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The new luxury tax on homes was printed in “La Gaceta” in Dec. ‘08, the official newspaper for Costa Rica. The law only becomes official when it is printed in this newspaper. The version can be found by googling “ley 8683” and it should be the first hit.
Two points that have been mentioned in this forum; 1)who has to declare and 2) can you split the property to lower the total construction value are addressed in articles 6 & 7 of the law.
Article 6 a) states that those properties with less than 100,000,000.00 colones in total construction (including buildings, lawn, fences, pools, etc.) are exempt from the tax.
The last line of Art. 7 says that “only those owners of properties referred to in article 6 aforementioned, are exempt from the duty to declare.” ( my translation)
This would add substance to DavidCMurray’s lawyer’s argument that those that don’t have construction over the legal financial limit established by law 8683 don’t have to file.
Article 7 paragraph 3 addresses conjoining properties with the same owner. It states that conjoining properties shall be considered for tax purposes as one property if they have the same owner. If the route is taken to split properties to lower construction value on each property, it seems that at the least the properties would need to be separated by a fence or delineated as separate is some way. They would also need to be in different corporations or automatically would be considered one due to the fact that they’re owned by the same person/corp.
Published in November 2009 the Complete 44 Page Guide to Property Taxes and the New Luxury Home Tax in Costa Rica written by Attorney Roger Petersen is now available for only US$16.95
If you are a property owner in Costa Rica or intend to buy property in Costa Rica in the future, this digital book is a must for you!
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The book has direct links to government land valuation maps for Costa Rica, construction valuation manuals, directory of municipal governments of Costa Rica, property tax and luxury home tax filing forms and much more …..
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I just read the whole Ebook. It went through everything, answered every question I had. You have to update your property information – even if you feel your under the requirement. If you are under the requirement, it saves you from having to file additional paperwork, but you must report your construction value in line with the new system of appraisal. If your under, you don’t have to pay the additional tax and you don’t have to then calculate the value of your property and report that as well. If your over – well, then you have to calculate your property value as well and pay the Luxury Tax. Either way, you have to fill out the declaration and it has to be accurate, fines of 5 – 10X unpaid taxes can be given. Properties that are subdivided but owned by the same owner are calculated together. To get around that; perhaps having them in separate corporations could do. Just a over view of some things I learned and was wondering, that Ebook got all the details on how to file and calculate everything. I would think anyone who is still unclear about all this should read that document.. you will then be “in the know”
I agree with Costarica 1’s translation of “Ley 8683” My Spanish in not native but I do get around quite well. I don’t understand how article 6 and 7 of the law can be translated to indicate that properties of less than C100,000,000 must declare with Tributacion. I am including the parts of the law in the original Spanish that apply.
Any clarification would be greatly appreciated. Pay close attention to the last sentence in Article 7 ThanksARTÍCULO 6.- Exenciones
Estarán exentos del pago de este impuesto:
a) Los propietarios o titulares de derechos de los bienes inmuebles indicados en el artículo 2 de esta Ley, cuyo valor fiscal de la construcción, incluido el valor de las instalaciones fijas y permanentes, sea igual o inferior a cien millones de colones (¢100.000.000,00). Este valor será actualizado por el Poder Ejecutivo en diciembre de cada año, con fundamento en la variación experimentada por el índice de precios al consumidor que el INEC determine, considerando los doce (12) meses inmediatos anteriores, correspondientes al período comprendido entre el 1º de diciembre del año anterior y el 30 de noviembre del año en curso.ARTÍCULO 7.- Declaración jurada
Los sujetos pasivos deberán presentar, cada tres (3) años, a partir de la fecha de entrada en vigencia de esta Ley, dentro de los primeros quince (15) días naturales de enero del período fiscal correspondiente, una declaración jurada que actualice el valor fiscal del bien inmueble, en los medios, la forma y las condiciones que defina la Dirección General de Tributación. De resultar superior al valor registrado por la administración, el nuevo valor declarado modificará automáticamente la base imponible aplicable para el período fiscal en que se declara.
