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We just had our house plans stamped by the municipality so our contractor says we need a workmans’ compensation policy from INS and we have to pay construction taxes to the municipality. Is this the process as you all have experienced it? Are the construction taxes different form our property tax because $2000. for a 200m2 house and pool seems high? Thanks, Rita
Rita
You have to really watch out so that you do not get trapped. I am building 23 houses and from the INS agent in Quepos charged me $1800. This is the whole fee for worker’s comp. Quite a deal. Now when you get the WC insurance all of the contractor’s workers are listed. This list gets turned over to the Municipality and they know how much withholding tax is going to be needed to build. So at the end of every month they are going to be looking for the withholding tax from the workers. If you are paying the contractor to pay wages-why give him more money than you have to? If he doesn’t pay the monthly tax quess who gets charged? YOU. You need to talk to my Architect who has 30 years of experience and make sure you offer to pay him for his review. Leo Barrants speaks excellent english. If you have any doubts please do yourself a favor and talk to Leo Barrantes email leobarra108@yahoo.com.ar You are going to save money in the long run. Let us know how it works out.
Stan PutraStan:
Are you saying that the builder is responsible to pay the workers’ comp and he might be trying to get us to pay it instead of him? We assumed that INS was like construction liability insurance which we the owners should have in case someone gets hurt. Do we not understand the system? Leo is a wonderful architect and he designed our house but it was too expensive to bring him and his builders to the Tilaran area. We are now using local people and just want to be sure we’re checking the checker.
Thanks,
RitaEdited on Jan 06, 2008 17:24
You know Leo then. Call hi and ask him. You have to pay the workers comp. BUT the contractor pays his workers and is suppose to withhold tax and submit it monthly to the Government. If the contractor doesn’t do it the Gov comes after you. Who is keeping an eye on the contractor? and his workers? Does Leo know the contractor?
StanI’m not sure it’s set in stone, but somebody (the owner-to-be or the contractor/builder) is responsible for (1)a worker’s compensation insurance policy (which must be obtained from INS) which covers the injury or death of a worker on your building site and (2)the legally mandated withholding and employment taxes which cover at least the Social Security costs. During the construction of both our houses, from time to time a guy from Social Security would show up unannounced with a computer printout of those who were listed as working on the site. If somebody new was present, some adjustment had to be made.
It is entirely negotiable with the builder/contractor who pays these costs, but it needs to be specified. Our Workers’ Compensation policy cost around $1,800US. The Social Security payments can easily amount to more.
Great information about workers’ comp insurance but was that $1800 for 23 houses that Stan was building and $1800 for 1 house that David built? Big difference!!
The question about property owners’ liability insurance is still outstanding. I hear construction insurance isn’t available but can we get some sort of policy to cover liability for anyone other than the workers? Obviously there will be others all over our land. Thanks again, RitaRita, my guess is that the policies INS sold Stan and us cover the site for the duration of the building process. When we built our guest house, we had four or five workers on-site. When we built the main house, we had as many as fifteen. The policies cost the same.
INS also sells homeowner’s insurance which affords (or can be tailored to afford) liability protection for casual workers on your property, such as someone installing drainage or landscaping, and which can afford liability coverage for visitors. You need to talk to INS to get the straight dope.
David:
Thanks so much for the info. What you say makes sense. I hope we can find a way to get in touch with everyone who has given us valuable tips and information like this so everyone can come to our house warming. We can’t wait to become part of the community even if we are way up in Tilaran.
Thanks again,
RitaIt’s best not to try the Do It Yourself method. Some people, in trying to save some dollars in legal fees, avoid the work of finding a good attorney to write a thorough construction contract that is in your favor. There is no yellow brick road in Costa Rica. Do your homework, just as you would do in the real world. Find an attorney you feel comfortable with and stay with him for as long as he continues to do good work for you. Then, you won’t get stuck with an employee liability problem.
We agree totally about the do-it-yourself method, especially since we are not even close to being fluent Spanish speakers. We have a general contractor,and labor contractor. Our lawyer assured us that the contract written for us is a mirror of the one for her recent construction. The only problem was that we did not know that she and now we are responsible for the workers comp and social security. Now that we know that is how it is often done here, which is different from the way it is done in NY, we just need to adjust. Our biggest surprises in our experiences in Costa Rica are just the differences in laws and practices but we’ll adjust. It’s a different system and that’s part of the reason we’re relocating. Thanks for the words of wisdom.
Rita
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