Solidarity Tax over Luxury Homes in Costa Rica – The Luxury Tax or Impuesto a las Casas de Lujo

By: Quatro Legal

What is the Solidarity Tax?

The “Solidarity Tax for the Strengthening of Housing Programs”, known as “Solidarity Tax” or “Tax over Luxury Homes”, was enacted in 2008 by Act 8683, and is an annual tax, that must be paid every year on January 15th at the latest.

This tax is applicable to the value of residential properties, that are used habitually, occasionally or recreationally.

The purpose of this tax is to finance worthy housing options for the population living in extreme poverty.

Who must pay the Solidarity Tax?

Taxpayers of this tax are all residential properties owners (including apartments and condominiums), such as concessionaires, permit holders and occupants of the shoreline area or any other real estate granted by the State or its institutions who own a house with a value over ¢133.000.000,00 (about US$220,000.00).

How is the Solidarity Tax calculated? 

To calculate the Solidarity Tax, taxpayers must know the value of the main construction and its accessories (ranches, pools, sports field, walls, internal streets, etc.). Taxpayers must add the value of the construction and the value of the land.   The sums of these two values will end up being the total value of the property.

What are the rates of the Solidarity Tax?

These are the rates for 2021:

Amounts over ¢133.000.000,00 and up to ¢335.000.000,00        0.25%
Amounts over ¢335.000.000,00 and up to ¢672.000.000,00                                            0.30%
Amounts over ¢672.000.000,00 and up to ¢1.008.000.000,00  0.35%
Amounts over ¢1.008.000.000,00 and up to ¢1.345.000.000,00   0.40%
Amounts over ¢1.345.000.000,00 and up to ¢1.679.000.000,00  0.45%
Amounts over ¢1.679.000.000,00 and up to ¢2.017.000.000,00                0.50%
Amounts over ¢2.017.000.000,00            0.55%

What are the tax obligations for the taxpayers of the Solidarity Tax?

Enroll in the “Registro Único Tributario”. Taxpayers must enroll before the Tax Administrationby filing form D-179 know as “Formulario Único de Inscripción, Declaración y Pago Impuesto Solidario para el Fortalecimiento de Programas de Vivienda, Ley 8683”.

Declare and pay the tax. Taxpayers must prepare the tax declaration using the D-179 form and file it through the Virtual Tax Administration Site (ATV). Form D-179 must be filed every three years to update the property value, no later than January 15th of each year. Payment of this tax must be done annually through the banks that provide online payment service or directly through authorized collecting entities.

What are the penalties for non-payment of the Solidarity Tax?

Law 8683 establishes that taxpayers who fail to comply with Solidarity Tax obligations, may be subject to penalties such as fines and interest payments.

QUATRO LEGAL offers the Solidarity Tax payment service to clients who own of luxury homes (as defined by the law). The service includes property appraisals through technical assessment, enrollment before the Tax Administration, calculating and preparing tax forms, contingency assessment due to non-payment of previous periods and calculation of sanctions, fines and interests.

Got questions? We have answers. Feel free to contact our attorney Lic. Gonzalo Rojas, partner of Quatro Legal, at grb@quatro.legal or call 4350-0501.

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