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New solidarity tax on luxury property in Costa Rica

A new solidarity tax took effect October 1st in Costa Rica, adding a tax on luxury property. Unlike the regular property taxes which are paid at a local level, this is a tax levied by the country, a social tax to be used to provide better housing for the poor. This new graduated tax ranges from .25% to .55% and is based on the value of the improvements on the land, not the land itself.  ** This “temporary” tax for the next 10 years is estimated by the Costa Rican government to bring in $45 million/year and they estimate 40,000 people are living in inadequate housing. For the gringos who don’t like seeing substandard housing – now you’ll be doing something about it. At least they’re upfront enough to call it a Social Tax.  Read what one luxury colleague in Costa Rica has to say:

Yalile Alpizar

Questions and Answers on the tax

Since this is a tax only on the improvements, there won’t be any additional taxes on lot purchases.

**  10/20/2009.  Clarification just received: while there is no tax on vacant land in luxury locations, gated communities and resorts, for those properties with improvements, the tax covers both the improvements and the land.

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  1. Angelica Sanchez

    How will the property be designated as a luxury property?
    \Will it apply to existing or only new improvments?
    AND how will the tax be implemented and how will it be enforced?

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