One of the most important aspects to consider when buying a vacation home in Costa Rica is tax payments.

Ideally the details and information regarding tax payments for the property you are buying should be provided by the property developer or seller prior to the completion of the purchase; consulting a real estate attorney or tax expert is recommended in order to get a clear picture of the exact amount that will have to be paid on a yearly basis.

Property taxes will be calculated as a 0.25% over the value of the property as it is shows in the public registry.
The county’s local government (Municipality) is the entity in charge of collecting the property taxes. A quick visit to the municipality with the information under which the property is registered should be enough to get you the detail on how much the property tax will be.

Property taxes can be paid a year in advance or can be paid by trimester. The information on the value of the property will need to be updated every 5 years through the municipality,using an official form the owner will need to fill out and a sworn statement; if the owner fails to present this form, the municipality will make an automatic update as per their inspections.

It is important that as a property owner in Costa Rica you stay on top of the payments, some municipalities are more efficient than others in informing and reminding owners about deadlines for the payments.

If the vacation home is considered as a “luxury home” per its value, another tax is applicable on top of the regular property tax, this is known as “impuesto solidario”. This tax applies to properties valued on more than ₡126.000.000 (approximately USD $221,000.00); this amount is adjusted every year by the Ministerio de Hacienda (Treasury and Revenue Collection Agency) based on different economic aspects.

The value of the property must be electronically certified every three years before January 15th and this value remains valid for the following three years. The value includes the construction and the land. The tax is then calculated according to different brackets, the minimum is 0.25% and the maximum is 0.55% for properties which value exceeds 3.3 million USD.

Failure to make the payments on time will result on high fines.

Consider these important aspects before you close the deal on a vacation home in Costa Rica, if you are buying property as an investment and you are only spending a few weeks a year in the country you might want to buy a house within a residential project, through a reliable developer that preferably offers property management services so that they can assist you in handling tax payments.

There are also luxury vacation homes in Costa Rica at very affordable prices, which will help keep your tax payments manageable.

Keep track and records of all the tax payments you have done in the event they are requested by the Municipality or Hacienda.