New Luxury Tax Effective Oct1’2009

[paula1]

This new tax is now in effect. Apparently the building value is calculated using a manual called “Unit Base Values by Constructive Typology”. I read somewhere that this manual is available through the Ministerio de Hacienda, however I haven’t been able to find it on their website. There are some serious penalties for non compliance. Has anyone found this manual or any more detailed information regarding this new tax?

Thanks
Paula

[Andrew]

Did you see ‘Costa Rica Property Taxes – The new tax on luxury homes finally approved.’ in the Taxes in Costa Rica section at [ https://www.welovecostarica.com/members/1981.cfm ]?

I will ask Randall where we can find this manual …

Scott Oliver – Founder
WeLoveCostaRica.com

[Andrew]

Randall Zamora, our Costa Rica tax expert has just confirmed that the “Unit Base Values by Constructive Typology” has NOT yet been published.

Scott Oliver – Founder
WeLoveCostaRica.com

[eckert]

Thank you for the heads up. We have been waiting for the guidelines “Unit Base Values by Constructive Typology”. My concern is that the New Law is in effect and yet most of what is to guide the New Law has not been finish.

[2bncr]

Typical… Ha! Welcome to Costa Rica!

[enduro]

Just seen this little ditty on “Inside Costarica” news site…

Quote:
12.000 Homes Owners Affected by Luxury Tax

It is estimated that 12.000 homes owners of luxury homes will be affected with the new tax on luxury homes which has to be paid within the next three months.

The law that went into effect on October 1 and will be in place for the next ten years, affects all home owners with homes valued at ¢100 million colones and more.

The tax on those properties will be between 0.25% and 0.55% of their value.

The ministerio de Hacienda (Finance ministry) has said that home owners will have until January 15, 2010 to pay their taxes.

The added tax is destined for social housing programs.
end quote.

[costarica1]

according to the new law 8683, Ministerio de Hacienda has to produce the manual 45 days before Jan 1.

[Andrew]

The 146 page SPANISH “Manual De Valores Base Unitarios Por Tipologia Constructiva” must be used to determine the value of your property for property tax purposes.

VIP Members can download this .pdf file from the Download Library at:

[ https://www.welovecostarica.com/members/programs/opendownloads.cfm ]

We will have a translated version of the home section available in the near future.

Supposedly this is the insider “appraisers’ version which is to be used because they will not have time to come up with the ‘new’ consumer friendly version ..

Scott Oliver – Founder
WeLoveCostaRica.com

[gary savage]

I have read on this site that value is only based on the building, not the land, however in today’s AMCR they seem to be also including land. They even have an article on some new formula to calculate land value. Have things changed?

My second question is, and maybe it is a stupid one, let’s say you have a property, has a house (value 175K) and two cabinas (value 40K each), is each building valued separately, in regards to the luxury tax? If not, what if the house is on one piece of titled property and the two cabinas are on an adjust, separately titled property, both in your name (but separate)? Does in make a difference if one is in your name, one in your wife’s or say different corporations?

Thanks for any insight
Gar

[karlins]

[quote=”paula1″]This new tax is now in effect. Apparently the building value is calculated using a manual called “Unit Base Values by Constructive Typology”. I read somewhere that this manual is available through the Ministerio de Hacienda, however I haven’t been able to find it on their website. There are some serious penalties for non compliance. Has anyone found this manual or any more detailed information regarding this new tax?

Thanks
Paula

[/quote]

Does anyone know where to pay this tax?

[costaricafinca]

[quote=”Gary Savage”]My second question is, and maybe it is a stupid one, let’s say you have a property, has a house (value 175K) and two cabinas (value 40K each), is each building valued separately, in regards to the luxury tax? If not, what if the house is on one piece of titled property and the two cabinas are on an adjust, separately titled property, both in your name (but separate)? Does in make a difference if one is in your name, one in your wife’s or say different corporations?

Thanks for any insight
Gar

[/quote]
Has anyone any more info on this, for both Gary and others who may in the same position?

[orcas0606]

For those of you who read Spanish,”El Financiero” has a very good article on the new luxury home tax and also a question and answer section that should clear up a lot of questions.
http://www.elfinancierocr.com or http://www.elfinancierocr.com/accesolibre/2009/noviembre/15/flash_legales/img/743legales.pdf Enjoy

My most urgent question is, do I have to file if my house and living areas are worth less than the $172K?

[DavidCMurray]

We had this conversation with our attorney yesterday. She has a copy of the law, which she consulted, and she concluded that if your property is not subject to the tax then you do not need to file any paperwork whatsoever. We have a couple of purportedly authoritative documents that support our assertion that our property is not subject to the tax. Our attorney suggested that we safeguard them and have them ready to share should the taxing authorities challenge our failure to file.

[caliskatari]

David: Thats a interesting way to go about it. However do you really think admitting and sharing your plan to not file and to use “purportedly authoritative documents” on a public message board will help your attempt?

I read the document Scott posted. They break the homes down into their respective types of construction. I found my homes fall into the Construction type 10.1.1.1.6 , This should be a very common for many homeowners. Its a home constructed with block walls, concrete columns and beams. Gypsum, or wood tounge and groove ceilings, tile floors, metal roof covered with plastic, mud or metal tiles. A Master bathroom, very nice bathroom features, aluminum windows, 2 car garage, etc.

They give this type of construction a “value” of C270,000.00 per Meter.

So my two homes, a 2 story 220 sqm home is valued at = C59,400,000 and my 110 sqm guest home with the same finishes would be C29.700,000. So they would total under C90 Million colones.. 10 millon colones under the legal minimum.

I was able to do this myself by locating the type of construction, and using its registered value, and multiplied that by the square meter size of my home. I think MANY homes in Costa Rica will fall under the Construction type 10.1.1.1.6 and its value of C270,000 per meter.

[caliskatari]

Also it appears the value is appointed to all constructions on a said “Property”, or lot. There may be a way to get around this law by subdivision of a property in two or three parts. Each separated part would then be a separate, registered lot and construction would be totaled on each lot and not on the property as a whole. I am not sure on the legal aspects of this but it sounds very possible. Subdivide you property into parts that equal less then C100,000,000 on each part – possible?

Also it states that it includes all investment and constructions – even improved roads, parking spaces, Rancho’s, Pools, basketball and tennis courts, rock/block walls, etc – value must be included. NOT just Homes. This can really add up on a property.

[Author]

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