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There have been considerable changes in our taxes in Costa Rica and the legal obligations for property owners in 2025. If you own a property in Costa Rica, especially if it’s held in a corporation, you should pay close attention.
In this article, I will cover which taxes the local government charges and when they must be paid. You must pay taxes when you work, own a business, own property, or sell that property. And, of course, you don’t want to pay them too late. This year, I have also added the new legal obligations. Most of these are defined by money laundering laws and are applied in almost every country worldwide.
Do NOT expect to receive a tax notification in the mail because our tax authorities will not send you anything. You’re responsible for knowing when to pay, how much to pay, and ensuring it’s paid on time. Fines are low in most cases, but if you don’t pay, you might get into trouble, primarily if your property is owned in a corporation.
This guide provides all the information about which taxes to pay, how much, and when you may be required to pay. There are several links to Spanish-language websites, so feel free to use DeepL to translate. I’ll mark the most critical information in red for easier use.
Since we are in the Costa Rica real estate business, let’s start with property tax and other related taxes and obligations first:
Property Tax
The property taxes in Costa Rica, or Impuesto sobre Bienes Inmuebles, are ridiculously low. Property owners pay a 0.25% property tax on the value registered in the Municipality where the property is located.
You do NOT receive a notification from the city telling you that you must pay property taxes, even though you might expect one.
Municipal Services
Besides the property tax, you’ll also be charged for other municipal services. Because the municipalities are autonomous, the law allows them to calculate the charges for those services as they see fit. Therefore, the charge rate per million colones can vary by municipality. Here is an example of how some municipalities calculate the rate:
- Road cleaning (Aseo de Vias) – Property value x ¢131 / 1,000,000
- Park maintenance (Servicio Parques) – Property value x ¢12.24 / 1,000,000
- Storm sewer (Alcantarillado) – Property value x ¢21.10 / 1,000,000
- Garbage pickup (Basura) – A fixed amount
When?
Property and municipal taxes must be paid quarterly. Very few municipalities offer an online system to pay your property tax. Property taxes and municipal services must be paid on or before March 31st, June 30th, September 30th, and December 31st. You can request the annual amount from your municipality before the end of January. When you pay annually, you’ll receive a 2% discount. Nonetheless, it’s good to know that the late payment fee is low.
Update the Value
All property owners are required to update their property values every 5 years.
The value has to be updated by the property owner every 5 years. This is mandatory. This article explains the declaration, including how to calculate the values and where to obtain them. Some municipalities are now connected to the National Property Register. As soon as a property is sold, the Municipality will know its sale price. Nonetheless, the purchase price is not used as the property value; the property value is calculated using the Ministry of Finance’s land value map and the construction-type value guide (Manual de Valores base unitarios por tipología constructiva).
Most municipalities will assist property owners with this update because the calculations are complex. If you don’t present the update, the city will do it for you. However, some municipalities are now imposing fines for failing to present the update, and the penalties are substantial.
Luxury Home Tax
We have a Luxury Home Tax (Impuesto Solidario) that applies only to luxury homes. Supposedly, the government uses it to eradicate the shacks of the poor.
Article 7 of the law requires the declaration to be filed every three years. For 2026, the scale was updated to apply to taxable values exceeding ₡143,000,000.00.
If your home falls into this category, calculating this tax is not straightforward. You can visit this page on our site for all the necessary information on this tax. Homes are exempt from Luxury Home Tax up to ¢143.000.000 – (this is the value of the construction, not including the land value). Learn about calculating this tax on the Tax Office’s website on the Impuesto Solidario.
When?
The new Form 174 in TRIBU-CR must be used to register and declare this tax before January 15th, 2026.
If you own a Corporation
This is where there are many changes, so make sure you connect with your accountant. Those who own a corporation have had to pay corporation tax since 2017. Ask your accountant for the latest updates if you have a corporation with a commercial or business activity.
Having an inactive corporation likely means you own a car, a boat, or property through a corporation in which you are a shareholder, and that the corporation is not actively engaged in business.
