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I did the exercise with the software, and the value for the house would be just a little under the construction cost. I started building in 2006 as well. I chose the value of the type VC07 3 years old and I had a 138 square meters construction. (more or less 1500 sq foot)
On the contrary, the value of the swimming pool was 1 1/2 times the cost 3 years ago. That includes the surrounding concrete terrasse and the bodega for the machines.
About the price of the market, all depends where the property is.
I have wanted to ask why on that software there is no option to value other improvements such as wall gates, grass land etc… maybe because if the house doesn’t range to the 100M colones, one doesn’t have to value other things.
Anyways, I liked the option to print everything if eventually the inspectors come to my property.
Hope it helpsHi, Minuit, thank you for your response. It seems that all of the furor over this new tax has obscured the fact that 100M colones, in Hacienda’s view, does not equal US$175K, but is perhaps closer to US$600K.
Which makes much more sense to me, given that originally 12,000 props (now revised to 10k) were expected to be subject to tax, which includes all but the smallest hotels. If the cutoff really was $175k, the number of props owing would be, afaikt, far greater.
As for valuing other improvements, after you have calculated one or more buildings using the “Construcciones Principales,” section, the tab labeled “Construcciones Adicionales” will become active. Click on this and the “TIPO” drop-down menu will now contain many other options such as PI0x for Piscinas, where value is based on cubic meters of water. In fact, PI02 includes the value of a machine house and machinery.
Minuit, if you did not use this other section to calculate your pool value, how did you determine it’s at 1.5x orig cost? Thanks again for your help with this.
Also, here are some other calculations trying to determine where the cutoff is for various sizes and ages of properties, pushing the square footage to just below 100M colones. The terms used here are straight from the software, and translations of some terms and definitions [url=http://ccobb.net/hacienda/Consuta%20de%20la%20Tipologia.html]are available here[/url]. Dollar amounts per square meter are using 575 for exchange.
[b]VC08 - high quality, 3.5 bath[/b] 2 years old, v. good: 260 mt / 2,800 ft = 99.58M ($660/mt) 8 years old, good: 280 mt / 3,000 ft = 99.7M ($619/mt) [b]VC07 - good quality, 2.5 bath[/b] 2 years old, v. good: 312 mt / 3,350 ft = 99.37M ($554/mt) 8 years old, good 340 mt / 3,650 ft = 99.56M ($509/mt)
The more input we can get on this, the better we can determine what the “reality” is, in Hacienda’s view.
I did not know we could use the Constructiones principales for more than one building.
I used the construction adicionales for the swimming pool, this is how I got the that value.
I put 60 meters since that included the cement terrasse and the building for the maquinas, maybe I should have put 75, which would be higher value. I used the PI02 option. I will try again with everything, just for funAnd FWI, 100M colones doesn’t mean 600 000$ but little under 200 000$. the math is 100 000 000.00 / 575 and not multiplied, sorry about that.
Now again my question, do we have to include all the adornments in the value at first or only if the value of the main buildings goes over 100M ?? I heard different points of view on the subject.
In any ways, my property doesn’t range for the luxury tax with or without all included, nor does it cost or worth according to the real estate value.
[quote=”Minuit”]And FWI, 100M colones doesn’t mean 600 000$ but little under 200 000$. the math is 100 000 000.00 / 575 and not multiplied, sorry about that.[/quote]
That is my point: It does not work. If homes in the $175K range valuate far below 100M colones in the software, then we need to determine what 100M equals [b]in Hacienda’s view[/b] of the value of a property, and maybe use an exchange rate of 166.
For people who’s homes are determined to be just below or above the 100M mark, if you are willing to share actual dollar values that would be tremendously helpful in figuring this out.
As for what to include in the preliminary calculation to determine whether tax is due, I’m not certain. I guess it’s time to practice my technical Spanish and see how this is described the law. I’ve only tried reading a little of it so far.
I think you are still thinking that market value or actual construction value has something to do with value for purposes of this tax.
The method is thus: Determine what type of construction your home is, usually VC06-VC09 for most expat homes. Each type of house has a per square meter value set by Hacienda. For example, a VC07 house is to be valued at 325,000 colones per square meter. Then you deduct applicable depreciation. It doesn’t matter what your actual construction cost was or your purchase price was. You just use the prescribed values for the type of home you have. And that is either a judgment call you make, or you can hire an appraiser to tell you what you have. I ended up hiring an appraiser and found that my home was a VC06.
