The Costa Rica Luxury Home Tax (officially known as Impuesto Solidario para el Fortalecimiento de Programas de Vivienda, or Solidarity Tax for Strengthening Housing Programs) is an annual tax on high-value residential properties. Introduced in 2009, the tax is designed to help fund affordable housing and social programs across the country. If you own or plan to buy luxury real estate in Costa Rica, understanding this tax is essential to avoid penalties and stay compliant.
Calculation of the Luxury Home Tax:
The Luxury Home Tax is calculated based on a progressive rate system that considers the property’s construction value.
The value of the main construction and any additional structures (such as a gazebo, pool, walls, internal roads, etc.) must be known in order to complete the form. The tax department issues a construction valuation manual known as the Manual of Base Unit Values per Construction Typology and it is available to determine the declared value for the solidarity tax.
The Luxury Home Tax uses a progressive tax rate system ranging from 0.25% to 0.55%. Here’s a step-by-step breakdown of how to calculate it:
1. Determine Construction Value
The construction value is assessed using the Manual of Base Unit Values per Construction Typology (Manual de Valores Base por Tipología Constructiva) issued by the Costa Rican Tax Department (Dirección General de Tributación). This manual classifies construction types and assigns unit values per square meter.
This includes:
Main house or building
Gazebos, pools, perimeter walls, internal roads, and other structures
2. Add Land Value (if applicable)
If the construction value exceeds the tax exemption threshold, the land value must also be calculated using municipal valuation standards. The total of land and construction value becomes the taxable base.
3. Apply the Progressive Tax Rate
Once the total property value is calculated, apply the corresponding tax rate based on the valuation bracket:
| Property Value Range (CRC) | Approx. USD | Tax Rate |
|---|---|---|
| Up to ₡154,671,000 | ~$290,000 | Exempt |
| ₡154,671,000 – ₡387,000,000 | ~$290,000 – $725,000 | 0.25% |
| ₡387,000,000 – ₡775,000,000 | ~$725,000 – $1.45M | 0.30% |
| ₡775,000,000 – ₡1.163B | ~$1.45M – $2.18M | 0.35% |
| ₡1.163B – ₡1.550B | ~$2.18M – $2.90M | 0.40% |
| ₡1.550B – ₡1.939B | ~$2.90M – $3.63M | 0.45% |
| ₡1.939B – ₡2.327B | ~$3.63M – $4.36M | 0.50% |
| Over ₡2.327B | Over ~$4.36M | 0.55% |
Note: USD equivalents may vary with exchange rates.
I am including here the official Department of Revenue publication for the Luxury Home Tax threshold for 2025.
Filing and Payment Schedule
Filing Requirement: Property owners must file a valuation declaration every three years.
Current Reporting Period: 2025
Annual Payment: The tax must be paid annually, typically in January, regardless of the filing period.
Failure to file or pay on time may result in interest charges and penalties.
The Solidarity Tax for the Strengthening of Housing Programs (Impuesto Solidario para el Fortalecimiento de Programas de Vivienda) is an annual tax imposed on high-value residential properties in Costa Rica. The tax applies when the fiscal value of the construction exceeds ₡145 million colones (approximately USD $240,000).
For 2025, here is the official progressive rate table published by the Costa Rican Ministry of Finance.
2025 Luxury Home Tax Brackets
| Property Value Bracket (CRC) | Approx. USD | Tax Rate |
|---|---|---|
| Up to ₡364,000,000 | Up to ~$606,667 | 0.25% |
| Over ₡364,000,000 up to ₡730,000,000 | ~$606,667 – $1,216,667 | 0.30% |
| Over ₡730,000,000 up to ₡1,095,000,000 | ~$1,216,667 – $1,825,000 | 0.35% |
| Over ₡1,095,000,000 up to ₡1,462,000,000 | ~$1,825,000 – $2,436,667 | 0.40% |
| Over ₡1,462,000,000 up to ₡1,824,000,000 | ~$2,436,667 – $3,040,000 | 0.45% |
| Over ₡1,824,000,000 up to ₡2,191,000,000 | ~$3,040,000 – $3,651,667 | 0.50% |
| Over ₡2,191,000,000 | Over ~$3,651,667 | 0.55% |
Exemptions to the Luxury Home Tax
Some properties may be exempt from the Luxury Home Tax, including:
Properties used exclusively for agricultural purposes
Government-owned buildings
Diplomatic or consular properties
There are no other exemptions. If you’re unsure whether your property qualifies for an exemption, it is best to consult with a qualified Costa Rican tax advisor or Attorney.
Conclusion
In conclusion, the Costa Rica Luxury Home Tax is a yearly tax imposed on residential properties of high value with the purpose of funding social housing initiatives. It is of utmost importance for property owners in Costa Rica to comprehend the calculation process and adhere to their tax responsibilities. By staying updated on tax rates and thresholds homeowners can ensure they meet their tax obligations.
With strict reporting requirements, progressive tax brackets, and the possibility of penalties for non-compliance, staying informed is essential.
✅ Tips for Property Owners:
Review your property valuation every three years.
Use the official valuation manual to assess your construction value.
Pay the tax annually, even if your declaration is still valid.
Consult a tax professional to determine exemptions or to handle your filings.
