Authored by the expert who managed and guided the team behind the Costa Rica Property Pack
Everything you need to know before buying real estate is included in our Costa Rica Property Pack
Property taxes in Costa Rica in 2025 involve three main categories: municipal property tax at 0.25% of assessed value, luxury home tax ranging from 0.25% to 0.55% for properties above $275,000, and corporate fees if you own through a corporation.
As of September 2025, the Costa Rican property tax system operates on a dual structure where municipalities collect standard property taxes while the national government handles luxury property taxes for high-value properties. The municipal property tax rate remains fixed at 0.25% of the assessed property value, while the luxury tax applies progressive rates from 0.25% to 0.55% for construction values exceeding ₡150 million (approximately $275,000). Property owners also face additional municipal service fees, typically around $200 annually for garbage collection, and those owning through corporations must pay annual corporate fees ranging from $150 to $300 depending on company status.
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's 2025 property tax structure includes a 0.25% municipal tax on all properties and a progressive luxury tax of 0.25-0.55% on construction values above $275,000.
Property owners can expect to pay between $375 annually for a $150,000 property and over $5,000 for million-dollar properties when combining municipal and luxury taxes.
| Tax Type | Rate/Threshold | Collection Authority | Payment Schedule |
|---|---|---|---|
| Municipal Property Tax | 0.25% of assessed value | Local Municipality | Quarterly (Mar/Jun/Sep/Dec) |
| Luxury Home Tax | 0.25-0.55% above $275,000 | Ministry of Finance | Annual (Due Jan 15) |
| Corporate Fee | $150-$300 per year | National Registry | Annual (Due Jan 31) |
| Municipal Services | ~$200 per year | Local Municipality | With property tax |
| Late Payment Penalty | 1-1.5% per month | Respective Authority | Monthly on overdue amounts |
What types of property taxes apply in Costa Rica in 2025 and who collects them?
Costa Rica operates three distinct property tax systems in 2025, each managed by different government entities.
The municipal property tax (Impuesto sobre Bienes Inmuebles) applies to all properties at a flat rate of 0.25% of the assessed value and is collected by the local municipality where your property is located. This tax forms the backbone of local government funding across Costa Rica's 82 municipalities.
The luxury home tax (Impuesto Solidario para el Fortalecimiento de Programas de Vivienda) targets high-value residential properties with construction values exceeding ₡150 million (approximately $275,000). The Ministry of Finance collects this progressive tax, which ranges from 0.25% to 0.55% depending on property value brackets.
Corporate-owned properties trigger additional annual corporation fees ranging from $150 for inactive companies to $300 for active corporations, collected by the National Registry. These fees apply regardless of property value and represent ongoing compliance costs for corporate ownership structures.
It's something we develop in our Costa Rica property pack.
What is the exact municipal property tax rate in 2025 and how is it calculated?
The municipal property tax rate in Costa Rica remains fixed at 0.25% of the property's assessed value for 2025.
The calculation follows a straightforward formula: Annual Tax = Assessed Value × 0.0025. For example, a property assessed at $200,000 would generate an annual municipal tax of $500 ($200,000 × 0.0025). This rate applies uniformly across all 82 municipalities in Costa Rica, ensuring consistency regardless of location.
Property assessments undergo mandatory review every five years or whenever a property changes ownership. Municipalities use standardized valuation methods that consider location, construction quality, property size, and local market conditions. The assessed value typically reflects current market conditions but may lag behind rapid price increases in popular areas like Guanacaste or Central Valley.
Property owners can choose between annual payment (typically offering early payment discounts) or quarterly installments due on March 31, June 30, September 30, and December 31. Most municipalities provide online payment platforms and accept bank transfers to streamline the collection process.
What is the luxury home tax threshold and rate structure for 2025?
The luxury home tax threshold for 2025 remains at ₡150 million (approximately $275,000) based on construction value, not including land value.
The tax applies progressive rates across seven value brackets, starting at 0.25% for the lowest tier and reaching 0.55% for properties exceeding ₡2.19 billion (approximately $3.7 million). Properties valued between ₡150-364 million pay 0.25%, while those in the ₡364-730 million range face 0.30% rates.
Higher value brackets include 0.35% for properties worth ₡730 million to ₡1.095 billion, 0.40% for ₡1.095-1.462 billion, 0.45% for ₡1.462-1.824 billion, 0.50% for ₡1.824-2.191 billion, and the maximum 0.55% rate for properties exceeding ₡2.191 billion.
The progressive calculation means property owners pay the specified rate only on the portion of value within each bracket, similar to income tax brackets. A property worth $1 million would pay 0.25% on the first $606,700 and 0.30% on the remaining $393,300, resulting in a blended effective rate below the highest applicable bracket rate.
