What Taxes Would I Pay Living in Costa Rica? Free video
My name is Michael Simons and I’m a professional Realtor here in Playa Hermosa, Guanacaste, Costa Rica.
I’ve been a permanent resident of Costa Rica since 2003 and I am a certified licensed Realtor with the Costa Rican Guanacaste Association of Realtors.
What Taxes Would I Pay Living in Costa Rica
Costa Rica for the most part has very low taxes. As we’ve talked about, property taxes are one quarter of one percent. There are no capital gains taxes when you sell your property in Costa Rica and income tax overall is very low.
Most people fall into the 10 percent bracket. But people ask, “How do they make money in Costa Rica? How do they pave the roads? How do they take care of the schools?” There are two ways.
The first way is with the national sales tax. So there is a sales tax on everything that you purchase from a car, to a television, to everything but food and that’s in my opinion how it should be.
There should be a tax on the people that are spending the money, not necessarily a tax on people making it. The second way that Costa Rica generates income is through a transfer tax on real estate.
When you purchase a property in Costa Rica, there will be transfer taxes through the national registry which is the government of Costa Rica, the legal fees for the attorney representing you at closing, an escrow fee for handling the money and generally a cost for the corporation and some minor other costs associated with things like transferring the utilities, those types of things.
Overall, the entire closing procedure is very simple and all in it’s going to cost you about four percent of the purchase price. So if you’re purchasing a $200,000 property, plan on spending about $8000 all in for closing costs.
But you have to understand. When you sell that property X amount of years from now for $300,000 you’re not going to pay a capital gains tax. You’re also going to pay very, very low property taxes over that same amount of time.
So this way you know going in this is what it’s going to cost me to own this property and you’re not going to have huge fees and taxes later on down the line.
Come on down baby!
What Taxes Would I Pay Living in Costa Rica? Free video
Article/Property ID Number 5479
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Andrew Makarik
to@welovecostarica.comAndrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.
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