Costa Rica Luxury Home
Now it's time to shed some light on this new luxury tax...
Actually, if this article was only written on the subject of this new 'luxury tax' we'd be done by now. That's because there is mass confusion on the subject. Questions like, "does it include raw land or just structure?" and "how do I file and where?". If you are expecting this article to explain these questions then you are in for a surprise.
Lawyers, real estate agencies, property managers and Costa Rica homeowners, all have differing opinions on the new tax. Some say that it does not include raw land however others say there was a last minute, unauthorized, notation made to the law that includes land.
This is what WE DO KNOW....
The luxury tax is based on homes valued at over ¢100,000,000 colones starting with .25% and going up from there to a maximum of .55% for homes exceeding the ¢1.5 billion colones mark.
The new “Solidarity Tax for the Strengthening of Housing Programs” will collect approximately $45 million a year during 10 years.
The purpose is to build affordable housing in order to help impoverished families out of the shanty towns. There are roughly 390 shanty towns and government estimates put the number of families living in inadequate housing at 40,000.
So that's what is known about the new tax/law.
In respect to capital gains taxes, once again Costa Rica did try to pass a new law to implement this tax but the vote failed so as of this day, there are still no capital gains taxes in Costa Rica.
There is a 3% Costa Rica property (http://www.costaricapropertysite.com) transfer tax. This tax is based upon the registered value placed on the property transfer deed at the time of sale.
From November 30, 1995, the law states that the administration and collection functions for property taxes to the Local Governments (Municipalidades)
Under the new law, it will be these entities’ responsibility to conduct property appraisals and collect the corresponding property tax.
The property tax is established on an annual basis and may be paid annually, by semester or by quarter depending on the procedures established by each Local Government. For the next five years, the property tax payment will be 60% of the appraised value of the property. Starting on year six, the municipality may set its own rate not to exceed 1%.
Costa Rica Property
http://www.costaricapropertysite.com
Personal and corporate income tax is beyond the scope of this article and we would also like to take this moment to explain that we do not recommend using this information for taxation purposes within Costa Rica.
We are not accountants nor do we pretend to give advice on taxation in Costa Rica. The information provided above is purely for the purpose of thought provocation and if you require advice on taxes and laws within Costa Rica, we highly suggest you seek the advice of an attorney or certified accountant from Costa Rica.
Photo:
http://www.prlog.org/
