Understanding Property Taxes and the “Luxury Tax” in Costa Rica
by PuraVidaRentals on 
Costa Rica has a straightforward property tax system, but foreign buyers and investors should also be aware of an additional tax known as the “Luxury Home Tax” or “Impuesto Solidario.” This article provides an overview of both taxes to help homeowners comply with their financial obligations.
Regular Property Tax (Impuesto sobre Bienes Inmuebles)
Property tax in Costa Rica is relatively low compared to many other countries. The key points include:
- The tax rate is 0.25% of the registered property value.
- It is assessed by the local municipality where the property is located.
- Property owners can pay this tax annually or quarterly.
- The registered property value should be updated every five years to reflect market changes.
- Non-payment can result in penalties and interest charges.
Luxury Home Tax (Impuesto Solidario para el Fortalecimiento de Programas de Vivienda)
The “Luxury Tax” is an additional tax levied on high-value residential properties. This tax was introduced to help fund social housing programs. Here’s what you need to know:
- Threshold for 2025: Homes with a taxable value exceeding ₡145,000,000 (approx. $273,000 USD) are subject to this tax.
- Applies to residential properties only (not commercial or agricultural properties).
- The taxable value is determined by both the land value and the construction value based on criteria set by the Costa Rican Tax Authority.
- The tax is progressive, meaning the higher the property value, the higher the tax rate.
Luxury Tax Rates for 2025:
| Property Value (CRC) | Rate (%) |
|---|---|
| Up to 364,000,000 | 0.25% |
| 364,000,001 – 730,000,000 | 0.30% |
| 730,000,001 – 1,095,000,000 | 0.35% |
| 1,095,000,001 – 1,462,000,000 | 0.40% |
| 1,462,000,001 – 1,824,000,000 | 0.45% |
| 1,824,000,001 – 2,191,000,000 | 0.50% |
| Over 2,191,000,000 | 0.55% |
- The tax is calculated progressively, meaning different portions of the home’s value are taxed at different rates.
- Homeowners must declare the property value every three years.
- The tax must be paid to the Ministry of Finance by January 15th each year.
- Failure to pay can result in fines and legal actions.
How to Calculate and Pay These Taxes
- Property Tax: Visit your local municipality office or website to verify your property value and payment options.
- Luxury Tax: Use the valuation guidelines provided by the Ministry of Finance (Hacienda) or hire an appraiser to determine if your home qualifies.
- Payment: Property tax is paid directly to the municipality, while the luxury tax is paid to the Costa Rican Tax Authority (Ministerio de Hacienda).
Conclusion
Understanding Costa Rica’s tax obligations ensures a smooth ownership experience and helps avoid penalties. Whether you own a standard home or a luxury estate, keeping up with property and luxury tax payments is essential for compliance.
