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The most recent FAQ. Costa Rica Real Estate Market present state. What was the past season like? Well, initially, I wanted to write that the past season was really slow. But then, Ii occurred to me that, this is only true with regard to the offers, and deals closed and average quantity of buyers. Those numbers have been down, nevertheless, due to the present state of global economy, there have been an unprecedented number of sellers that have approached us to list their properties. I’d estimate prices have come down between 25-45% in the range of properties up to $350K and, truth to be told, only those properties that are priced to sell (“fire sale” meaning over 40% decrease) have been moving. I would personally encourage most sellers to hold their property for at least a year, unless they desperately need the money…. I would add that the past season, as well as being busy with sellers, forced us to work more closely with other real estate agencies on our network (currently over 40). The buyers now are of a different kind than in the last few years. Times, when people were buying on the phone, not even visited the location or Costa Rica in general, are long gone and that’s why our personal approach and comprehensive service started paying off. This coming High Season? Most likely, the coming High Season will remain relatively slow. Though considering that oil and other commodity prices are rising again and dollar rate is falling again, it might change. We already have a high number of the quality listings in the area. September/October/November period typically has a tendency to slow down, but I expect the market to make a significant increase in activity starting from the middle of December. A few real estate agencies and even more “boiler room” developers have recently gone under, but that might be a good thing for Costa Rica. Prices have stopped sliding down in the last 3-4 months and I think that now it is a good time to buy. General impressions of the market in Costa Rica? My general impression is that the market is slow and will continue to be for while, at least relative to the high levels of appreciation and activity in the last 3-5 years. Having said that, I think we (those who invest and/or live in Costa Rica) are in a good position – at least we did not lose our assets. Prices have come down, reportedly more on the Pacific coast than elsewhere in Costa Rica and there are still people with money who have now had time to mentally adjust to the new world conditions, and Costa Rica remains a desirable permanent or second home destination. We have posted on our blog a couple of current market analyses from other sources, and there are many more where those came from. What activity levels you might be anticipating for the high season? Even if the global economy improves only slightly, I believe this high season (beginning in December) will be busier than last year. When people do come down (and they will, judging from the number of bookings we have for our rentals), I believe they will be greatly impressed, as we have excellent properties with a lot of room for appreciation. The buyers that would take their time to explore the North Pacific area will have a chance to score big.
I truly believe that Costa Rica is as desirable as ever. I don’t see prices going much lower here. The dollar, being weak against other currencies, is still strong against the colon (Costa Rica currency). I think that, whoever is left afloat around here after the initial blow from the last 9 months is going to enjoy a brisk business in the coming season.
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The severe economic downturn in the States and Europe has impacted Costa Rica as well. Condo and subdivision development have slowed dramatically and in some parts along the Pacific coast, American second-home buyers, now strapped for funds, are selling properties at very large discounts. One person’s challenge is another person’s opportunity. However, many experts predict that the boom will resume in the coming years. Costa Rica will continue to draw tourists and retirees from America, Canada, and Europe. Savvy investors often pool their money to form real estate ventures with, up to now, assured returns. Indeed, many folks who invested in Costa Rica real estate a decade ago have seen their investment soar. To be sure, the economic woes in the States and Europe are felt here now but the price stagnation or decline is temporary and will form the basis of a great recovery. Read the full article>>>
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Cash is no longer King as the dollar continues to lose strength. Oil has doubled from its recent lows, which will eventually translate into real world evidence of your declining purchasing power at the pump or the grocery store. It is time to move your dollars into assets like desirable foreign real estate, commodities, and foreign currencies. The U.S. dollar is still very strong in Costa Rica as its exchange rate with the colón traditionally lags behind world currency markets. Costa Rica represents an excellent place to move cash into solid assets like real estate. Real estate in Costa Rica is not driven by job markets and bank financing like in North America, but by foreigners who desire a comfortable retirement home or a solid investment in a political and ecological paradise. Canadians and Europeans now have very favorable exchange rates to further enhance this opportunity. Costa Rica continues to win praise despite the negative global news. Costa Rica has been recently named the 8th most stable country in the world by the Economist, and the 5th cleanest country in the world by Yale University’s Environmental Performance Index (EPI). Foreign retirees and young professionals alike are finding stability and sustainability in Costa Rica during these tumultuous times. To read the full article click HERE.
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Las Palmas Urbanization, Playas Del Coco - Announcing a rent/lease reduction on VRA3-Villa Riviera A No 3, Urbanisacion Las Palmas, Playas del Coco, Guanacaste, Costa Rica, a 861 sq. ft., 2 bath, 2 bdrm 2 story. Now  MLS® $530 USD Weekly - From US$530.00 per week. Property information
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Just 800 m from the Beach!
• 10,000 sq. m. single story - $550,000 USD - $55.00 per M2 Corozalito , Punta Islita Pacific Coast - We have a beatiful property in Costa Rica rarely available for sale. Located in Nicoya Peninsula, in Guanacaste,3 km south of Punta Islita, in Corozalito. Very close to the Punta Islita Luxury Resort and Hotel and walking distant from the beach (800 m).
