When selling a luxury home in Costa Rica, it’s important to understand how capital gains tax works. A capital gain occurs when you sell an asset for more than you paid for it. In Costa Rica, most capital gains are taxed at 15%, including those from real estate transactions.

Here’s everything you need to know about capital gains tax when selling a luxury home in Costa Rica.

The capital gains tax in Costa Rica applies to the sale of houses, apartments, land, offices, and other types of real estate, as long as the property isn’t your main residence. If you sell your primary residence, this tax doesn’t apply. This means the seller is not liable for capital gains tax when selling their house so long as it is their primary place of residence.  For luxury homes, this tax is significant given the higher property values; however, capital gains tax is a percentage amount so it is proportionally equal regardless of actual value.

Capital gains tax occurs when the property is transferred, either through a direct sale of the actual title of the land or home, or an indirect sale such as through the transfer of shares of the company (corporation, LLC, etc) that owns the property.

Read more about luxury home taxes and property taxes in Costa Rica with this video post.

If it’s the first sale of the property after July 1, 2019, when the law came into effect, you have two options:

1. Pay 15% on the capital gain, calculated as the difference between the purchase price and the sale price.
2. Pay 2.25% on the total sale price.

For subsequent sales, only the first option is available to calculate the capital gains tax owed for the sale of the property.

For properties held within a financial investment fund, the capital gains tax is 20%.

Non-resident owners selling property in Costa Rica are also subject to capital gains tax.  According to Costa Rica law, in the cases of a non-resident seller, the buyer must withhold taxes owed.  This would be the. 2.25% of the sale price to ensure the tax is paid, or depending on the circumstances as explained previously, the tax can be calculated as 15% on the profit from the sale if it’s not the first sale after July 1, 2019.

The declaration and payment of the capital gains tax must be done using form D-162, “Declaración de ganancias y pérdidas de capital.” This form is available on the Ministry of Finance’s ATV portal and must be completed in Spanish. If you have any questions, just ask your The Agency Costa Rica luxury real estate specialist or financial advisor.

Selling a luxury home in Costa Rica can be complex, especially when navigating capital gains taxes. For personalized assistance and expert advice, contact The Agency to help you understand your tax obligations and ensure a smooth transaction for the sale or purchase of your property.