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Costa Rica property taxes are straightforward with a standard 0.25% annual rate on registered property value. Higher-value homes above $282,000 pay additional luxury taxes ranging from 0.25% to 0.55% depending on construction value. Property transfer taxes add 1.5% when buying, while municipal fees and HOA costs vary by location and amenities.
Understanding these tax obligations is crucial for both investors and residents planning to buy property in Costa Rica's growing real estate market.
If you want to go deeper, you can check our pack of documents related to the real estate market in Costa Rica, based on reliable facts and data, not opinions or rumors.
Costa Rica charges 0.25% annual property tax on registered property value plus luxury tax for homes above $282,000 construction value. Property transfer tax is 1.5% of sale price when buying.
Additional costs include municipal fees ($100-$400 annually), HOA fees ($1,200-$5,000+ for gated communities), and rental income tax (10-25% for rental properties).
| Tax Type | Rate | Application |
|---|---|---|
| Standard Property Tax | 0.25% annually | All properties on registered value |
| Luxury Home Tax | 0.25% - 0.55% annually | Construction value above $282,000 |
| Property Transfer Tax | 1.5% | Sale price when buying property |
| Municipal Fees | $100-$400 annually | Garbage, lighting, community services |
| HOA Fees | $1,200-$5,000+ annually | Gated communities with amenities |
| Late Payment Penalty | 1.5% monthly | Overdue property tax payments |
| Rental Income Tax | 10-25% | Annual rental income brackets |
What is the current annual property tax rate in Costa Rica and how is it calculated?
Costa Rica charges 0.25% annual property tax on the registered value of your property.
This rate applies to the total registered value, which includes both the land and all permanent structures on the property. The tax is calculated as a percentage of the declared property value that you register with the local municipality.
As of September 2025, this 0.25% rate remains the standard across all municipalities in Costa Rica. The calculation is straightforward: take your property's registered value and multiply by 0.0025 to get your annual tax obligation.
For a $200,000 property, you would pay $500 annually in standard property tax ($200,000 x 0.0025 = $500).
How does Costa Rica determine the taxable value of your house?
Costa Rica uses a self-declaration system where property owners file detailed valuations with their local municipality every five years.
The registered value should reflect current market conditions and include both land and construction values. Municipalities are increasingly using digital valuation models that cross-reference your declaration with recent comparable sales data in your area.
Property owners must update their declared value every five years, though municipalities can adjust valuations using their digital assessment systems between these periods. The system combines self-assessment with official oversight to ensure accuracy.
For luxury tax purposes, properties undergo separate technical appraisals every three years that focus specifically on construction value and luxury amenities.
It's something we develop in our Costa Rica property pack.
How much annual property tax would you pay for different house values?
Here are the exact annual property tax amounts for common house values in Costa Rica based on the 0.25% standard rate.
| House Value | Annual Property Tax (0.25%) | Monthly Cost |
|---|---|---|
| $100,000 | $250 | $21 |
| $250,000 | $625 | $52 |
| $500,000 | $1,250 | $104 |
| $750,000 | $1,875 | $156 |
| $1,000,000 | $2,500 | $208 |
What additional municipal taxes and fees apply on top of property tax?
Costa Rican municipalities charge separate fees for local services beyond the standard 0.25% property tax.
These municipal fees typically cover garbage collection, street lighting, park maintenance, and community services. The exact amounts vary significantly by location, property size, and local amenities available.
Most property owners pay between $100 and $400 annually in municipal fees, with coastal tourist areas and upscale neighborhoods generally charging higher rates. Urban areas like San José suburbs typically charge $200-$300 annually, while rural areas may charge $100-$200.
You must contact your specific municipality directly to get precise fee schedules, as these vary considerably between different local governments across Costa Rica.
When does the luxury home tax apply and what are the rates?
Costa Rica's luxury home tax applies when your property's construction value exceeds approximately $282,000 as of September 2025.
The luxury tax uses progressive brackets based on construction value only, not total property value. This means only the buildings and luxury amenities count toward the threshold, not the land value.
The luxury tax rates increase with higher construction values, ranging from 0.25% for the lowest bracket up to 0.55% for properties with construction values exceeding $3.65 million.
Properties undergo technical appraisals every three years specifically for luxury tax calculations, separate from the regular property tax valuations.
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How much luxury tax would you pay for different property values?
Luxury tax calculations depend on construction value and apply progressive rates across different brackets.
| Construction Value | Tax Bracket | Annual Luxury Tax |
|---|---|---|
| $350,000 | 0.25% | $875 |
| $750,000 | 0.30% | $2,250 |
| $1,500,000 | 0.35% | $5,250 |
| $2,500,000 | 0.45% | $11,250 |
| $4,000,000 | 0.55% | $22,000 |
What are the typical garbage collection and community maintenance fees?
Garbage collection and community maintenance fees are charged separately from property taxes and vary by municipality and service level.
