Why Costa Rica Real Estate?
Ocean Front Real Estate
Taxes
Owners of Costa Rican real estate are obligated by law to pay an annual property tax to the local municipal authority as a percentage of the total value assigned to the lot. Every five years the property is reassessed and valued again. While Costa Rican law requires this assessment, the responsibility lies with the property owner for accomplishing this task.
Costa Rica property taxes are due annually and are 0.25% of the total taxable value of the property. Because this figure is so low, Costa Rican real estate is often bought as a pure investment given that the fee to hold it is so low.
The property owner uses two valuation parameters to obtain the taxable value of the real estate. The valuation table (Plano de Valores) is the first one and the second one is Building Characteristics (Tipologia Constructiva). The Technical Standardization Department of the Tax Office guides these two areas.
The valuation table is a matrix that aids in the calculation of the taxable value as a product of size, more specifically value per square meter. This is based on the region where the real estate sits, the special or unique characteristics of the land and infrastructure. Such factors can include but are not limited to: land use zonage (residential, commercial or industrial), services available (sewage, telephone, electricity, hot water), corner or middle lot, ocean view, mountain view, beachfront and other topographical features.
The official government news release "La Gaceta" contains all of the zoning information that is held in the Technical Norms Department of the Tax Office.
The building characteristics category measures the value of a structure using the materials used, design and depreciation. Throughout Costa Rica, the building characteristics measurement is constant for tax purposes. While the square meter value of the land varies on location, given a specific structure, its value will be the same.
Combining both assessments yields the taxable value of a property. A brief description of the land and is calculated value are presented to the Administrative Tax Department. If it looks outrageously low, they will send a representative out to make an adjustment. Often times their assessment will be punitively high so it is best to be reasonable with the estimates you submit.