How is property value determined for tax purposes in 2025?
Property valuations for tax purposes in Costa Rica follow different methodologies depending on the tax type and responsible authority.
Municipal assessors determine values for standard property tax using comparative market analysis, considering factors like location, construction quality, property age, and local infrastructure. These assessments occur every five years minimum, though municipalities can conduct interim reviews for significant market changes or property improvements.
The Ministry of Finance handles luxury tax valuations using official construction cost manuals that standardize values based on materials, finishing quality, and construction complexity. This system focuses specifically on construction value rather than total property value, excluding land costs from luxury tax calculations.
Property sales trigger automatic reassessment requirements, with the new assessed value typically matching or approaching the sale price if it exceeds the previous assessment. Owners can challenge assessments within 15 days of notification, first through the municipal valuation office, then through municipal appeals processes, and finally through the Administrative Tax Court if necessary.
Professional appraisals and third-party valuations can support appeals, particularly when owners believe assessments exceed fair market value or fail to account for property-specific factors affecting marketability.
How much tax would someone pay in 2025 for properties worth $150,000, $500,000, and $1,000,000?
| Property Value | Municipal Tax (0.25%) | Luxury Tax | Total Annual Tax |
|---|---|---|---|
| $150,000 | $375 | $0 (below threshold) | $375 |
| $500,000 | $1,250 | $1,250 (0.25% rate) | $2,500 |
| $1,000,000 | $2,500 | $2,697 (progressive rates) | $5,197 |
Don't lose money on your property in Costa Rica
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What are the payment due dates for each property tax type in 2025?
Costa Rica's property tax payment schedule varies by tax type, with different authorities setting their own deadlines.
Municipal property taxes offer flexible payment options with quarterly deadlines on March 31, June 30, September 30, and December 31. Property owners can also choose annual payment, typically due by March 31, often with early payment discounts for January payments.
The luxury home tax operates on an annual schedule with payments due January 15 each year. This earlier deadline reflects the national government's preference for front-loaded revenue collection and requires property owners to calculate and submit luxury tax payments independently.
Corporate annual fees follow a January 31 deadline for companies owning real estate. These fees apply to both active and inactive corporations, with different rates based on company status and compliance history.
Municipal service fees, including garbage collection and other local services, typically align with property tax payment schedules, allowing property owners to consolidate their local tax obligations into single transactions.
Are there early payment discounts available in 2025?
Many Costa Rican municipalities offer early payment discounts ranging from 5% to 10% for property owners who pay their annual municipal tax by January 31.
The specific discount percentage and qualification requirements vary by municipality, with some offering tiered discounts based on payment timing. Properties in popular expat areas like Guanacaste Province often feature more generous discount programs to encourage early compliance and improve municipal cash flow.
Luxury tax payments generally do not qualify for early payment discounts since the January 15 deadline already represents the standard payment period. However, property owners who maintain current accounts and avoid penalties may benefit from streamlined processing and reduced administrative scrutiny.
Corporate fees typically follow fixed payment schedules without discount options, though companies maintaining good standing with the National Registry may qualify for reduced fees in specific circumstances related to compliance history and business activity levels.
Property owners should contact their local municipality directly to confirm available discount programs, as these benefits often require specific application procedures or documentation to qualify for reduced rates.
What penalties apply for late property tax payments in 2025?
Costa Rica imposes significant penalties for late property tax payments, with interest charges ranging from 1% to 1.5% per month on overdue amounts.
Municipal property tax penalties compound monthly, meaning a $1,000 tax bill could grow to $1,150-$1,180 after just one month of delay. These penalties continue accumulating until full payment occurs, potentially doubling or tripling tax obligations for severely delinquent accounts.
Luxury tax late payments face similar penalty structures administered by the Ministry of Finance, with additional compliance complications for repeat offenders. Properties with chronic luxury tax delinquency may face increased scrutiny for future assessments and valuations.
Municipal governments can place liens on properties with persistent tax delinquency, potentially blocking future sales or refinancing transactions. In extreme cases, municipalities may initiate legal proceedings to recover unpaid taxes, though this typically occurs only after multiple years of non-payment.
Property owners facing temporary financial difficulties should contact their municipality immediately to discuss payment plans or temporary deferrals, as many local governments prefer negotiated solutions over penalty enforcement and legal action.
What exemptions and reductions are available in 2025?
Costa Rica provides several property tax exemptions and reductions for qualifying property owners in 2025.
The primary exemption covers properties valued below 45 base salaries (approximately $41,600), providing complete municipal property tax relief for modest-value homes. This exemption particularly benefits Costa Rican families and retirees with limited-value properties in rural areas or older urban neighborhoods.
