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Taxes of Costa Rica – What You Need to Know

As a real property and/or corporation owner in Costa Rica, you should be aware of the various taxes that need to be paid annually.  Failure to pay them would generate penalties and lead to a collection process.

To own property as an expat, you are generally required to set up  a company to facilitate ownership, although it is possible to personally own property in Costa Rica. In any case, obtaining appropriate legal advice is essential to ensure that all the required filings are done correctly.  The good news is that you can obtain solid legal advice at reasonable rates.

 

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Costa Rica’s amazing beaches are one its top attractions.

Once you have navigated the murky waters of the actual property purchase and have successfully obtained title to your own residence in Costa Rica, you then need to be aware of myriad taxes you may owe on an annual basis.  Costa Rican taxes are numerous and varied, and are generally comparable to what you are probably used to in your home country.  There are a couple of unique exceptions of course… the good news though is that the actual dollar amounts levied as property tax in this beautiful land are not that expensive at all.

 

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Retire in Costa Rica and live like a king! Maybe leave the old car at home though. Just sayin’…

Some of the types of taxes you may encounter while living in Costa Rica:

  1. Annual Corporation Fees – Generally a token amount for property owners that only use their corporation as a mechanism to hold real property.
  2. Property Tax & Garbage Fees – Property tax in Costa Rica is only 0.25% of the purchase price or assessed value.
  3.  Solidarity Tax for the Strengthening of Housing Programmes, also know as the “Luxury Tax”.
  4. Rental Income Tax – Absentee property owners who rent their property are required to pay a 15% tax on 85% of their rental income.
  5. Value Added Tax (VAT), also known as the “IVA” – this is a flat tax of 13% on all transactions.
  6. Marchamo, or Circulation / Road Tax – Based on the value of your vehicle.

So if you are already living here or thinking about moving to Costa Rica, we hope you will find the following collection of articles useful as you explore the rules and subtleties of each of the taxes you might encounter:

 

Costa Rica Property Taxes & Garbage Fees
Costa Rica Property Taxes & Garbage Fees
When it comes to Costa Rica property taxes, for once the news is good: They are much lower than in the United States or Canada. And for once, the r...
Aug 21, 2020 , 0
‘Factura Electrónica’ in Costa Rica: All about Digital Invoicing
‘Factura Electrónica’ in Costa Rica: All about Digital Inv...
If you go into a Subway sandwich shop in Costa Rica, you’ll be asked a lot of questions: What kind of bread would you like? What kind of meat? Chee...
Aug 21, 2020 , 0
Costa Rica Corporate Taxes
Costa Rica Corporate Taxes
Probably the great majority of foreigners living in Costa Rica never had to worry about corporate taxes in their home countries. But in Costa Rica,...
Aug 18, 2020 , 0
Costa Rica Shareholder Declaration
Costa Rica Shareholder Declaration
Costa Rica has been on a tear lately passing new tax laws, and though they won’t make your life any easier, ignoring them can make your life much m...
Aug 21, 2020 , 0
Costa Rica Rental Income Taxes
Costa Rica Rental Income Taxes
Costa Rica’s recent overhaul of its tax laws contains one important provision that affects anyone who benefits from rental income, including proper...
Aug 21, 2020 , 0
Luxury Taxes in Costa Rica
Luxury Taxes in Costa Rica
Costa Rica has made many recent changes in its complicated tax laws. One of these is a luxury tax on high-value homes, established in 2009 and offi...
Aug 26, 2020 , 0
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    Taxes of Costa Rica - What You Need to Know As a real property and/or corporation owner in Costa Rica, you should be aware of the various taxes that need to be paid annually.  Failure to pay them would generate penalties and lead to a collection process. To own property as an expat, you are generall