Municipal garbage collection typically costs $100-$400 annually depending on your location and the frequency of service. Tourist areas and upscale neighborhoods generally charge higher rates for more frequent collection and better service quality.
Community maintenance fees cover services like park upkeep, street cleaning, and public area maintenance. These fees range from $50-$200 annually in most municipalities.
Rural areas often have lower fees but less frequent service, while urban and coastal areas charge premium rates for daily or bi-weekly garbage collection and enhanced community services.
Some municipalities offer early payment discounts of 2-5% if you pay the full year's fees in advance during January.
How much is the property transfer tax when buying a house?
Costa Rica charges 1.5% property transfer tax on the higher of either the registered sale price or the official appraised value.
This transfer tax is paid once when you complete the property purchase and legal ownership changes hands. The tax applies to the total transaction value, including both land and structures.
For a $300,000 property purchase, you would pay $4,500 in transfer tax ($300,000 x 0.015 = $4,500). This is in addition to other closing costs like legal fees and registration expenses.
The transfer tax is typically paid by the buyer, though this can be negotiated between parties during the purchase agreement. Payment is required before the property title transfer can be completed at the National Registry.
It's something we develop in our Costa Rica property pack.
What are typical HOA fees for gated communities in Costa Rica?
Homeowner association fees in Costa Rican gated communities range from $1,200 to over $5,000 annually depending on amenities and services provided.
Basic gated communities with security guards and basic landscaping typically charge $1,200-$2,500 annually. Mid-range communities with pools, tennis courts, and enhanced landscaping charge $2,500-$4,000 annually.
Luxury communities with multiple pools, golf courses, beach clubs, spa facilities, and 24/7 concierge services can charge $5,000-$8,000 or more annually. Beachfront communities in areas like Guanacaste Province generally have the highest HOA fees.
HOA fees cover security, common area maintenance, landscaping, utilities for shared spaces, and amenity upkeep. Some communities also include services like cable TV, internet, or water in their monthly fees.
These fees are paid separately from property taxes and are collected directly by the homeowner association, not the government.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Costa Rica versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How is rental income taxed if you rent out your property?
Costa Rica taxes rental income using progressive rates starting at 10% for annual income up to approximately $9,800 (5 million colones).
Rental income above the $9,800 threshold faces higher tax rates that can reach 25% depending on total annual rental earnings. The exact brackets adjust annually based on currency exchange rates.
Short-term vacation rentals also face a 13% VAT tax on gross rental income, though some eco-friendly properties may qualify for exemptions from this additional tax.
Property owners can deduct legitimate rental-related expenses like property management fees, maintenance costs, advertising, and depreciation when calculating taxable rental income.
You must register as a rental income earner with Costa Rican tax authorities and file annual returns reporting all rental earnings from your property.
Are there tax discounts or exemptions for residents, retirees, or foreign buyers?
Costa Rica offers very limited tax exemptions for property owners, with no systematic reductions based on residency status, age, or nationality.
Some municipalities offer small early-payment discounts of 2-5% if you pay your full annual property tax bill in advance during January. This is the most common discount available to property owners.
There are no special tax exemptions for retirees, foreign buyers, or primary residence status under current Costa Rican tax law. All property owners pay the same rates regardless of citizenship or residency status.
Occasional municipal programs may offer temporary deductions for specific improvements like solar panels or accessibility modifications, but these vary by location and are not guaranteed.
The lack of exemptions means you should budget for full tax obligations regardless of your personal circumstances or how you plan to use the property.
What penalties apply for late property tax payments?
Costa Rica charges 1.5% monthly interest on overdue property tax payments, compounding each month the payment remains outstanding.
Over a full year of non-payment, penalties can reach 18% of the original tax amount, nearly doubling your tax obligation. The interest compounds monthly, so delays become increasingly expensive.
After $100 in annual property tax, a full year of delays would result in $118 total owed ($100 original + $18 penalties). For larger tax bills, the absolute penalty amounts become substantial quickly.
Prolonged non-payment can result in legal action, property liens, or eventual forced sale of the property to recover unpaid taxes and accumulated penalties.
Costa Rican municipalities actively pursue collection of delinquent property taxes, making prompt payment essential to avoid escalating costs and legal complications.
It's something we develop in our Costa Rica property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Costa Rica property taxes are relatively low compared to North American rates, but luxury properties face significant additional obligations.
Budget for 0.25% annually on property value plus potential luxury taxes, municipal fees, and HOA costs when planning your Costa Rica real estate investment.
Sources
- OSA Property Management - Tax Deductions Guide
- RE/MAX Central CR - Property Tax Guide
- OSA Property Management - Tax Deadlines
- CR Property Tax - Tax Reduction Strategies
- Exclusive Homes Costa Rica - Tax Expectations
- Flamingo Beach Realty - Luxury Tax Guide
- Nativu - Municipal Taxes
- Cordero Abogados - Luxury Tax Update
- Costa Rica Law - Luxury Home Tax
- Century 21 Ballena Properties - Buying Taxes