Property tax in Costa Rica: the 0.25% municipal tax, valuations and the luxury home tax
Costa Rica's property tax is 0.25% a year of the registered value under Law 7509, declared every five years. Buying adds a 1.5% transfer tax, and costly homes pay the luxury home tax too.
Costa Rica's property tax is a municipal tax of 0.25% a year on the value registered for the property, set by Law 7509, so a home registered at $500,000 pays about $1,250 a year. Owners must declare the property's value to the municipality at least every five years, the municipality can value it itself and fine you if you do not, and the tax is paid yearly, twice a year or quarterly, depending on the canton. Buying property also triggers a one-time 1.5% transfer tax, and homes with a high construction value pay the national luxury home tax on top.
This guide is general information, not tax or legal advice. Confirm your figures with the municipality, a Costa Rican attorney or an accountant.
This guide covers how the 0.25% tax is calculated, how municipalities value land and buildings, what a new build does to your bill, the five-year declaration, appeals, paying and penalties, the exemption for a single home, and the 1.5% transfer tax at purchase.
How much is property tax in Costa Rica?
The rate is a quarter of one percent, 0.25%, of the value registered with the municipality (Law 7509, Article 23). The tax belongs to the municipality where the property is, and the municipality acts as the tax authority (Articles 1 and 3). The law sets one rate for every owner with title in the Registro Nacional; it does not set a different rate for foreign owners (Article 6).
| Registered value | Tax per year at 0.25% |
|---|---|
| $300,000 | $750 |
| $500,000 | $1,250 |
| $1,000,000 | $2,500 |
| $2,000,000 | $5,000 |
Municipalities work in colones, so the bill moves with the exchange rate. The tax year is the calendar year, and the base is the value registered on January 1 (Articles 9 and 22).
What value is property tax based on?
The base is the registered value, not what you think the property is worth. That value changes automatically when one of these happens (Article 14):
- A deed records a higher value when the property is sold or transferred.
- A mortgage is registered on the property.
- The area is corrected or properties are merged.
- The owner declares a higher value.
- The property is subdivided.
- Improvements that need a construction permit are added, when they are worth 20% or more of the registered value.
The municipality can also revalue a property itself, for example after major public works nearby, or at the owner's request when the property has lost value (Article 15). Any change counts from January 1 of the following year (Article 21).
How municipalities value land and buildings
Valuations follow technical rules set by the Órgano de Normalización Técnica (ONT), an office of the Ministerio de Hacienda that guides the municipalities and receives 1% of what they collect (Articles 12 and 13). An appraisal has to be prepared by a professional incorporated in the Colegio de Ingenieros Agrónomos or the CFIA (Article 10 bis).
For buildings, the ONT publishes the Manual de Valores Base Unitarios por Tipología Constructiva. The edition published in La Gaceta on September 28, 2023 gives a replacement cost per square metre for each building type, with values updated to March 2023, and municipalities must use it. It then reduces the value for age and condition using the Ross-Heidecke method. Some of its rates for concrete houses:
| ONT type | Value per m² (colones) | Useful life |
|---|---|---|
| VC01, about 42 to 90 m² | ¢260,000 | 50 years |
| VC05 | ¢485,000 | 90 years |
| VC07 | ¢700,000 | 120 years |
| VC08 | ¢920,000 | 120 years |
| VC09, about 390 m² or more | ¢1,495,000 | 120 years |
| VC10, about 390 m² or more, top of the series | ¢1,835,000 | 120 years |
Source: ONT, Manual de Valores Base Unitarios por Tipología Constructiva 2023. Land is valued separately, by zone.
What a new build does to your property tax
If you buy a lot and build, the tax starts on the land and rises once the house is added. A house that needs a construction permit and is worth 20% or more of the registered value triggers an automatic update (Article 14), and the new value applies from the next January 1.
A worked example, using the ONT values above: a lot registered at ¢100,000,000 and a new 400 m² home valued at the VC09 rate of ¢1,495,000 per m², or ¢598,000,000. The registered value becomes ¢698,000,000, and before any exemption the tax rises from ¢250,000 to ¢1,745,000 a year. If the owner is an individual and this is their only property, the first ¢20,799,000 is exempt (see below), which brings the bill to about ¢1,693,000. The actual typology and land value are set by the municipality's appraiser.
A home with a high construction value may also owe the luxury home tax, which Hacienda collects under its own threshold, declaration and January deadline. Our guide to the luxury home tax in Costa Rica explains it.