Hotel and Resort Punta Islita is surrounded by tiny rural villages with a total population of about 1300. The area was formerly used for cattle ranching and slash-and-burn agriculture. Thanks to the hotel’s development and the creation of the Islita Open-Air Contemporary Art Museum, the local community is now a thriving collective of travel professionals, artists, and micro entrepreneurs. The area benefits from the proximity of Resot landing strip. Daniel Oduber International Airport in Liberia is about 2 hrs drive away.
Lot mesures 10.000sq mts of flat land practically 100% suitable for construction with water ,electricity very close to the lot and ready to build or just for an investment.
Property information
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Corozalito , Punta Islita Pacific Coast - Announcing a price reduction on CORLOT-Corozalito, Punta Islita, Guanacaste, Costa Rica, a 10,000 sq. m. single story. Now $550,000 USD - $55.00 per M2. Property information
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Beautifully decorated house!
• 1,080 sq. ft., 2 bath, 2 bdrm single story "Ground Floor Unit" - MLS® $530 USD Weekly - From $530.00 per week Las Calas Rojas, Las Palmas Urbanization - Description
Property Details
Bedroom : two (Two Queen Beds)
Square Meters : 100
Bathrooms : 2
Garage : Parking Space
Built : 2006
Home Features : Fully Furnished.
This comfortable two bedroom / two bathroom family home is located just 250 meters from the Coco Beach. Beach Club facilities are available within 300 meters from the house.
All amenities, including a grocery store, Italian Restaurant. Ice-Cream parlor, Beauty Salon, etc. are within 300 meters.
Just over 900 meters from the centre of Playa del Coco and all main street shops, restaurants, night clubs and casinos.
Ideal property for a family vacation. Fully fitted kitchen and all bed linens provided. Communal laundry room with washing machine and dryer just a few meters away, but this unit has its own washer/dryer.
High quality kitchen utensils and towels and bed linens brought by the owners from the US. Property information
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Las Calas Rojas, Las Palmas Urbanization - Announcing a rent/lease reduction on Villa Las Calas Rojas No 5, Las Palmas Urbanisacion, Playas del Coco, Guanacaste, Costa Rica, a 1,080 sq. ft., 2 bath, 2 bdrm single story "Ground Floor Unit". Now MLS® $530 USD Weekly - From $530.00 per week. Property information
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By the A.M. Costa Rica staff
Expats can be forgiven if they are confused by the new luxury tax on homes. Even some Costa Ricans who participated in drawing up the law are confused, too.
The biggest issue appears to be if land should be included in the valuation to determine the amount on which tax is to be assessed. Some say yes and some say no.
Well, the law says yes, but that appears to be a late change by the legislative staff without the knowledge of some of the key legislative players. Some lawmakers were concerned that if the value of land were included in the tax base that poor people with a shack on a lot of land would be hit with a big tax.
That is what is going to happen.
Article 10 of the law explains what is to be taxed and adds "the value of the land where it is located." That's about the only mention on land in the law, but most of a decree implementing the law contains detailed regulations and formulas for determining land value. Only land that contains a dwelling is subject to the tax.
So, as one real estate broker pointed out, highly valuable vacant lots in some upscale subdivisions will not be subject to the tax until a dwelling is constructed.
Another question being asked is does everyone who owns a dwelling have to register it with Dirección General de Tributación. That question gets yes and no responses. The final paragraph in Article 7 of the law says that only owners of property that will be taxed have the obligation to declare a value. It refers to the preceding article that has a number of exceptions, like public property and property used for religious purposes. The key element is homes worth more than 100 million colons. These are subject to tax. So based on this paragraph only persons with homes worth more than 100 million colons would have to file.
A paragraph tacked on to the end of the law as a
transitory adjustment contradicts this. This says everyone is obligated to present a declaration of value.
An addition problem for Costa Ricans and expats trying to comply with the law is that Tributación has not been helpful in explaining the measure. The law and the decrees implementing it are hidden on the Tributación Web site. There is no link or even mention on the law on the parent site of the Ministerio de Hacienda.
There has not even been a press release. The last press release posted on the Hacienda site is from Jan. 25, 2007. No informational advertisements have been seen even in the Spanish publications.
And there certainly is no official explanation in English.
As a result even some competent Costa Rica real estate brokers have been putting out incorrect information on their Web pages and via e-mails. One sent out an update with corrections Monday.
Some accountants and legal advisers are telling clients to hold off on filing the required forms until at least the end of November. They expect constitutional court cases that would suspend the effective date of the tax payments, which now is Dec. 31 for the last quarter of 2009.
One lawyer said he was going to file a case because the law did not give Tributación the power to tax land. Then the lawyer noticed the tiny phrase in the law that did just that.
Throughout the entire time that the law was being discussed land value was not being considered for the tax base. Any legal action will have to delve down into the actions of the legislative clerks to see exactly when the phrase taxing land was added to the bill and if it was in the bill when lawmakers approved the tax last year.
The purpose of the law is to raise money to provide homes for those individuals in extreme poverty. Any constitutional court magistrate is sure to weigh the intentions of the law against possible technical irregularities.
