The yearly property Tax in Costa Rica is only 0.25 percent of the registered value of the property. This is remarkably lower than most North American countries and one of the benefits of buying real estate in Costa Rica.
Annual payments are most common, but it is also possible to make biannual or quarterly payments. If you are able pay the yearly fee in advance you can take advantage of the prepayment discount which is normal offered by the local government.
Capital Gain Tax
Along with the low property taxes, there is no capital gains tax in Costa Rica. This is another factor that makes real estate investment a viable opportunity for foreign investors and retirees alike.
Costa Rica is attractive to foreign investment and there has been a vast increase over the past decade. The stable government and the financial policies have helped to boost the local economy. The real estate tax law sallow for any investor, whether local or foreign to make gains through buying and selling real estate.
Transfer tax
There is a standard tax of 1.5% of the value of the property when selling real estate in Costa Rica. In addition, there are stamps that need to accompany the final title deed, which is an additional 1% of the recorded real estate value.
This tax can be avoided when the property is purchased in a corporation. Your real estate lawyer can help advice you in this matter. Contact us for help finding a reputable real estate lawyer here in Costa Rica.
Real Estate Sales tax
At closing, a real estate sales tax, equaling approximately 1% of the value of the property, is also charged. Normally this tax is charged as part of the closing cost and split evenly between the buyer and seller. For more information on closing cost click here.