Valuing all of the other features is the same. You use the per square meter value set forth in the manual of construction values referenced by Scott in a post several months ago. Different types of pools have different presumed per square meter costs. Different types of grass have different presumed per square meter costs.
The features of each type of home are described in all the available literature. The more complex the architecture and the more grandiose the fittings, the higher the value.
Hope this helps. We found Roger Peterson’s book very helpful.
Sorry, guess I’m not being clear. I am not concerned here with the amount of tax to pay, but at what price point, in Gringo terms of price, an owner will need to pay taxes.
This is causing uncertainty in the market, which depresses the resale value of homes. If we can determine, with reasonable accuracy, at what dollar value, again in Gringo terms of value, a home has to have in order to pay tax, that will go a long way in making people feel comfortable again.
So, I’m looking at it backward. There is no way a $175K house will need to pay tax, so 100M clearly does not mean the same to Hacienda as it does to you and me. If the minimum value, approximately, necessary to pay tax is not in the $600K range, than what is it?
I used the software and figured my house is VC07 and included a concrete pad, fencing and grass area. It came in at 93,635,425 colones. The whole classification is so subjective. It probably represents about 55% of market value.
I read another site and it stated that filing is mandatory even if your assessment is under the 100,000,000 colones mark.
Is the filing a requirement for any homeowner?
“This is causing uncertainty in the market, which depresses the resale value of homes. If we can determine, with reasonable accuracy, at what dollar value, again in Gringo terms of value, a home has to have in order to pay tax, that will go a long way in making people feel comfortable again.”
Oh, I get it. You are in the real estate biz. Every property is going to be different, so I don’t think you can generalize. A VC-09 new property will be, according to the Hacienda’s system, valued at approx $800 per square meter. A new VC-06 will be valued at approx $190. It will of course move with the exchange rate. So, do the math. With new construction its easy because there is no depreciation. With an already built house, get an appraisal so you know its value according to the Hacienda’s methodology. How many meters of VC-7, or VC-08, or VC-09 construction can one build/purchase and not reach the 100,000,000 colones mark?
IMO, the old days of undervaluing property to save at the muni are soon to be long gone, and good riddance. The declarations made at the muni will have to match those made for this tax. Its a good thing. Everyone will start to contribute fairly at the muni level. I know the funds are needed at that level. And hopefully the lux tax will also go towards its intended purpose.
Just to answer my own question about filing, I found this at:
http://dgt.hacienda.go.cr/tiposdeimpuestos/Paginas/Impuestosolidarioparaelfortalecimientodeprogramasdevivienda.aspxUnder the tax table it states:
NOTA: Los propietarios de bienes de uso habitacional cuyo valor sea igual o menor al monto de ¢100.000.000, no están obligados a presentar la declaración. Estos montos se actualizarán todos los años en el mes de diciembre, con base en la variación del índice de precios al consumidor final.Which translates to:
NOTE: Owners of residential use property whose value is equal to or less than the amount of ¢ 100,000,000, are not required to file a return. These amounts will be updated every year in December, based on the index of prices to final consumers.So, if you aren’t over the threshold, then you don’t have to file anything.
[quote=”jneiman”]Is the filing a requirement for any homeowner?[/quote]
My appraiser said no filing was required if one was under the 100,000,000 threshold. That seems to sync with what was in La Nacion on Thursday.
…Before I so rudely interrupted myself…I was going to add that my “trusted advisor” said that because we were so close to the threshold, we should file anyhow to get our value on record. Our appraisal showed that some of what we had on file at the muni level was in error and he suggested that we would eventually want both filings to contain consistent data about our property.
[quote=”jneiman”]I used the software and figured my house is VC07 and included a concrete pad, fencing and grass area. It came in at 93,635,425 colones. The whole classification is so subjective. It probably represents about 55% of market value.[/quote]
Thank you for this info! Since you so close to the cutoff point, would you be willing to share any dollar values? If not, I understand. And maybe I’m off track as others are trying to tell me, but this sure seems like an important point to me.
[quote=”jneiman”]Is the filing a requirement for any homeowner?[/quote]
As I understand it, no filing is required.
Just to be clear, I’m no more in the Real Estate business than anyone else who owns a home, I definitely support the intent of this tax, and do not under represent my property at the Muni.
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