In Costa Rica, capital gains taxes were implemented as part of a fiscal reform that took effect on July 1, 2019. The capital gains tax rate is 15%, applying to the profit made from selling capital assets, including real estate. This profit is calculated by subtracting the acquisition cost (including any capital improvements and related expenses) from the selling price.
Exemptions from Capital Gains Taxes:
- Primary Residence: If the condo or home sold is your primary home, you are exempt from paying capital gains tax on the profit.
- Previous Ownership: Properties acquired before July 1, 2019, can opt to pay a one-time capital gains tax of 2.25% on the total sales price instead of the 15% on the profit. This can be advantageous for long-term property owners who have seen significant appreciation.
Key Points:
- Declaration and Payment: Capital gains must be declared and the tax paid within 15 working days of the property sale. The payment is made to the Costa Rican tax authorities, typically through a notary who manages the property transfer.
- Record Keeping: Maintain detailed records of all transactions, improvements, and expenses related to the property for accurate calculation and reporting.
- Professional Advice: Given the complexities of tax laws and potential tax liabilities, consulting with a tax professional or legal expert specializing in Costa Rican real estate transactions is highly recommended.
If you have any questions regarding taxation in Costa Rica feel free to contact me.
Michael Mills - Managing Broker Tres Amigos Realty Group
Cell 011-506-8867- 6929 Toll Free USA and Canada - 1-877-293-1456
Email: michael@costarica-realestate.com Web Site: http://www.costarica-realestate.com