Updated December, 2015
This page is informational only and is not meant to be considered tax advice nor has its accuracy been verified. Consult an attorney or accountant for information specific to your situation.
The taxes mentioned herein are those that relate to the ownership of unconstructed and constructed properties in Costa Rica and their operation as either a short or long term rental.
[symple_heading style=”” title=”Property Taxes” type=”h1″ font_size=”” text_align=”left” margin_top=”30″ margin_bottom=”30″ color=”blue” icon_left=”” icon_right=””]
Property taxes are based on the last recorded transfer value or last assessment and are due annually during the first quarter of each year. The rate is .25% of the value of the property. In the Tamarindo area, these taxes are paid to the county (Canton) in Santa Cruz.
[symple_heading style=”” title=”Luxury Taxes” type=”h1″ font_size=”” text_align=”left” margin_top=”30″ margin_bottom=”30″ color=”blue” icon_left=”” icon_right=””]
Only applicable to constructed residential properties, the Luxury Tax (Impuesto Solidario) is an additional tax on “luxury” homes and condos, not hotels or other commercial properties. The luxury tax is applied with a reconstruction cost-based appraisal that can be conducted by an engineer. Market value is not a factor. Factors are size of construction, quality of construction, age of construction, size of associated land and other cost based factors. The luxury tax is owed by properties whose appraisal based on cost of construction is over ~$220,000US. This tax is paid to the Ministerio de Hacienda, which is the national tax authority on an annual basis by the end of each calendar year.
[symple_heading style=”” title=”Corporate Taxes (Flat)” type=”h1″ font_size=”” text_align=”left” margin_top=”30″ margin_bottom=”30″ color=”blue” icon_left=”” icon_right=””]
Most properties in Costa Rica, especially if owned by foreigners, are owned by a corporation: Sociedad Anonima (C Corp) or Sociedad Responsibilidad Limitada (LLC). These entities must pay a one time, annual fee just for existing (Impuesto Sobre Personas Juridicas). The fee is roughly $200/year for inactive corporations and $400/year for active corporations. This fee is paid to the Ministerio de Hacienda by the end of each calendar year. Note: This tax has been suspended due to being unconstitutional for 2016. The country is in a wait and see with regards to whether this tax will come back.
[symple_heading style=”” title=”Corporate Income Taxes” type=”h1″ font_size=”” text_align=”left” margin_top=”30″ margin_bottom=”30″ color=”blue” icon_left=”” icon_right=””]
A property that is rented short or long term and is owned by a corporation is an active business and must file and pay corporate income taxes annually (Impuesto Sobre La Renta). The fiscal year for this type of activity runs from October 1st through September 30th. The tax on profits must be paid by December 15th for the previous fiscal year. The lowest tax bracket is 10% and the highest is 30%.
[symple_heading style=”” title=”Sales Tax (sometimes referred to as VAT)” type=”h1″ font_size=”” text_align=”left” margin_top=”30″ margin_bottom=”30″ color=”blue” icon_left=”” icon_right=””]
Properties that engage in short term rentals are viewed as competition for hotels in Costa Rica, and thus must register, collect and pay sales tax on tenant payments (Impuesto Sobre La Venta). The rate is 13%. Taxes are collected monthly with the declaration and payment is due to the Ministerio de Hacienda by the 15th for the previous month. Properties that only engage in long term rentals (leases) do not need to register or pay sales tax.
[symple_heading style=”” title=”Resources – Legal” type=”h1″ font_size=”” text_align=”left” margin_top=”30″ margin_bottom=”30″ color=”blue” icon_left=”” icon_right=””]
For legal advice regarding properties in Costa Rica, consider Attorney Juan Manual Aguilar Viquez. Juan has over a decade of experience in real estate transactions, finance, and corporate law in Costa Rica. Advice Legal Studio, Via Lindora Corporate Center, 3rd Floor, Santa Ana, San Jose. Phone: (506) 2205-4191
[symple_button url=”mailto:juanm@als.cr” color=”orange” size=”default” border_radius=”3px” target=”self” rel=”” icon_left=”” icon_right=””]Contact Juan[/symple_button]