Managing real estate in Costa Rica comes with important responsibilities that ensure legal compliance and strengthen municipal resources. The declaration and payment of Property Tax are essential steps for any property owner. In this article, we explain clearly and concisely how these obligations work and why they are crucial.
Declaration of Property Value
Anyone who owns real estate in the country is required to declare the purchase value of the property to the municipality where it is located.
When should it be done?
This declaration must be made every five years or at the time of acquiring a property.
Consequences of not declaring:
Failure to declare the property value allows the municipality to impose a fine equal to the amount not paid.
Payment of Property Tax
The Property Tax applies to land, facilities, and permanent fixed constructions. All individuals or legal entities that own real estate in Costa Rica are obligated to comply with these provisions.
The tax will be uniformly applied regardless of the property’s location. This makes the property appraisal essential, as the tax will always be 0.25% of the property’s value.
When should it be done?
This tax is paid annually, covering the period from January 1 to December 31.
How is it paid?
The law allows flexible payment options to accommodate taxpayers’ needs.
It can be paid in a lump sum, in two semi-annual installments, or in four quarterly payments. Municipalities offer incentives for those who make early payments, based on the basic passive rate of the Central Bank.
Consequences of not paying:
Municipalities can demand payment through judicial proceedings when property owners refuse to pay the tax through administrative means.
Fulfill your obligations and avoid fines
Understanding and complying with the declaration and payment of Property Tax is essential for every property owner in Costa Rica. At ERP Lawyers, we are here to advise and guide you through every step of the process. Contact us to ensure efficient, hassle-free management.