The declaración de bienes inmuebles every five years
Every owner must declare the value of their property to the municipality at least once every five years (Article 16), whatever the property is worth (Teletica, November 2024). The declaration is a form filed with the municipality's property tax department, describing the land and the buildings on it. Have the cadastral plan, the property's registry number and the built area at hand.
If you do not file, the municipality can value the property itself, and the law sets a fine equal to the difference in tax left unpaid (Article 17). If you live abroad, put the date in your calendar or ask your attorney or property manager to track it.
How to appeal a valuation
If you disagree with a municipal valuation, you have 15 business days from notification to file a recurso de revocatoria with the valuation office. If it is rejected, you can appeal to the municipal council, and then to the Tribunal Fiscal Administrativo (Article 19). A Costa Rican law firm lists the usual grounds as errors in the area, materials or improvements, departures from the ONT manual and a value above market value (AG Legal).
How and when to pay property tax in Costa Rica
Each municipality decides whether the tax is paid once a year, twice a year or in four quarterly instalments (Article 22). A Costa Rican law firm reports that most municipalities collect quarterly (CostaRicaLaw, 2017). Ask your municipality which payment channels it offers. Municipalities may also create incentives for paying in advance (Article 25).
What happens if you pay late
- Interest. Late payment accrues interest under the Código de Normas y Procedimientos Tributarios (Article 22).
- A lien on the property. Unpaid property tax is a preferential legal mortgage on the property itself (Article 28).
- Debts follow the property. The current owner is jointly liable for unpaid tax and can claim it back from earlier owners (Article 8). The law sets a three-year prescription period for collecting these amounts.
- Publication. Municipalities may publish the list of owners in arrears every quarter (Article 27).
Before you buy land or a house, ask the seller for a certificate from the municipality showing that property tax is paid up to date, and have your attorney check it at closing. Our guide to property due diligence in Costa Rica covers the other checks.
Is there a property tax exemption for a primary home?
There is a limited one. An individual (not a company) whose only property it is pays no tax on the first 45 base salaries of its value, and pays on the excess (Article 4). The base salary for 2026 is ¢462,200 (Poder Judicial, reported by El Observador, December 2025), so the exempt amount is ¢20,799,000. For most new custom homes that is a small share of the value. Ask the municipality how to apply, since a property held in a corporation does not qualify.
The 1.5% transfer tax when you buy
When property changes hands, the Law on the Transfer Tax (Law 6999) charges 1.5% (Article 8). The base is the value stated in the deed, which cannot be lower than the value registered with the tax administration. The law makes the seller and the buyer liable in equal parts and jointly (Article 6); in practice, who pays is agreed in the sale contract. In practice it is paid through the notary who handles the closing. Published copies of the law disagree on the payment deadline, so leave the timing to your notary.
For a new build, the transfer tax applies to the land purchase. Building a house on land you already own is not a transfer, but it does raise your registered value, as explained above.
| Tax | When | Rate | Paid to |
|---|---|---|---|
| Transfer tax (Law 6999) | Once, at purchase | 1.5% of the deed value | Ministerio de Hacienda, through the notary |
| Municipal property tax (Law 7509) | Every year | 0.25% of the registered value | The municipality |
| Luxury home tax (Law 8683) | Every year, above a threshold | Progressive | Ministerio de Hacienda |
Closing costs include more than the transfer tax: registration fees, stamps and notary and legal fees. Published planning ranges differ, from about 3% to 5% of the price (Coldwell Banker, 2026) to 6% to 8% (Osa Tropical Properties), so ask your attorney for an itemised estimate. Our guide to the hidden costs of building a house in Costa Rica covers closing and other costs around a build.
Property tax checklist for owners who build
- At purchase, confirm the property tax is paid up to date and budget the 1.5% transfer tax and other closing costs.
- After registration, confirm the municipality has your name and contact details for the property.
- Note the year of your last declaration and the next one due, at least every five years.
- When the house is finished, expect the registered value to rise from the next January 1, and check the new figure.
- Check whether the finished home crosses the luxury home tax threshold.
- Review any new valuation within 15 business days of notification, in case you want to appeal.
- Keep the plans, permits and final construction cost on file; they are what an appraiser and an appeal rely on.
How Decentra Homes helps
Decentra Homes is a design-build custom home builder in Costa Rica, with design and construction CFIA certified under SANYC Ingeniería (CFIA registration CC-10880). We do not give tax advice, but we can help you plan the full cost of a build; our cost to build a house in Costa Rica guide sets out 2026 construction costs by finish level. A consultation with our CFIA-licensed engineer and architect, who have 15 years of experience, costs $200 per hour. Minimum construction budget $350,000 USD, before land. Reach us on WhatsApp or through our contact page.