Inactive Corporation
This is any corporation that does NOT generate any income. If the corporation holds only your residence, it should be inactive. BUT, have your lawyer check on this. If your corporation has income, such as from a long-term or Airbnb rental, the corporation should be active and must pay income tax (see below).
1. Declaration Form D-140 (Update of the Registro Único Tributario).
Must be submitted within 10 business days after incorporation. This includes the tax domicile of the legal representative(s) and the economic activity code. Every activity now has its own code.
2. Corporation Tax.
This is paid annually in January. For inactive companies, the amount is fixed and can be paid through any national banking platform.
3. Education and Culture Stamp Tax.
This is paid between February and March each year. The calculation is based on the net assets declared in the D-101 form for the previous year.
4. Ultimate Beneficial Owner (UBO) Declaration.
This must be submitted each April on the Central Bank of Costa Rica platform. It allows the identification of the natural person who owns or controls the company.
5. Declaration Form D-101 (Income Tax).
Even if the company does not generate income, it must declare its assets, liabilities, and equity. This form is essential because it is used as the basis for other taxes and to verify unjustified increases in equity.
6. Email registration.
It is essential to register your email address (now mandatory) with the National Register; contact your lawyer ASAP. You’ll be fined for not complying!
7. Non-compliance
Consequences of non-compliance include financial penalties, inability to register documents in the National Registry, and non-issuance of legal status or certifications. Did the Costa Rican government close your corporation while it owns property because of non-payment? Then contact a lawyer now.
Active Corporation
In the case of an active corporation, which means that the corporation generates income, you must comply with all the above, PLUS you must pay income tax that will show on Declaration D-101. See below for an explanation.
Mandatory Declaration corporations (RTBF)
You must be a citizen or a legal resident of Costa Rica to comply with the mandatory annual declaration of beneficial owners and shareholders (Registro de Transparencia y Beneficiarios Finales), for active and inactive corporations. You must have a digital signature for this. Read the full story about RTBF in this blog by Attorney Francisco Molinero.
If you’re not a citizen or a legal resident, and you own a corporation in our country, contact your lawyer or click on the banner below for an excellent service that will take care of everything for you:
When?
The Corporation Tax in Costa Rica must be paid annually for the first 30 days after January 1st.
Timbre Educacion y Cultura
Every corporation has to pay the Timbre de Educación y Cultura annually. If you have a corporation that owns a car, a boat, or property, you’ll need to pay it annually, in February or March, at Banco de Costa Rica.
Capital Gains Tax
You will find many old online articles stating that Costa Rica does not have a capital gains tax, but that is no longer the case. We have undergone significant changes, so please be aware of them when selling a property.
Costa Rica’s standard capital gains tax rate on gains from the sale of assets (e.g., property, shares, other Costa Rica-sourced assets) is 15% of the net gain for a seller, whether citizen or resident, under the Income Tax Law. The sale of your personal residence is exempt from the capital gain.
Withholding for Non-Residents on Real Estate Transactions
The following is new and was changed: For non-resident sellers of Costa Rica real estate, the tax treatment in 2025 is governed by recent tax administration resolutions:
2.5% of the gross sale price of a property when the seller is a non-resident must be withheld at closing and paid through the TRIBUCR tax system. If this is not done, the buyer will be responsible. Those who have never bothered to become residents while owning property will have to pay the capital gains tax at closing, even if there is a loss on the property sale.
Are you interested in the whole story about Capital Gains Tax? Then read this blog by Attorney Frank Molinero.
Income Tax
When you retire here, no matter where you come from, you probably already pay taxes on your retirement income. This exempts you from paying income tax here. Yes, retirees do NOT pay any taxes on their foreign retirement income. You only pay income tax if you receive an income in this country. If you live here, work online, and earn income in another country, and are taxed in that country, you do not have to pay income taxes here.
Fiscal period
Our fiscal year runs from January 1 to December 31.
How?
The income must be declared on Form D-101.
When to pay
The annual income tax is declared and paid within two months and fifteen calendar days of the ordinary fiscal period, which runs from January 1 to December 31 of each year.
