Every three years, homeowners in Costa Rica must perform a luxury home tax evaluation to determine if their property—whether a house, condominium unit, or apartment—is subject to the Luxury Home Tax.

The tax rates range from 0.25% to 0.55% of the property’s value, which is determined by the evaluation performed specifically for the Luxury Home Tax. The Luxury Home Tax, established by Law 8683, currently applies to houses valued at approximately US$285,000 (¢145,000,000.00 colones) or more. Please note that this threshold may vary based on the parameters set by the Tax Administration for 2025, 2026, and 2027. The updated parameters will not be published until the first week of January 2025, which means there is a small margin to do the appraisal and make payment before January 15. You will need to consider the following steps:

1. Approve the Property Appraisal: An appraisal will determine whether your property qualifies for the Luxury Home Tax. This should be conducted by qualified professionals and is required every three years. 

Note: If you have a recent appraisal from 2022, it can be used for evaluation under the new parameters, providing you with some flexibility in the process.

2. Consider the Following Factors:

An appraisal is necessary if you recently constructed a house or purchased a house built in 2024. 

– If your house was previously subject to the Luxury Home Tax, it will likely apply again for the new period. 

– If, according to the new parameters set by the Tax Administration for this year, your house no longer qualifies for this tax, you must proceed to unregister from this declaration.

3. Tax Declaration: Based on the appraisal results and the new values established by the Tax Administration for 2025, you must submit a tax declaration form known as D-179.

4. Tax Payment: To avoid interest and penalties, payment must be made by January 15, 2025.

Please be advised that the 2025 Luxury Home Tax must be paid by January 15th, 2025. The tax declaration, along with the property valuation, must be filed by that date.

If you consider that your home is not subject to this tax due to its new appraisal value, you will be forced to request a separate process to deregister as taxpayer for this tax.

Please feel free to reach out to us if you need more information on this subject or if you wish to retain our services to assist you with the 2025 Luxury Home Tax declaration. Ask for details regarding our fees for this process.

Note:  The purpose of the present publication is to provide general information on the updates for Real Estate regulations in Costa Rica and it is not intended to be legal advice as such. In case more specific information is required regarding these topics, please Cordero & Cordero Abogados at info@corderoabogados.com or visit our web page at www.corderoabogados.com

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