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Understanding property taxes in San José, Costa Rica is essential before making any real estate investment decision.
As of September 2025, San José operates under Costa Rica's national property tax system with specific municipal additions that directly impact your annual carrying costs. The tax structure combines national rates with local assessments, creating a layered system that requires careful analysis for accurate budgeting.
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San José property taxes in 2025 combine a 0.25% national rate with municipal surcharges ranging from 0.15% to 0.35%, creating effective rates between 0.40% and 0.60% of assessed value.
For a $1,000,000 property, annual taxes typically range from $4,000 to $6,000, with additional fees for municipal services and special assessments potentially adding $500 to $1,500 annually.
| Tax Component | Rate/Amount | Annual Cost ($1M Property) |
|---|---|---|
| National Property Tax | 0.25% | $2,500 |
| Municipal Tax (San José) | 0.15% - 0.35% | $1,500 - $3,500 |
| Luxury Property Surcharge (>$200k) | 0.55% total rate | $5,500 |
| Municipal Services Fee | $300 - $800/year | $300 - $800 |
| Transfer Tax (one-time) | 1.5% | $15,000 |
| Property Registration | $200 - $500 | $200 - $500 |
| Total Annual (typical) | 0.45% - 0.65% | $4,500 - $6,500 |
Which San José does this apply to, and what government levels collect property taxes?
This guide covers San José, Costa Rica, the capital city located in San José Province.
Property tax collection in San José involves three distinct government levels that each impose separate charges on your property. The national government of Costa Rica collects the base property tax at 0.25% of assessed value, while the Municipality of San José adds its own municipal tax ranging from 0.15% to 0.35% depending on property value and location.
Additionally, the San José Province government may impose special assessments for infrastructure projects, though these are less common and typically temporary. Unlike some countries, Costa Rica does not have separate school district taxes, as education funding comes from national government sources.
The Municipality of San José also collects various service fees separately from property taxes, including garbage collection, street lighting, and parks maintenance, which can add $300 to $800 annually to your total property-related expenses.
What is the exact base property tax rate for 2025?
The base national property tax rate in Costa Rica for 2025 remains at exactly 0.25% of the property's assessed value.
This rate has been stable since the property tax reform implemented in 2020 and applies uniformly across all properties in Costa Rica, including San José. The 0.25% rate is calculated annually based on your property's fiscal value as determined by the National Tax Administration (Administración Tributaria).
However, this base rate represents only the starting point for your total tax obligation. The Municipality of San José adds its own municipal property tax on top of this base rate, creating combined rates that typically range from 0.40% to 0.60% of assessed value for most residential properties in the city.
As of September 2025, there are no announced changes to this base rate structure, and the Costa Rican government has indicated stability in property tax rates through 2026.
How is assessed value calculated and converted into your tax bill?
Property assessed value in San José is determined by the Costa Rican Tax Administration using a fiscal valuation system that considers construction costs, land value, and market conditions.
The calculation process begins with the Tax Administration's assessment of your land value based on location, accessibility, and local market data, typically updated every three to five years. Construction value is calculated using standardized cost per square meter rates that vary by building quality, materials, and age, with depreciation applied for older structures.
Your annual tax bill follows this formula: Total Annual Tax = (Assessed Value × 0.25% National Rate) + (Assessed Value × Municipal Rate) + Fixed Municipal Fees. The municipal rate in San José ranges from 0.15% for lower-value properties to 0.35% for higher-value properties, with luxury properties over $200,000 facing the highest combined rates.
The Tax Administration typically assesses properties at 70% to 85% of market value, though this can vary significantly by neighborhood and property type. Properties are reassessed when sold, significantly renovated, or as part of periodic municipal revaluations that occur every 5-7 years in San José.
What would be the annual tax on a $1,000,000 property?
A property valued at $1,000,000 in San José would generate an annual tax bill between $4,500 and $6,500, depending on the specific municipal rate applied and any luxury property surcharges.
Using the standard calculation: National tax would be $1,000,000 × 0.25% = $2,500, while municipal tax would range from $1,500 (at 0.15%) to $3,500 (at 0.35%). Properties over $200,000 in assessed value face additional luxury property taxes, potentially increasing the municipal portion to 0.55%, resulting in $5,500 in municipal taxes alone.
Additional municipal service fees would add approximately $500 to $800 annually, covering garbage collection, street maintenance, and public lighting. Special assessments for neighborhood improvements or infrastructure projects could add another $200 to $1,000 annually, though these vary by specific location within San José.
The most common scenario for a $1,000,000 property in prime San José neighborhoods like Escazú or Santa Ana would result in total annual property-related taxes and fees of approximately $5,200 to $6,200, representing an effective rate of 0.52% to 0.62% of property value.
