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Closing Fees & Taxes
PROPERTY TITLE Foreigners can own land in Costa Rica without restriction or prejudice of any kind. CAPITAL GAINS TAXES Do not exist at present. NOTE: On all tax issues stated herein Costa Rica Property Sales recommends that a person consult with local authorities as tax regulations can change periodically  PROPERTY TAXES
are 0.25% of the assessed value (by law the contract sale amount) of
the property. In the past the common practice was to register
fictitious values and these values were normally very low as each owner
was responsible for registering the value of his/her property. His own
assessor shall we say. This was a customary practice but this practice
is not recommended. The letter of the law is the contract amount is
the new value of the property and must be the value recorded and the
transfer taxes that correspond be paid based on this contract value.
The traditional practice of registering fictitious values is still
practiced but not recommended for the following reasons.It is tax fraud according to the letter of the law If you ever had a legal situation involving your property the value in the registry would be the value amount recognized . While there are no capital gains at this time it is inevitable that they will become part of the tax system as Costa Rica modernizes and modifies tax codes. Wouldnt it be a shame to have a fictitious value and have to pay a capital gains tax on enormous profits because of the fictitious value you recorded when you bought your property? Obey the law and sleep well! NOTE: Taxes are already incredibly low related to your property, like the annual property tax so why nickel and dime the country and put yourself at risk of any repercussions as a result improper land value recordation of your deed. GENERAL INCOME TAXES The maximum tax rate for a salaried employee is 19% and the corporate and private individual tax ceiling is 30%. PROPERTY SALES CLOSING NOTARY FEES are 1.5% of the sales price, normally shared equally by both buyer and seller, however as with any term to be agreed to contractually, this can be a point of negotiation. This amount can also be reduced on a case by case basis with your respective attorney to 1.25% PROPERTY TRANSFER TAXESApproximately 3% and paid to your attorney at closing. Normally it is expected that the buyer pay this tax however this circumstance can vary a point of negotiation. In any case expect that the buyer will pay this 3% transfer tax PROPERTY OWNERSHIP REGISTRATION is very modern and secure. The system centralized through a national registry house of record and is public information. CONSTRUCTION ZONING RESTRICTIONS are extremely rare and almost non-existent. As Costa Rica develops and modernizes it's development planning practices as a whole, new zoning regulations are becoming part of development and more and more prevalent and part of development planning and permiting in popular developing areas. We recommend verifying whether zoning exists in the area of interest. Costa Rica Property Sales can provide you with the expertise and guidance in this regard. REAL ESTATE BROKERS Real Estate is an unregulated business in Costa Rica. Brokers are not required to have a license. There is a highly recognized governing body however, which is called the CCCBR (Costa Rican Chamber of Real Estate brokers). This institution is working with the Costa Rican government to pass legislation to prohibit non accredited brokers from practicing real estate in this country and having formal licensing in order to help regulate the industry and enforce ethics. Some brokers are accredited and recognized through licensing by this institution, the majority of which are Costa Rican Nationals. Some foreign brokers qualify and are recognized licensed brokers, by this institution but many are not. Costa Rica Property Sales is recognized and licensed. |
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