Costa Rica property tax
Costa Rica property tax or impuesto sobre Los Bienes Inmuebles is calculated over the registered value of your property in the municipality where the property is located. The percentage of the annual property tax is 0,25%, as regulated by Law 7509.
Costa Rica property tax runs from the 1st of January until the 31st of December of each year. You can pay the property tax quarterly.
In most municipalities, you can request the annual amount in January and pay the whole year. Some will even give you a small discount for the annual payment. They are not all the same, with the same rules, regulations, and services. That is because they are independent from the central government.
In Costa Rica, you will not get a notice from the government that your property tax is due like you do in many other countries. You have the obligation to know when to pay.
How much to pay
Call your municipality to find out how much you have to pay, or go in person. Ask for el departamento de Bienes Inmuebles. They will need to know in which name the property is (personal or corporate) or the folio real number (property number). Few Municipalities have the option to find the information on their website.
Where to pay
The Costa Rica property tax can be paid at the cashier in the municipal building or deposited in their account in the Banco de Costa Rica. If you have an account in the Banco de Costa Rica or any other Costa Rican bank, you can pay by SINPE online.
If you do so, I recommend requesting confirmation by email from the municipal tax department that they have received your deposit and credited to your account. Some municipalities will do this in a heartbeat, others won’t do it.
This confirmation can take, depending on the municipality up to several months. It is therefore important to keep the deposit and insist on the confirmation; otherwise, your money might end up in nowhere land.
Declare the value of your property
By law, every property owner is obliged to declare the value of their property to the Municipality where the property is located, every 5 years. Your municipality has a declaration form for you. In some cases you can download the declaration form from the municipal website. Some municipalities won’t allow you to pay the Costa Rica property tax until you update the value of your property.
If your property is in a condominium, you have a good reason to ask your condo administration to appraise the units for everyone. This way you’re all reporting the same property value.
If the Costa Rica property owner does not declare the property value every 5 years, the municipality has the power to re-appraise the property for you. Then they can fine you for non-presentation of the declaration. The appraisal expires in 5 years. The owner can only modify the current value if:
1. The deed transfers the title of the property at a higher value
2. If there is a mortgage or a so called a cédula hipotecaria (title protection). In the case of various mortgages, you have to add the total of the mortgages.
3. Rectification of the size of the property or unification of several properties.
4. If the municipality decides to re-appraise the property for some reason
5. Segregation of the property
6. A remodel of the property, as long as it is more than 20% of the total value of the property
How to appraise the value of your property
This is how the map looks like and you can easily find your property on those maps.
Click on photo for PDF file of Escazu land values
In my case, I looked up my property on the Escazu map, as shown above. There, I found that my property is located in 102-03-U07 (Laureles). The map shows that the value is ¢140,000/m2. My property measures 746m2 x ¢140,000 = ¢104,440,000 for just the land.
Construction value differs, depending on the quality of the materials used. Also, you can safely use a construction value anywhere between $700 – $1,500/m2 for the construction and deduct 2% per year for depreciation. You can also use the construction manual used for the Luxury Home Tax for that. You can download here, unfortunately, it is in Spanish.
Apart from your property tax, the municipality charges municipal services. You need to be careful here. Because in some municipalities when you request to pay for your property taxes or impuesto sobre los bienes inmuebles. When they give you the amount pending, they might not include the municipal services. You might not find out until years later and will have to pay all the fines.
Municipal services include public Street lights, cleaning of all public roads, garbage collection, maintenance of parks and green áreas of your community as well as municipal pólice in some communities.
Save your receipts
Many municipalities in Costa Rica are messy even though they are computerized. Therefore, I recommend you keep all your receipts as proof. Or, even better, request a certification that your property taxes AND municipal services are up to date.
Recently, the municipality of San José charged the new owner of a condo that we sold him, 30 years of unpaid property taxes. It turned out the owner before last didn’t pay and the property was sold. But we always request a certification of taxes being up to date before closing. So the municipality could not charge those unpaid taxes to the new owner.
Our company does not offer these services anymore. You should try to find a property manager who takes care of all your obligations for you.
I hope this article was helpful in answering all your questions about Costa Rica property tax.
Don’t hesitate to contact us when you are in the market to purchase, sell or rent Costa Rica property, we appreciate your business.
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I DO want to remind our readers that we appreciate any referrals you can send us. Please remember the GoDutch Realty agents when you talk about your home in Costa Rica, we appreciate it.