You just Bought a Property

You just bought a property… Now What? 

Author: Nick Halverson

Congratulations You Just Bought a Property! You are now the owner of a new home in the Costa Ballena region. Now what? 

Plan for Usage

This is typically decided before the purchase process is completed. However, you should know what the plan is for the home. Is it strictly for personal use? Will you rent it out? If more than one person is involved with the purchase, it is advisable to have a ‘usage plan agreement’. Who gets to use it, when and for how many days per year. 

Banking and Paying Bills 

Who is going to be responsible for paying your bills? The Costa Rican banking system is pretty efficient. Seriously. Properly registered property management companies have banking platforms that make paying bills very easy. Coupled with our ability to wire funds from the USA to Costa Rica in a matter of hours, paying bills is easy.

For individuals, it can be a bit more challenging. Banks have begun tightening their rules for non-residents, and paying specific 3rd party bills can be extremely difficult, complicated, or expensive (if you have to wire funds from outside Costa Rica). 

Keys to Your Castle

Who do you trust with the keys to your home? Is it someone you just met? Do they speak your native language? Be careful sharing keys – you wouldn’t give a stranger a key to your home back home – don’t do it here. 

Death and Taxes

As Benjamin Franklin once said, “Nothing is certain except death and taxes.” Although no one wants to think of these two things during the thrill of purchasing a home in Costa Rica, they are topics that should be discussed. 

In the event of one of the corporation owners’ death, the corporation will end up in probate unless a pre-existing Costa Rican trust is registered in Costa Rica; an issue advisable to be handled by a lawyer. 

You just bought your property

New vacation home rental tax for 2021. 

Starting in 2021, and in response to the hotel and lodging industry’s valid complaint about vacation rentals not paying ‘their fair share’ of taxes, there is a new vacation rental home tax. The tax is 12.75% of the gross rental cost. This tax must be registered and paid monthly to the Costa Rican Tax Authorities (Hacienda). 

Be sure you are paying those taxes, and your property manager has a solution to get those paid. 

The homeowner pays 12.75%, while the 13% IVA tax must be paid by the renter.  

 In the end, it is our recommendation to hire one of the legally operating property management companies in the area. There are only a couple of us to choose from. Please verify that your property manager is registered with the Caja, Hacienda, and the Municipality. Without those certifications, they are not legally working in Costa Rica. 

If you need help with accounting or your tax filings, please feel free to contact us: 

Don’t let your excitement and happiness of owning in the region get off to a bad start. Nick Halverson has been buying and managing properties in the region since 2005.

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