Part of your duty as a home owner in Costa Rica is to comply with the payment of the luxury home tax. Law No. 8,683 dictated since 2009 that one of these taxes would be the solidarity tax for the strengthening of housing programs. Learn what the luxury home tax is about, how to calculate your payment, and where to report it.

In this article you will find:
What is the law 8,683?
How is it paid and declared?
The importance of declaring and paying on time!

What is the law 8,683?

This tax is levied on all properties in the national territory that have one or more facilities for residential use. Regardless of whether your property is used occasionally, regularly or only for recreation purposes, such as beach houses, it must comply with the Solidarity Tax for the Strengthening of Housing Programs.

The projection of the collection of said money is that it will be allocated to the Housing Mortgage Bank (Banhvi), to finance decent housing for those who are in a situation of extreme poverty.

If you are the owner or holder of rights of any real estate that exceeds ¢ 133 million, you must make the respective payment for your property (s). The tax rate ranges from 0.25% to 0.55% depending on the value of the property. Which is calculated considering the main construction and the accessories (such as swimming pools, ranches, etc).

ValueTax rate
Over the excess of ₡ 133,000,000 and up to ₡ 335,000,0000.25%
Over the excess of ₡335.000.000 and up to ₡672.000.0000.30%
Over the excess of ₡672.000.000 and up to ₡1.008.000.0000.35%
Over the excess of₡1.008.000.000 and up to ₡1.345.000.0000.40%
Over the excess of ₡1.345.000.000 and up to ₡1.679.000.0000.45%
Over the excess of ₡1.679.000.000 and up to ₡2.017.000.0000.50%
Over the excess of ₡2.017.000.0000.55%
Remember that if the construction value exceeds the exempt amount, you must calculate the value of the land, based on the valuation parameters and add it to the construction value. With this information you must calculate your tax.

How is it paid and declared?

After having registered the property in question, the solidarity tax for the strengthening of housing programs must be declared through the virtual portal of the Ministry of Finance, ATV. Is important to have

The name of the form is D179: “Unique Form for Registration, Declaration and Payment of the Solidarity Tax for the Strengthening of Housing Programs, Law 8,683”.

This statement must be submitted every three years no later than January 15 of each year, but the payment must be made annually through authorized banks. This is what you will need to pay your solidarity tax, according to law 8.683:

The importance of paying and declaring on time!

In addition to tax evasion being a criminal offense under the law, there are immediate penalties that can give you a headache. Therefore, it is best that you are aware of your duties as a homeowner and make these payments on time.

The declaration of this tax is annual, the period runs from January 1 to December 31 of each year.
And if they are omitted, you can be charged cumulative fines depending on the case, from half a base salary per month or fraction of a month, that is, ¢ 225,100.00 extra to the tax that you must pay.

Taxpayers who fail to comply with the obligations established in this law and incur in the infractions established in articles 79, 80, 80 bis and 81 of the Code of Tax Regulations and Procedures, Law No. 4755 of May 3, 1971 and its reforms, the sanctions established in said articles will be applied. Likewise, the reductions of article 88 of that normative body will be applicable. The collection of interest by the taxpayer will be applied in accordance with article 57 of the Code of Tax Regulations and Procedures

Code of Tax Regulations and Procedures of the Treasury

Similarly, it is important to remember that each year you must “refresh” or update the value of your property. It may have been devalued or on the contrary, if you made more accessories or if the price of land in that area increased, then this will be reflected in your solidarity tax.

Be responsible and always keep up to date with your duties as a real estate owner. Remember that it is always okay to ask for help and seek out professionals in the area. Do not hesitate to consult with your real estate agent or your trusted accountant so that they can give you a hand in carrying out these procedures.

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