Luxury Tax 

Luxury Tax, officially know as the Impuesto Solidario. The purpose of this tax in Costa Rica is to build homes for people living in poverty.

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You are obligated to pay this tax depending on the value of your property, which includes the house and other additions such as, swimming pools, walls, pathways, sports fields or courts, etc.

 

The threshold at which the tax kicks in applies only to these types of structures and improvements, not to the land itself.

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However, if you do meet the threshold with the previously mentioned structures, you must then add the value of the land and pay the tax based on the entire amount.

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The Tax Rate rises every year. For 2023, that threshold was 145,000,000 colones (about $281,000). So if your home (not the land underneath it) is worth less than this, you don’t have to pay Luxury Tax. But if the home is worth more than this, you have to add the value of the land to the value of the home and other structures, and then pay the tax based on the total value.

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The tax ranges between 0.25 and 0.55%, again depending on the value of the home. Payment must be made by Jan. 15th each year, or penalties will be imposed.

 

To determine that value, the Costa Rican government expects homeowners to have their homes assessed by a lawyer.