Senior citizens aged 65 and older with legal residency status can access the Ciudadano de Oro (Golden Citizen) program, which provides various municipal service discounts and administrative fee reductions, though not direct property tax relief. These benefits often include reduced garbage collection fees and utility connection discounts.
Agricultural properties actively used for farming or conservation purposes may qualify for partial or complete property tax exemptions, depending on municipal policies and land use verification. Qualifying criteria typically require demonstrated agricultural activity, proper permits, and compliance with environmental regulations.
Religious institutions, educational facilities, and government properties maintain traditional exemptions from both municipal and luxury taxes. Private properties used for charitable purposes or community benefit may qualify for reduced rates subject to municipal approval and ongoing compliance verification.
It's something we develop in our Costa Rica property pack.
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.
What additional taxes apply to corporate-owned properties in 2025?
Properties owned through Costa Rican corporations face additional annual fees beyond standard property taxes, regardless of property value or usage.
Active corporations pay approximately $300 annually to the National Registry, while inactive companies face reduced fees of around $150 per year. These fees represent ongoing compliance costs for maintaining corporate legal status and property ownership rights.
Corporate property owners must also file annual tax returns and transparency reports, even when corporations exist solely for real estate ownership. Failure to maintain these filings can result in additional penalties and potential corporate dissolution proceedings.
Foreign-owned corporations may face additional reporting requirements related to beneficial ownership disclosure and anti-money laundering compliance. These requirements particularly affect corporations owned by non-resident individuals or other foreign entities.
Corporate property ownership can provide benefits including simplified estate planning, potential tax planning opportunities, and enhanced privacy, but these advantages must be weighed against ongoing compliance costs and administrative complexity compared to direct individual ownership.
What municipal service fees apply to property owners in 2025?
Costa Rican property owners face various municipal service fees beyond basic property taxes, with garbage collection representing the largest additional cost.
- Garbage collection fees typically cost around $200 annually, though amounts vary significantly between municipalities based on service frequency and local waste management infrastructure
- Fire protection fees range from $50-150 annually depending on property location and municipal fire department coverage areas
- Street lighting assessments may apply in areas with recent infrastructure improvements, typically costing $25-75 annually
- Sidewalk and road maintenance fees occasionally appear as special assessments for properties benefiting from specific infrastructure projects
- Municipal administrative fees for building permits, occupancy certificates, and other property-related services typically range from $25-200 per transaction
These fees usually appear on the same bill as municipal property taxes, allowing property owners to pay all local obligations simultaneously. Some municipalities offer slight discounts for property owners who pay all fees annually rather than quarterly.
Property owners in gated communities or private developments may face additional homeowners association fees separate from municipal charges, though these represent private contractual obligations rather than government taxes.
How can property owners verify and contest their assessed value in 2025?
Property owners can verify their assessed value through multiple channels and have clear procedures for contesting valuations they believe are excessive.
Annual assessment notices from municipalities provide the primary source for current property valuations, though many municipalities now offer online portals where property owners can check assessed values year-round using property identification numbers or owner names.
Property owners have 15 days from receiving assessment notices to file formal challenges with the municipal valuation office. This initial appeal requires written documentation explaining why the assessment appears incorrect, often supported by professional appraisals or comparable property evidence.
Unsuccessful municipal appeals can advance to higher levels, including municipal appeal boards and eventually the Administrative Tax Court for final resolution. Each appeal level requires specific documentation and may involve legal representation for complex cases.
Professional appraisers and real estate attorneys specializing in tax law can provide valuable support for assessment challenges, particularly for high-value properties where significant tax savings justify professional fees. Many successful appeals focus on technical errors, outdated comparable sales, or failure to account for property-specific limitations affecting market value.
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.
Understanding Costa Rica's property tax system is crucial for anyone considering real estate investment in this Central American nation, as the combination of municipal and luxury taxes can significantly impact your overall investment returns.
As of September 2025, the tax structure remains relatively stable and predictable, with clear guidelines for payment schedules, exemptions, and appeal procedures that provide transparency for both residents and foreign investors.
Sources
- RE/MAX Central Costa Rica - Property Taxes Guide
- Costa Rica Property Tax - Tax Reduction Guide
- OSA Property Management - Tax Deductions Guide
- TLS Costa Rica - Luxury Home Tax Guide
- Flamingo Beach Realty - Luxury Property Tax Guide
- Rentas Pura Vida - Property Tax Understanding
- Costa Rica Law - Luxury Home Tax Explanation
- OSA Property Management - Tax Deadlines Calendar
- Cordero Abogados - Corporate Compliance Guide
- GAP Costa Rica - Property Tax Overview