Estimated Reading Time: 3 Minutes
I gave my last update on the Costa Rica Luxury Home tax in January this year as a reminder to you all that this annual tax always has to be paid on January 15th.
Let’s see what happens with the money that is paid by those who own a luxury home in Costa Rica by government standards.
The Costa Rican government has not been very clear about who has to pay and who does not. And more importantly, who should you hire to do the appraisal on your Costa Rica real estate.
Read my blogs and you will understand more about the Luxury Home Tax. But that is not what I wanted to tell you today.
Do you own a Luxury Home?
The Costarican tax department expected between 3,000 and 4,000 taxpayers to fill out and pay their Costa Rica luxury home tax in January 2013.
The Costa Rica Luxury Home tax is also called the solidarity tax and is mandatory for those who own a Luxury home valued on 1 January 2023 to exceed₡148,000,000.00.
Families leaving the slums
In January this year, more than 1,000 families left the slums thanks to the Luxury Home Tax. The housing department built an apartment building, Los Olivos, in Hatillo San Jose, for 120 families. Because of this, they could eradicate the slums called “25 de Julio” and “Aguanta Filo”.
Now they have to get used to living in a condominium. They have to live by the bylaws like anyone living in a condominium. Not easy when you come from the slums.
Aware of this, the residents of condominium Los Olivos promised to keep the property in good condition, to improve it, and to live in harmony. They cannot sell their apartment for 10 years.
Housing for 1,007 families
BANHVI, the private bank in charge of low-income housing, claims to have built housing for 1,007 total.
According to the Ministry of Housing, they raised about 8,500 million colones in the last three years without taking into account the payments of 2013; however, the income on the Luxury Home Tax is not what has been expected.
What is the Luxury Home Tax for?
The Costa Rica Luxury Home Tax was created as of October 1, 2009. This was done through law No. 8683, “Ley del impuesto solidario para el fortalecimiento de programas de vivienda“. The objective of the law is the financing housing for the population in extreme poverty. This tax is not deductible for purposes of income tax.
The tax declaration must be submitted every three years from the effective date of the Act, updating the value of the property, an obligation which must be fulfilled on or before January 15, so that by 2013, all taxpayers must file their return with the new value of the property tax. The tax payment must be made each year, during the first days fifteen days of January.
If you don’t know if you should pay the Luxury Home Tax or not, ask your American European Real Estate affiliate agent.
Well-known Costa Rica real estate attorney Roger Petersen has made a great YouTube video on the Costa Rica Luxury Home Tax that you should see: