If you’re planning to move to Costa Rica or buy property here, one tax you’ll hear about often is IVA (Impuesto al Valor Agregado), the country’s Value-Added Tax. At a standard rate of 13%, IVA applies to most goods and services, including many related to real estate, but not all. Here’s what you need to know.

• Existing properties (second-hand homes) are generally exempt from IVA: no tax on the purchase price.
• New properties from a developer or builder (first sale after construction) are subject to IVA, but only on the construction portion of the price — not the land value.
• Land-only sales are not subject to IVA.

Even if the property itself is exempt, many services you’ll use in the buying process carry IVA.

Real estate agent commissions in Costa Rica are subject to a mandatory 13% IVA (value-added tax).

• The seller bears the cost of the applicable IVA on the real estate brokerage service, while the agent or agency invoices and collects the tax, and is responsible for reporting and remitting it to the Costa Rican tax authority (Hacienda).

Other services that require IVA payment during the real estate transaction:

• Notary and legal fees
• Home inspections and appraisals
• Architectural and design services
• Property management fees

After you buy, IVA will still affect many ongoing costs, including:

• Utilities like electricity and water
• Internet, TV, and phone services
• Maintenance services such as gardening, cleaning, and pool care
• Repair and improvement work on your home

IVA isn’t limited to real estate. It’s part of day-to-day living in Costa Rica. You’ll encounter it in:

• Groceries: Basic staples like rice, beans, and fresh produce are often exempt or taxed at reduced rates; packaged and imported goods usually carry 13%.
• Dining out: Restaurants and cafés charge IVA plus a mandatory 10% service fee.
• Transportation: Taxis, rideshare apps, and domestic flights include IVA.
• Entertainment: Gym memberships, cinema tickets, tours, and other leisure activities.
• Shopping: Clothing, electronics, and most household items include IVA in the price.