How To Pay Luxury Tax In Costa Rica And Why Is It Important

Foreigners can easily acquire properties in Costa Rica, especially immigrants and those with residency status. But there are prime, luxury properties available for anyone, even foreigners. Luxury properties, of course, come at a cost, and one is instructed by law to pay what is due to those properties.

Everyone must pay additional taxes for properties deemed luxurious by the state. The Costa Rican government passed the 2008 law on Solidarity Tax. They used this measure to provide adequate housing to others who might need it, Costa Ricans who, one way or another, needed to be provided with the minimum standards of decent housing.

Anyone with property worth more than $220,000 must pay luxury taxes, and the law specifically mandated the amount needed. Calculations are provided, and everything is according to the property's worth and the construction and accessories made on the property. According to those calculations, the state would base the luxury tax the owner must pay.


Here is the calculation of luxury tax based on the actual price of property:


$220,000 - $520,000 = 0.25%

$520,000 - $1,046,000 = 0.30%

$1,046,000 - $1,570,000 = 0.35%

$1,570, 000 - $2, 095,000 = 0.40%

$2,095,000 - $2,615,000 = 0.45%

$2,615,000 - $3,141,000 = 0.50%

Above $3,141,000 = 0.55%


Everyone who has luxury properties, foreigners and immigrants included, must register before the Tax Administration. They need to fill out forms, such as D-179, then go to the Virtual Tax Administration site to make some updates. The details need to be updated every three years to account for changes in information or details in property value.

The tax is reasonable and fair. After all, anyone who wants to have a prime property in what is considered to be a tropical paradise in the Pacific must pay what is indeed due. Considering that it is for the benefit of Costa Rica as a whole, the luxury taxes are in no way excessive; they are, in fact, in place to help other citizens have decent housing.

The Solidarity Tax Act mandates that everything must be filed on or before January 15 every year. Tax must be paid accordingly, and failure to do so puts anyone at risk of incurring fines and penalties.

But whatever the case may be, luxury taxes, as mandated in the Solidarity Tax Act of 2008, benefits everyone. It gives the government additional funds for the Costa Ricans for their housing and other benefits. The luxury tax you pay, fair and reasonable, could indeed go a long way.