- This topic has 1 reply, 2 voices, and was last updated 18 years, 1 month ago by
.
-
Posts
-
Reading in today’s (22/09/2006) Tico Times page 12, it is stated that the government is preparing to reappraise all properties in Costa Rica. For those of you who don’t have access to the Tico Times, I will post the text here.
By Blake Schmidt
Tico Times Staff
As the government prepares for a longoverdue
nationwide assessment of property
values, a lack of municipal resources
promises to gum up the process, officials
say.
Municipal impotence, combined with a
proposed law that would give the government
power to fine property owners who
declare values below their assessed value,
have the real estate industry reeling.
Municipalities assign very general values.
They don’t go out to the properties to
assess them & they valuate them from
their desks, said Emilia Piza, president of
the Costa Rican Chamber of Real Estate
Agents.
Marietta Montero, director of the
Technical Norms Organ of the Finance
Ministry, said municipalities not only lack
human resources to go out and assess property
values, but the information they rely on
is riddled with errors. They base tax rates on
that flawed information.
They don’t have qualified engineers &
and they bring in errors from the public registry.
They are using legal information of a
property instead of the physical information
(to assess value) Montero told The Tico
Times.
Montero said that the Finance Ministry
hopes to begin a new process of assessing
property values as soon as November, a
process that could be finished by the end of
2007, she said, adding that approximately
70% of properties in the country have not
been appraised in nearly a decade.
She explained the government is in the
process of contracting a Canadian company
for a $1.4 million project to assess the real
estate market in Costa Rica. The company
which has yet to be named will be responsible
for general assessment in which it redefines
pricing zones and establishes price values
in those zones. Then, Montero
explained, it will be up to the municipalities
to send appraisers out to each property in
those zones and do individual property
assessments.
But very few (municipalities) go out
and do a good valuation, she said, adding
that a law passed in 1997 put the responsibility
of individual assessments in the hands
of municipalities.
Vladimir Pérez, civil engineer for the
Municipality of Golfito in southwest Costa
Rica, said the municipality has barely
assessed a third of the properties in the canton.
We need to have the resources required
to do the job, he said. Nearly a quarter of all
municipalities, including Golfito, don’t even
have an office of property valuation as
required by the law.
Every five years, property owners are
expected to declare the value of their property.
However, municipalities have the power
to conduct an expert appraisal and levy property taxes based on that result.
The current property tax is 0.25%
(¢2,500) per million colones per year (25
cents per $100).
A proposal in Congress, which is part of the Arias administration’s nine-part fiscal
reform plan, will tax luxury properties valued
at more than ¢100 million ($193,000),
with a 0.25% additional annual tax on the
value exceeding ¢100 million. The revenue
would be put toward eliminating Costa
Rica’s sprawling shantytowns.
Under the new tax proposal, the
Finance Ministry would also be given the
power to fine property owners who declare
values below the assessed values, a measure
that has enraged many real estate owners.
The whole world will try to get a lower
value on their house, said property owner
Arturo Lizano, who is also the former president
of the Union of Private-Sector Chambers
and Associations (UCCAEP), which
represents 41 private business chambers.
Lizano called the luxury tax a slap in
the face to the middle class, adding that
with skyrocketing real estate prices, ¢100
million is no longer a luxury home. In a
few years, it will just be a middle-class
home, he said.
Montero said property owners have the
right to challenge the assessed value assigned
to their property.
She said a property owner can complain
at the municipal level with the municipal
office of valuations or to the Municipal
Council.
At the national level, she said property
owners can complain before the Administrative
Fiscal Court or the Contentious
Administrative Court.Can someone explain to me how Mr.Randall Zamorra (latest newsletter of WLCR) arrived to the conclusion that .25%(new tax rate) of the difference between a house valued at $225,000 minus $193,000(exemption) is $800.00 and that a $20,000 swimming pool added to the same property would increase the tax liability to $1,300 or an additional $500/year?
According to my calculations the tax liability should be $80.00 if the property is exempted of the first $193,000 (225,000 – 193,000 x .0025 = $80.00). Even if no exemption was taken into consideration the tax liability for a $225,000 residence at a .25% rate should be $562.50/year
- You must be logged in to reply to this topic.