Are there additional municipal taxes for infrastructure and services?
San José Municipality imposes several additional taxes and fees beyond the base property tax that directly support local infrastructure and municipal services.
The primary additional levy is the Municipal Development Tax, ranging from 0.10% to 0.25% of assessed value, specifically funding road improvements, public lighting, and park maintenance. This tax is mandatory for all properties within San José city limits and is collected quarterly along with your regular property tax bill.
Infrastructure improvement bonds may be levied on specific neighborhoods or districts undergoing major upgrades, typically costing $200 to $800 annually for 5-10 year periods. Recent examples include the downtown revitalization project and the Paseo Colón transit improvements, each requiring special assessments on nearby properties.
Municipal service fees are collected separately and include mandatory garbage collection ($180-$300 annually), street cleaning ($120-$200 annually), and public lighting ($100-$180 annually). These fees are based on property size and location, with commercial zones and luxury residential areas paying higher rates.
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What school and education-related taxes apply to properties?
Costa Rica does not impose separate school district taxes on properties, as the education system is funded entirely through national government revenue sources.
Unlike many countries where local property taxes fund schools, Costa Rica's centralized education system means your property tax obligations in San José do not include any education-specific levies. The national government funds all public education through income taxes, corporate taxes, and other national revenue sources.
However, some private residential developments and gated communities in San José may have homeowner association fees that include contributions to private schools or educational facilities within the development. These are contractual obligations rather than government taxes and typically range from $100 to $500 annually depending on the community.
This centralized approach means that education quality and funding are not directly tied to local property values or neighborhood wealth, creating more uniform educational opportunities across different areas of San José. For property investors, this eliminates education-related tax variability that might affect investment decisions based on school district boundaries.
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What special assessments and district charges exist in 2025?
San José properties may be subject to various special assessments and district charges that fund specific infrastructure projects and community improvements throughout 2025.
The most common special assessment is the Metropolitan Area Infrastructure Tax, affecting properties in central San José districts and costing $300 to $700 annually per property. This assessment funds major transportation projects, including the San José-Cartago train line improvements and downtown traffic management systems.
Flood control and drainage assessments apply to properties in specific zones prone to seasonal flooding, particularly in lower-elevation areas near rivers. These assessments typically cost $150 to $400 annually and fund improved drainage systems, flood barriers, and emergency response infrastructure.
Business improvement districts in commercial areas like downtown San José and the Multiplaza area impose additional charges of $200 to $1,000 annually on commercial properties, funding enhanced security, street cleaning, and promotional activities. Residential properties within these districts may face reduced charges of $50 to $200 annually.
Environmental protection fees are increasingly common, particularly for properties near protected areas or important watersheds, ranging from $100 to $300 annually and supporting conservation efforts and sustainable development initiatives in the greater San José metropolitan area.
What tax exemptions and reductions are available in 2025?
Several property tax exemptions and reductions are available in San José for 2025, potentially saving qualifying property owners hundreds to thousands of dollars annually.
The primary residence exemption provides a 25% reduction in municipal property taxes for properties under $150,000 that serve as the owner's primary residence. This exemption saves approximately $375 to $1,125 annually for qualifying properties and requires annual verification of residency status with the municipality.
Senior citizen exemptions apply to Costa Rican residents over 65 who own properties valued under $100,000, providing up to 50% reduction in both national and municipal property taxes. This exemption can save $500 to $1,500 annually and requires income verification showing annual income below $15,000.
New construction incentives offer temporary tax reductions for energy-efficient buildings and sustainable construction projects, providing 30% to 50% tax reduction for the first five years after completion. Green building certifications and renewable energy installations can extend these benefits for up to ten years.
Foreign investor incentives under the Investment Promotion Law may provide temporary property tax exemptions for qualifying tourism or export-oriented projects, though these require specific project approval and typically apply only to commercial developments rather than residential properties.
How often can assessed values increase and what are the limits?
Property assessed values in San José can be increased annually, but practical limitations and legal protections restrict dramatic year-over-year changes in most circumstances.
The Costa Rican Tax Administration typically limits annual assessed value increases to 10% to 15% unless significant property improvements have been made or major market shifts have occurred. This informal cap helps prevent sudden tax shock for property owners while allowing assessments to track general market appreciation.
Comprehensive revaluations occur every 5 to 7 years across different neighborhoods in San José, during which assessed values may increase more substantially to align with current market conditions. During these revaluations, increases of 20% to 40% are not uncommon, particularly in rapidly appreciating areas like Escazú and Santa Ana.
Property owners can appeal assessed value increases within 30 days of receiving their annual tax notice if they believe the assessment exceeds fair market value. Appeals require professional property appraisals and documentation of comparable sales, with successful appeals resulting in reduced assessments for the current year.
