE PACKAGE ($580.00)

  • Screening the status of your Costa Rican Corporation (Filings, Books, Stocks, Ownership, Representation).
  • Filing the yearly form D101 (Income Tax for the current year) for your Income Generating Costa Rica Corporation.
  • Filing the yearly Form D110 (Education and Culture Stamp for the current year).
  • Screening your Property Status at the Costa Rican Property Record Office.
  • Screening your Property Status at the Local Municipality in terms of reported value and pending taxes.
  • Taking care of the yearly payment of the regular Property Taxes on your behalf. (the amount of the taxes is not included on the price below).
  • Monthly Title Monitoring.
  • Screening your Property to make sure if it falls or not into the new Luxury Home Tax. If by result of the screening your property falls into the Luxury Home Category, there will be an extra fee for filing the mandatory forms D144 (one time) and D179 (Yearly).

LUXURY HOUSE PACKAGE ($580.00)

  • Screening the status of your Costa Rican Corporation (Filings, Books, Stocks, Ownership, Representation).
  • Filing the yearly form D101 (Income Tax for the current year) for your Non Income Generating Costa Rica Corporation.If yours is an Income Generating Property please see our LUXURY RENTAL HOUSE PACKAGE option.
  • Filing the yearly Form D110 (Education and Culture Stamp for the current year).
  • Screening your Property Status at the Costa Rican Property Record Office.
  • Screening your Property Status at the Local Municipality in terms of reported value and pending taxes.
  • Taking care of the yearly payment of the regular Property Taxes on your behalf. (the amount of the taxes is not included on the price below).
  • Monthly Title Monitoring.
  • Screening your Property to make sure if it falls or not into the new Luxury Home Tax.
  • Filing the mandatory registration form D144, this form is filed only once.
  • Filing the mandatory yearly tax return form D179 for the current year.

LUXURY RENTAL HOUSE PACKAGE ($730.00)

  • Screening the status of your Costa Rican Corporation (Filings, Books, Stocks, Ownership, Representation).
  • Filing the yearly form D101 (Income Tax for the current year) for your Non Income Generating Costa Rica Corporation.
  • Filing the yearly Form D110 (Education and Culture Stamp for the current year).
  • Screening your Property Status at the Costa Rican Property Record Office.
  • Screening your Property Status at the Local Municipality in terms of reported value and pending taxes.
  • Taking care of the yearly payment of the regular Property Taxes on your behalf. (the amount of the taxes is not included on the price below).
  • Monthly Title Monitoring.
  • Screening your Property to make sure if it falls or not into the new Luxury Home Tax.
  • Filing the mandatory registration form D144, this form is filed only once.
  • Filing the mandatory yearly tax return form D179 for the current year.

NOTES:

  • Taxes to be paid by the clients are not included on the price.
  • Mail or courier charges to deliver the documents are not included on the price.
  • If as a result of any of the above listed screenings additional work has to be done it will be communicated by Costa Rica ABC to the client and the fees will be discussed then, The $375.00 does not includes any potential correction work derived from the screenings.

All this starting at just $375 per year!, and you will remain sure that your property is protected from any tax issue.

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