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I see again a post noting an immense increase in property taxes in CR. I will be back in September to look at some investment properties. Is this tax increase in the works…soon? Also, is the increase aimed at “luxury” homes, such as homes in the $500K and over category? Just beach houses? Even the recent posts regarding increased utility bills and water bills don’t give me pause – but the idea of paying higher property taxes than I do now is off-putting. Please advise.
I know nothing about “immense increases” anywhere. I do know that they are now enforcing the tax laws in a way that they should have been doing so all along … People that should have been paying a lot more in property taxes are now being forced to pay more – That’s not actually an “increase” it’s collecting what should have been collected all along…
To see more about this at: ‘Your Costa Rica Property Taxes May Increase – Silly prices no longer accepted.’ [ https://www.welovecostarica.com/members/1784.cfm ]
The “new” taxes would apply to ‘luxury’ homes and the maximum rate I believe is about 0.55% which is still very low compared to most developed nation’s property taxes.
Most of our VIP Members buy homes worth much less than $1,448,000 so their property tax rate will remain the same as before at 0.25% “if” they have registered the real value of their property …..
If they have to re-register the real value after recording a value that has been far too low then their property taxes will obviously go higher – Not because of an “increase” but because they should have been paying more before.
The New Costa Rica Property Tax Rates:
* Houses with Market Value under US$193,000 will be exempted
* Houses with Market Value from US$193,000 up to $ 1,448,000 will pay 0.25%
* Houses with Market Value from US$1,448,000 up to $ 2,413,000 will pay 0.35%
* Houses with Market Value from US$2,413,000 up to $ 3,378,500 will pay 0.45%
* Houses with Market Value more than US$3,378,500 will pay 0.55%See more about this at ‘Costa Rica’s New Property Tax Proposal – The government wants a new system.’ (September 2006) [ https://www.welovecostarica.com/members/1142.cfm ]
Scott Oliver – Founder
WeLoveCostaRica.com* Houses with Market Value under US$193,000 will be exempted
Is this true? No taxes on property valued under $193,000?
sue&chris: Dollar wise, no person can tell you what is coming exactly, because the details have not been worked as of this moment. Initially, the CR government hired a Canadian firm to develop urban development plan and regulatory plans.
To me this means, the property appraisal/valuation will be cloned after North America’s property valuation system.
Basically they want to modernized the property and catastro or land registries, and organize the country’s territory. This makes sense, as Scott mentioned, values are just not correct. The property registration system has many loop holes which could be closed by modernizing the system.
They will map the entire country which will provide municipalities with the information they need to accurately appraise land and collect taxes.
I think this is a smart move on the CR governments part. The country needs money for all the services we are demanding. It’s 2008 and we are still allowing sewage to pollute the rivers and oceans. This cannot continue and proper property valuation and tax collection systems are one solution to helping preserve the CR environment.
The tax rates mentioned in this thread by Scott will be applied to the new valuations.
Land valuation tables and the construction manual which lists the per-unit cost of materials are the two instruments used by the municipalities to assign a value on land and on constructions.
The luxury tax is not connected to this soon to be, revamped system. It’s my guess that if you put a value of $65. per square foot on your home in CR, then add the going rate per square meter for your land, which is different throughout CR, add the two and you’ll be pretty close to the appraised value.
Sprite: You pay property taxes on the appraised value of your property. If that value is under whatever the luxury tax rate is set at, you would not pay the luxury tax, but you still pay regular property taxes.
Tip: When your property in CR is first appraised under the new system, appeal it! I did this in Canada for many years and on every occasion won the appeal, both on residential property and commercial property.
In CR if you want to appeal something you have to do it fast, usually within 3 days of receiving a notice, in this case, your assessment. I’ll check in on this appeal time frame, so I can be on the muni’s door step, when the time comes.
Dear Scott (and friends): Thanks for the good info. The few articles quoting owner’s whose taxes were expected to go from under $95/yr to over $2,000/yr had me spooked! I am considering developing houses in the under $200K range, so this information is very helpful. As always, Pura Vida
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