Why Costa Rica Real Estate?
Investment Security
Low Tax Rate
The Costa Rica tax code strongly facilitates foreign purchasing on several levels. The first and most direct level is the extremely low annual property taxes. Property taxes range from 0.25% to 1.5% per year as based on the declared value of the property. Typically the rate is closer to 0.25%. This declared value is a common law practice in which a property's value, according to the government, is very low and is almost always lower than the sales price. Often two or three times lower.
For those who earn their money outside of Costa Rica or have retirement or fixed incomes based outside of Costa Rica, none of that money is taxable under Costa Rica law.
Transfer taxes are also low and non-inhibiting factors in real estate transactions. The rate was 3% based upon the registered value placed on the property transfer deed at the time of the sale, this rate was cut to 1.5% back in 1998 which is where it stands today.
HOW TO AVOID THE TRANSFER FEE: Incorporating in Costa Rica costs roughly $500. When a property is tied to a corporation and the corporation is sold, THERE IS NO TRANSFER FEE! This is common practice and a good broker will walk you through this process. The only thing to look out for is to make sure that there are no liens or encumbrances associated with the corporation being purchased.