Luxury Tax on Houses
The Costa Rica Government introduced Luxury Tax on Houses valued at more than 100 million colons in 2008. The Government has said that it would use the tax money specifically to remove shanty towns from the country. The tax is also known as the 'Ley Impuesto Solidario Para el Fortalecimiento de Programas de Vivienda' or 'Solidarity Tax For the Strengthening of Housing Programs'. The Luxury Tax on Houses is paid in addition to the other existing property taxes.
The Law Firm of Meléndez & Bonilla is experts at the Costa Rica legal system and could advise you on every aspect of the Luxury Tax on Houses. We understand the entire tax system and how its actual working. We would be able to help you identify the tax breaks that would work best for your individual case.
Luxury Tax on Houses is based on the market value of the house. It is not calculated on the basis of the land on which the house is constructed. The tax on residences that are valued between 100 million colons ($180,800) and 750 million colons ($1,356,000) is charged at 0.25 percent of the market value. The tax on residences valued from 750 million colons ($1,356,000) to 1.25 billion colons ($2,260,000) is 0.35 percent. Similarly, the tax on residences estimated at more than 1.25 billion colons ($2,260,000) but less than 1.75 billion colons ($3,164,000) is 0.45 percent. The tax on all houses valued at more than that is 0.55 percent.
The tax also covers condominiums. Each home would be assessed separately for the valuation and tax bracket. The common area used for recreational purposes would be factored accordingly. The Costa Rica Government expects property owners to asses the tax and declare it on their own. Of course, inspection does take to cross-check whether the right amount of tax has been paid. The Luxury Tax on Houses is calculated on an annual basis and is due for payment every first of January each year.
The team of experts at our Law Firm of Meléndez & Bonilla known exactly how to calculate the right amount of tax for your house, what documentations are to be processed, and what tax breaks could help you. The Property Tax on Houses normally affects individuals of high-net worth.
What most people fail to understand is that the tax is due only on the structure that is constructed on a plot. Therefore, most people actually do not fall in the category that is required to pay Luxury Tax on Houses.
The Law Firm of Meléndez & Bonilla have years of experience in handling all tax-related legal work in Costa Rica. The country's taxation system is unique and requires an in-depth understanding of the local laws. There are several constructive ways to reduce your tax liability. We have a team of professionals who would you meet your business, and investment goals more efficiently not just for Luxury Tax on Houses, but also for all your taxation needs. We could save you thousands of dollars with legitimate tax breaks.
Call us today, and you won't be disappointed.