There are costs associated with owning or buying a luxury property in Costa Rica. These include taxes, transfer fees, legal fees, property taxes, capital gains tax, and the luxury property tax. Explore the video explanation and notes below on luxury home tax in Costa Rica as well as the costs associated with the purchase and sale of these homes.
The cost of buying a luxury property in Costa Rica typically amounts to a percentage of the transactional value. On average, this ranges between 3% and 3.5% over the transactional value, including taxes and registry stamps. Legal fees range between 1 and 1.25% according to established rates.
Property taxes and municipal payments:
Luxury homeowners in Costa Rica must account for ongoing expenses related to property ownership. These taxes are payable on a quarterly basis to the local authority or municipality in the area where the property is situated. Alternatively, owners can choose to make a full payment for the entire year, often enjoying discounts for such advanced payments.
Capital Gains and Luxury Property tax in Costa Rica
The costs and expenses associated with selling property in Costa Rica have undergone significant changes since 2019. Therefore, when selling property, capital gains tax must be paid, except when the property being sold is the owner’s primary residence. In such cases, there is an exemption for this tax.
Furthermore, there is a specific tax known as the luxury property tax, designed specifically for residential properties. This tax applies to properties with a value exceeding approximately $220,000. The actual amount is stated in colones which fluctuates in dollars due to exchange rates. If your property falls within this value range and is used for residency purposes, you will be required to pay the luxury property tax at least once a year.
Every three years, you have the option to update the recorded value of the property through a formal appraisal. This process allows for adjustments to the tax imposition basis, considering any changes in the property’s value.
General content provided by Javier Sauma at Sauma Rossi law firm in Costa Rica.