Employees
Are you an employee? Your employer should then deduct the applicable taxes from your salary, with a small credit for children and a non-working spouse. The first ¢922.000,00 income is exempt. We don’t have the deductibles you might be used to in your home country, such as for studies, the number of children you have, or your mortgage.
Individual Income Tax – Self-Employed Income
Do you work in your name? The first ¢4.094.000,00 is exempt, with a small credit for children and a non-working spouse. We don’t have the deductibles you might be used to in your home country, such as for studies, the number of children you have, or your mortgage.
Corporations
The taxable income for corporations changes every year, so you should always check with your accountant first.
Do you have your own business? The income tax is divided into five stages: 5%, 10%, 15%, 20%, and 30%. Check with your accountant.
Marchamo – Circulation tax
Every year, you must pay circulation or road tax on any vehicle you own. INS (the government-owned insurance company) is in charge of this tax.
The deadline to pay the marchamo is December 31. Late payments incur a 10% monthly fee.
Starting Jan. 1, drivers who do not display the marchamo sticker on their vehicles face a fine and have their license plates removed.
Vehicle owners can learn what they must pay on the INS website. You can pay the Marchamo in over 2,000 places.
Import Tax
Allow me to outline import taxes in Costa Rica. One thing is sure: once you live here, you pay quite a bit of taxes on everything you buy. The government needs revenue to pay its employees, build roads, and run the country. They derive most of their income from taxing all imported goods.
That means all cars, jewelry, clothing, liquor, and food products are taxed. Some are higher than others and are therefore more expensive here than in other countries. Each article has a different tax; this article provides an overview of the percentages. Do your homework on this before you decide to move to Costa Rica.
When you import your household goods upon moving here, you must pay the import tax. Bring them in as used articles, and you’ll do fine.
Depending on how you dress, many of us go to the States at least once a year for shopping. In another article, you can learn how to move your household without paying too much import tax.
Sales Tax, now IVA
In other countries, you pay state tax, sales tax, VAT, BTW, or whatever you call it. We pay on almost everything 13% Value Added Tax or IVA (Impuesto Valor Agregado). This includes products and services. The IVA will show on every invoice when you pay.
When you sell your house through a real estate agent, you must pay the agent the real estate commission PLUS 13% IVA. The real estate agent is a collector for the state, like a store or a restaurant. This is the law.
Do you have a business in Costa Rica? Or maybe a commercial or residential rental property or a vacation rental? Since 2019, rental income from property has been subject to income tax and 13% VAT. The tenant pays this VAT in addition to the rent.
Service Fee – Tips
I call it a service tax even though it is a mandatory tip. The 10% restaurant/bar service tip ensures waiters and bartenders receive a tip automatically. Restaurants and bars ALWAYS include the 10% service fee in their invoice. It’s a great idea, but it does nothing to improve services.
Do you feel you received incredible service from your waiter or bartender? Then feel free to tip extra, but it is not required.
The Tax Collector
The tax collector, the Ministerio de Hacienda, is ineffective at collecting taxes; there is widespread tax evasion across all levels. They are always trying to impose new taxes, as most governments do. There are always proposals, such as a gas tax to fund new roads, a tax on power bills to fund fire departments in smaller towns, and many others. Since 2025, the government has implemented a new system: Tribu.CR. With Tribu, the government can cross-control income and spending for every corporation and individual who is a citizen or resident in Costa Rica.
It’s why they never have money to build new bridges, maintain roads, acquire up-to-date equipment, or train their employees. In 2020, COVID-19 exacerbated the situation. The Central government has sought to increase tax revenue and reduce tax evasion through a central invoicing system. We’re also moving toward a cashless society, which means more controls. Nonetheless, you are responsible for tracking which taxes you must pay, how much each is due, and when.
Looking for assistance?
I expect this article on taxes in Costa Rica to help you determine which taxes you need to pay and when. We have all the knowledge you need to guide you through the purchase of your new home in this incredible country. We have all the right connections, having done business in Costa Rica for over 45 years.
Feel free to comment on this blog and share this article on your social media. Would you like to learn more about buying property in Costa Rica? Then request a Zoom meeting with me now.
Used in images: Image by drobotdean on Freepik
