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Hi Scott,
Can attorney Peterson document that transfer fees are based on the actual value versus the fiscal value (registry value)? He satae they are based on the actual value.
I have been told by an attorney in Herdia that it is based on the fiscal value. She say that Gringos are always duped by attorneys that charge according the the actual value.
I am interested in seeing the civil code or law that sites what transfer fees are based on. Can you ask him to please site the code or law and put this debate to rest?
I am NOT an attorney but from what I know, it would appear to me that your attorney in Heredia is the one that is giving bad advice.
You can find a lot of information in Attorney Petersen’s book the Legal Guide To Costa Rica which you will find at [ https://www.welovecostarica.com/public/86.cfm ]. The Real Estate Transfer Tax costs are mentioned on page 119 and says that “The government collects a property transfer tax (Impuesto de Traspaso) which is equal to 1.5% of the registered value of the property.”
As you will see from Randall Zamora’s article ‘Your Costa Rica Property Taxes May Increase – Silly prices no longer accepted with FREE online video interview.’ [ https://www.welovecostarica.com/members/1784.cfm ]
“As a result of those attorneys that had been recommending to their clients to put ridiculously low purchases prices on the deed in order to save on transferring and property taxes, it seems that both local government (Municipalidad) and the Costa Rican Treasury Department (Hacienda) have had enough of that practice and finally decided to take action regarding this issue.”
“The buyer might think that this was great legal advice from the attorney but the truth of the matter is that lying about the valuation of your property will bring negative consequences in the long run.”
I will however ask an attorney to confirm this for us.
Scott Oliver – Founder
WeLoveCostaRica.comWe now have a very comprehensive answer to this question from Attorney Petersen.
This article will be published over the weekend but you can see it now at [ https://www.welovecostarica.com/members/1949.cfm ]…
Scott Oliver – Founder
WeLoveCostaRica.comThis posted in the wrong place by 2BNCR and reposted here by Scott
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Posted Oct 28,2008 8:53 AM 2BNCR
Well after reading the explanation, I spoke with my attorney who said, “Yes, that is how it is supposed to work, but rarely does.”
Now, let me explain something about this attorney. This attorney represents primarily Ticos.
“As such I do take issue with the statement made that: “Gringos are always duped by attorneys that charge according to the actual value,” since the ones that adhere to actual sales value are actually the ones compliant with Costa Rican Law and Bar Association Guidelines.”
In response to the above my attorney said, “attorneys frequently charge Gringos according to the actual value, then register the property according to the existing value in the registry (this is the fiscal value as was explained to me) – as they are accustomed to doing for “all” (this was the word that was used) purchases (mind you the attorney was speaking mostly about Tico clients). They then pay the fees to the government according to the fiscal value – and keep the difference.”
When I argued the legality of this, it was reemphasized “Tico clients do not want their attorney to report the actual value and insist that the registry value be used – as is “CUSTOMARY” (the word that was used).”
So maybe we could amend Attorney Petersons “appropriate statement” to read:
“The more appropriate statement should be that the Costa Rican Treasury and the Costa Rican People are being duped by SOME FOREIGN BUYERS and the MAJORITY OF TICO BUYERS that lie about the actual sales price of the property they purchase in violation of Costa Rica law. That would be a statement of fact.”
I think the issue here is not what the law says, but what is CUSTOMARY. The law in Costa Rica says you have to stop at Red lights and traffic signals, but it is hardly customary. And this is Costa Rica and it is the Ticos who have determined what is customary. It reminds me of the story of the white man and the Indians. The Indians hunted all day and the women did the chores (worked). Then the white man comes along to “civilize” them. They ruined a great culture because it was not built in their own image. Is that what we want to do here, by not behaving as the Ticos do?
And it seems the Ticos do not want to pay more money to attorneys and the government, what a novel idea… I guess that they do not behave, like we Americans do, with robotic allegiance when it comes to financially supporting the government and the attorneys that run it. I guess it is we who are naive. Therefore, I will continue to roll through stops signs and make a courtesy stop before I run a red light at night – as customary.
We will not be amending Attorney Petersen’s statement and we will continue to recommend to our VIP Members – most of whom guests in this country – that they follow the laws in Costa Rica.
Should you decide not to obey the law and follow what you believe is “customary” then that’s up to you.
Scott Oliver – Founder
WeLoveCostaRica.com
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