New construction, major renovations, or property transfers trigger immediate reassessment to current market value, potentially resulting in significant increases from previous assessed values. These reassessments are not subject to the gradual increase limitations applied to existing assessments.
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What are the exact payment deadlines and penalty structure for 2025?
Property tax payments in San José for 2025 follow a structured schedule with specific deadlines and escalating penalties for late payments.
Annual property tax bills are issued in January 2025, with payment options including a single annual payment due by March 31st or quarterly installments due March 31st, June 30th, September 30th, and December 31st. Paying annually provides a 5% discount, while quarterly payments avoid interest charges but receive no discount.
Late payment penalties begin immediately after each deadline, starting with a 2% penalty for payments 1-30 days late, increasing to 4% for 31-60 days late, and reaching 6% for payments more than 60 days overdue. Monthly interest of 1.5% is added to all unpaid balances after the initial 30-day grace period.
Properties with taxes unpaid for more than 12 months enter tax lien status, potentially leading to auction proceedings after 18 months of non-payment. The municipality can collect unpaid taxes, penalties, and legal fees through property sale, though property owners retain rights to redeem their property by paying all amounts due plus additional fees.
Electronic payment systems allow online payment through most Costa Rican banks, typically processing within 2-3 business days. Cash payments can be made at municipal offices, authorized banks, or designated payment centers throughout San José, with same-day processing for payments made before 3:00 PM on business days.
What additional taxes and fees exist beyond basic property tax?
Several additional taxes and fees apply to property ownership in San José beyond the basic property tax, significantly impacting total annual ownership costs.
Transfer taxes are due when purchasing property, calculated at 1.5% of the sale price or assessed value, whichever is higher. This one-time tax is typically split between buyer and seller, with each paying 0.75%, though negotiations may result in different arrangements.
Annual registration fees range from $200 to $500 depending on property value, paid to the National Registry to maintain current property records and ownership documentation. These fees are due annually by December 31st and are separate from property taxes.
Municipal services fees are mandatory for all properties within San José city limits, covering garbage collection ($180-$300 annually), street lighting ($100-$180 annually), and emergency services ($80-$150 annually). These fees are based on property size, location, and usage classification.
Luxury property surcharges apply to properties valued over $200,000, adding an additional 0.30% to 0.55% to the standard tax rate. This progressive taxation significantly impacts higher-value properties, with mansions and luxury condominiums in premium areas like Escazú facing effective tax rates approaching 0.80% of assessed value.
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What is the total effective tax rate and annual cost for a $1,000,000 property?
The total effective property tax rate for a $1,000,000 property in San José typically ranges from 0.52% to 0.68% annually, resulting in total costs between $5,200 and $6,800 per year.
Breaking down a typical $1,000,000 property tax bill: National property tax contributes $2,500 (0.25%), municipal tax adds $3,500 to $5,500 (0.35% to 0.55% for luxury properties), and mandatory municipal services contribute approximately $600 annually. Additional special assessments for infrastructure or district improvements typically add $300 to $800 annually.
The most common scenario for properties in desirable San José neighborhoods results in total annual property-related taxes and fees of approximately $6,200, representing an effective rate of 0.62%. This includes all mandatory taxes, fees, and typical special assessments but excludes voluntary homeowner association fees or private community charges.
Compared to other Central American capitals, San José's effective property tax rates are moderate to high, but the strong legal framework, property rights protection, and municipal services generally justify these costs for most investors. Properties in the highest-value areas like Escazú or Santa Ana may face slightly higher effective rates due to additional municipal services and infrastructure assessments.
For investment planning purposes, budgeting 0.65% to 0.70% of property value annually for all property-related taxes and mandatory fees provides a conservative estimate that accounts for potential rate increases and special assessments that may arise during ownership.
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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 San José's property tax structure is crucial for making informed real estate investment decisions in Costa Rica's capital.
The combination of national and municipal taxes creates effective rates between 0.52% and 0.68% annually, making careful budgeting essential for property investors and residents alike.
Sources
- Ministry of Finance - Property Tax Information
- Municipality of San José - Municipal Finances
- National Registry - Property Registration Fees
- Costa Rican Social Security - Property Assessment Guidelines
- Central Bank of Costa Rica - Economic Indicators
- Costa Rican Real Estate Chamber - Market Reports
- Rural Development Institute - Property Valuation Methods
- National Planning Ministry - Urban Development Plans
-Complete Guide to Buying Property in San José
-How to Pay Property Taxes in San José: Step-by-Step Guide
-How Much House Can You Afford in San José?
-Average Rental Prices in San José: 2025 Market Analysis
-Airbnb Investment Guide for San José Properties