Cuando el bien inmueble objeto de este impuesto pertenezca a varios copropietarios, estos deberán declararlo en forma conjunta.
El propietario de dos o más bienes inmuebles colindantes y/o superpuestos, deberá acumularlos en una sola declaración, para los efectos de este impuesto, siempre y cuando su uso coincida con los indicados en el artículo 2 de esta Ley, y dichos bienes conformen una unidad de uso habitacional.
En el régimen de propiedad en condominio, la declaración de cada condominio deberá incluir el valor proporcional que le corresponda por las áreas comunes.
En caso de traspaso de la propiedad del bien inmueble, el nuevo propietario será responsable solidario del pago del impuesto del período fiscal vigente a la fecha de adquisición, así como de los intereses, las multas y las sanciones, correspondientes.
Únicamente los propietarios de los bienes inmuebles referidos en el artículo 6 anterior, estarán exentos del deber de declarar.Whew! This is a fine kettle of fish!
caliskatari is right, this book is very comprehensive. And very disturbing.
First, everyone who owns any property whatsoever had better read this book and follow the process. Certainly, expat owners of significant properties are going to be easy targets for the tax collectors, and the penalties for failure to file, and for failure to file accurately, are very stiff indeed.
Second, this looks for all the world like a daylong process. By the time you’ve downloaded all the forms, consulted all the online tables and manuals, collected all your ownership documents, completed all the forms, gone online to actually file the forms, etc, etc, etc, it’ll be dinnertime but the migrain headache this has induced will have killed your appetite.
If you think doing your own income taxes is a headache, you ain’t seen nothin’ yet.
The “take home” message: Get the book. Read it. Do what Sr. Peterson says. Say a prayer.
Well, I think I’ve been through the process Sr. Peterson describes in his book . . downloaded all the forms, consulted all the tables, did all the itemizations and calculations. This was the most fun I’ve had since 1993 when I had rectal surgery.
One question remains, and I’m hoping that one of the attorneys who follow this forum will respond:
When computing the value of the property for declaration purposes, [b]does the c100,000 threshhold apply to the [u]entire[/u] property (that is, the real estate plus all the improvements) or does it apply to just the improvements?[/b]
Thanks in advance.
[quote=”DavidCMurray”[*] ]
When computing the value of the property for declaration purposes, [b]does the c100,000 threshhold apply to the [u]entire[/u] property (that is, the real estate plus all the improvements) or does it apply to just the improvements?[/b]
Thanks in advance.[/quote]
It says quite clearly (In my opinion, how I understood it), that: First calculate all construction, all homes, pools, courts, ranchos, etc. If all the construction comes under C 100,000,000 – your done. No need to then declare your property value, you don’t have to pay the tax.. However IF your construction comes over the limit, THEN you have to go to the additional form and declare your property value. I guess then making the luxury tax your about to pay even higher.
So its clear, if all total construction comes under C100,000,000 = No luxury tax.
Though if your newly recorded construction value is higher then what they previously had on file for your construction value.. (and the tax you were thus previously paying) I have a feeling your property tax my go up accordingly. Not quite like the luxury tax, but I bet they would put your new property “value” on file, and may be more then it was listed as before.
After reading Sr. Peterson’s book, I do believe one will have to be a Philedelphia lawyer to fill out all these forms!:lol:
The government would be completely inundated if every single ptoperty owner made a declaration. It would seem sensible that only those over the 100 million colon threshhold would be required to make a declaration. You never know though, this is Costa Rica!!
There was an article in The Tico Times {Nov 6th edition}, written by Alonso Arroyo. His information states that properties under the threshhold do NOT have to make the declaration.
Mr. Arroyo is a graduate of the University of Costa Rica, as well he holds a master’s degree from Harvard Law School. I think he knows his stuff!
Paula
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