In Costa Rica, owning a luxury home entails not only enjoying exclusive comforts but also the responsibility of contributing to the Solidarity Tax for the Strengthening of Housing Programs, commonly known as the Luxury Housing Tax. Established in 2009, this tax is part of a broader national commitment aimed at addressing extreme poverty and providing dignified housing to those in greatest need. By imposing fiscal burdens on luxury properties, the government channels resources to the Housing Mortgage Bank (Banhvi), ensuring that at least 93% of the funds go directly to the construction of homes for communities in vulnerable situations. Below, we will break down the key aspects of this tax, from its requirements to recent updates.
Requirements and Rates: For the current year, properties valued at more than ₡145,000,000.00 colones (approximately $280,000.00) fall into the luxury home category and are subject to an annual tax ranging from 0.25% to 0.55% of the calculated property value. It is crucial to note that this tax is not limited to regular, occasional, or recreational-use homes; it applies regardless of frequency of use.
Key Dates: The declaration of this tax is made every 3 years, within the first 15 natural days of the corresponding fiscal period, but the payment is an annual commitment. The deadline for payment is January 15 of the following year after the fiscal period. The declaration and payment process is facilitated through the Virtual System of the Ministry of Finance (ATV), ensuring an efficient and accessible process for taxpayers. Each obligated party needs to assess their property to determine whether it falls into the luxury home category, subject to this obligation.
Penalties: In case of non-compliance with the declaration or payment, fines established in articles 79, 80, 80 bis, and 81 of Tax Procedures Code No. 4755 will be imposed. For the omission of tax declaration submissions, a fine of 50% of the base salary (₡231,000.00) is established for passive subjects who do not submit tax declarations within the legal timeframe. In the case of delays in the payment of the tax determined by the Tax Administration, a fine of 1% per month of delay in payment or a fraction of a month elapsed since the expiration of the deadline is established. The fine will be calculated on the unpaid sum at the time and will not exceed 20% of that sum in any case.
Foreigners and Obligations: A common question is whether foreign owners of luxury homes in Costa Rica are subject to the Solidarity Tax. The answer is affirmative. All owners, regardless of nationality, are obliged to contribute annually to strengthen housing programs.
The Solidarity Tax for the Strengthening of Housing Programs in Costa Rica is a crucial tool in the fight against extreme poverty. By contributing annually, owners of luxury homes not only fulfill their tax obligations but also actively participate in building a livable future for those less fortunate. It is also important for obligated parties to understand the scope of this law to stay current with tax declarations and payments, avoiding fines and issues with the Tax Administration. At Tactic Legal Studio, we have extensive experience in this matter and can advise you in the best possible way.