Luxury home tax reform project


The Ministry of Finance expects a prompt legislative discussion of the bill that reforms the solidarity tax to strengthen housing programs (ISO), popularly known as the luxury home tax. The general intention of the draft Law of Tax on Luxury Real Estate for Housing, Occasional and Recreational Use (22,382) is to increase tax collection through a rate increase and the use of the value of the land to define what a home is "deluxe."

The idea is to allow more active participation in Taxation. This direction would define the tax and collect it each year, as is already the vehicle property tax (the label). Then it would have to control those who do not pay.

The project and the changes

Currently, the tax is charged on those homes with a construction value greater than ¢ 133 million. This value is not fixed and updated every year, using the variation experienced by the consumer price index (CPI) as a reference until November. If the construction value exceeds that limit, the land value is added, and the tax is calculated.

With the reform, the tax would be charged on all those homes with a value greater than 325 base salaries (¢ 150 million in 2021), not only based on their construction value but also on their land. This change could increase the number of people who pay the tax since the value of the land would increase the chances that the home will exceed the minimum barrier to become a "luxury home."


In addition to this change, the primary tool to stop tax avoidance promoted by the Treasury is that the tax would no longer be declared by each taxpayer but defined by the General Tax Directorate (DGT) itself. To do this, it would use the information available in the National Registry and the municipalities.

Another change that would promote the reform and increase collection is an increase in the tax rate. Currently, the lien has a staggered rate of between 0.25% and 0.55% on the property's value that does not exceed 0.25% up to ¢ 335 million (in the lowest step of seven). With the change, a flat rate of 0.5% would apply for all properties that exceed ¢150 million.

The possibility of using municipal data or the National Registry takes control away from taxpayers to determine the actual value of their properties. The inclusion of the value of the land in the calculation to define a luxury home leaves room for uncertainty in the case of capital gains. For tax purposes, the depreciation of a property is about 50 years, 2% per year, and is only for the construction. The value of the lot will always go up.

For example: if a current construction and land value are ¢ 253 million, it will go from paying ¢ 634,000 per year to ¢ 1.27 million per year. The reform project is currently in the consultation stage with institutions and has not yet received legislative hearings. There is a deadline until October 6 for the preparation of a first subcommittee report on it.



Ojochal. If there is a town along Costa Ballena that genuinely deserves to be called a tranquil spot, it is Ojochal. I If you seek quiet and calm, you will find it here. Thats the […]

Continue reading
the impact of nature on human health

The impact of Nature on Human Health

The impact of Nature on Human Health Author: Manuela Siegfried, Certified Forest Therapy Facilitator in Costa Rica. I was born in Costa Rica, daughter of an adventurous biologist who taught me from a very young […]

Continue reading
Uvita’s Great Culinary Diversity

Uvita’s Great Culinary Diversity

Uvita’s Great Culinary Diversity Author: Louisa Bayer Uvita offers more than beautiful beaches, green nature, and great species diversity. The diversity of wildlife and plants is just as significant as its culinary offer. Almost on […]

Continue reading


HOW TO HEAL YOUR HEART-BODY-MIND AUTHOR: Karolina Magdalena The beauty of Costa Ballena makes it a stunning place to visit or live. The surrounding ocean, rivers, waterfalls, even trees, and the sounds of animals offer […]

Continue reading
Sierpe mangroves 1

Sierpe mangroves

The mangrove forest and its massive maze and the intertwining of trees and roots is considered to be a critical component acting to subdue tidal surge, reduce erosion, provide opportunities for recreation and serve as nurseries for fisheries.

Continue reading

What to do, Where to eat and Where to stay…

South Pacific Costa Rica Beaches

Looking for business directories, maps or other printouts? We’ve got that too!

Dare to Discover and Enjoy…

Check out…

Need help planning your next trip to Costa Rica? We look forward to help you!

Phone: +(506) 8946 7134 or +(506) 8914 1568

Posted in Architects & Construction, Architects & Construction, Consumer Tips, Consumer Tips, Discover South Pacific, finances, Interior Design, Services, Services and tagged , , .