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El Penon Del Sol, Ocotal
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Announcing a price reduction
on Loft Style Apartment No 40, El Penon del Sol Project, Ocotal, Guanacaste, FINANCE AVAILABLE, a 591 sq. ft., 1 bath, 2 bdrm 2 story "Loft Style". Now
MLS®
$72,100 USD
- FINANCE AVAILABLE.
Property information
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Las Palmas Urbanization, Playas Del Coco
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Announcing a price reduction
on Green Forest of Coco Beach No 30, Playas del Coco, Guanacaste, Costa Rica, a 322 sq. ft., 1 bath, 1 bdrm apartment "Ground Floor Unit". Now
MLS®
$65,000 USD
- Reduced from $72,000.
Property information
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By the A.M. Costa Rica staff A news story Monday about the tax on luxury homes that went into effect Oct. 1 has generated lots of questions. Not all of them are answered easily. Here are 20.
1. Is this a tax on Gringos to drive us out of the country.
Nope, everyone with a home worth more than about $170,000 has to pay the tax. But most Ticos do not know about it either. Stand by to watch the sparks.
2. Where do we pay it?
The Dirección General de Tributación collects the tax. They probably will ask you to deposit it in a local bank like people in business do with the sales tax and others do with the income tax. Banco de Costa Rica and Banco Popular are good bets.
3. Where can I get a form to fill out?
Tributación promises them for this week. But there is an example on line.
4. Is this the same as the municipal tax?
No, this is in addition to the municipal tax. However, the value you report to Tributación probably will come back to haunt you at the municipal level.
5. Are they taxing land?
The original bill only applied a tax to the property right around any home. The final version seems to tax everything that is not agricultural. One reader said everyone should put a big garden in where there is now lawn.
6. Why are they doing this?
The government said it will use the money to clear the slums throughout the county. Some of the money might even go for that. But governments have a way of diverting cash to other things.
7. Is this law constitutional? After all it only taxes people with more expensive homes.
That is up to the Sala IV, but magistrates are politicians, too, so we would bet on constitutionality.
8. Will this affect the sales value of my home?
Yep.
9. How about all those Ticos who have not been paying anything in taxes.
Their day is coming unless they have powerful relatives. The law requires them to compute the replacement value of their dwellings less depreciation.
10. How much is the tax?
See the previous story and also see the adjacent graphic for representative values. The graphic uses the conversion rate of 582 colons to the U.S. dollar, but that relationship can change.
11. How long will the tax last?
The law says 10 years, but don't bet on it ever expiring.
12. My home is owned by a corporation. Does it have to pay the tax?
The responsible party has to register the property and fill out the forms in the name of the corporation.
13. When do we pay?
Three months worth of the luxury tax is due by Jan. 1 along with the form specifying value. The amount for 2010 is due by Jan. 15.
14. Suppose I do not pay?
There are fines and penalties, and they will get you.
15. Do I have to pay a tax on my hotels and all the beautiful grounds and swimming pools we have?
The slum dwellers will be so grateful.
16. Do I have to pay a tax on my home, which is in a beach concession?
Yes. And include the value of the concession.
17. Are the values reported by my neighbors open to public inspection.
We do not know, and the law does not say. It would be a good idea, though.
18. What is value anyway?
The traditional definition is the price that a willing buyer would pay and a willing seller would accept when neither is being compelled. Tributación has chosen to adopt as value the construction costs for a dwelling and the ballpark comparative value of land.
Construction costs even when depreciation is figured in is not the same as value. Someone could build a very expensive white elephant and spend money they never could hope to recover on a sale. But to determine that price would require real training and access to real sale prices.
19. I live in Montana. How do I file the paperwork.
You better get someone here to help you or take a vacation here.
20. What is this story all about? Did I miss something?
You better see the news story Monday. Pronto if you own a home here.
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By the A.M. Costa Rica staff
Most expats who own what the government categorizes as a luxury home probably are unaware that they are subject to a special tax Jan. 1
The tax has been the subject of many newspaper articles, including several when the measure passed the legislature a year ago. The law went into effect Oct. 1, and owners of homes worth more than 100 million colons, about $172,000 have until the end of the year to register their property and to provide an estimated value.
The possibilities for fines and assessments are numerous. For example, if the Dirección General de Tributación experts think a homeowner has undervalued a property by more than 10 percent, there is a hefty fine of five times the taxes that should have been paid.
A systemic problem is that Tributación seems committed to a cost approach to valuation rather than one that determines real value from the comparison of sales prices. Accurate figures for property sales are not now available in Costa Rica because many purchasers lie and state a low figure for the transaction despite what they actually paid. Notaries go along with this charade.
 The law, No. 8683, is designed to provide funds to give housing to the extreme poor. The law also would appear to be a boon for appraisers and others who would help homeowners complete the complex forms.
Some expats think that the measure will damage the already frail real estate market. The law is likely to hit hotels hard because they are included as places of habitation.
A homeowner with a house worth just 100 million colons could expect to pay a tax of just one-fourth of a percent. That is 250,000 colons or about $430.
A property owner with a home and grounds worth 500 million (about $860,000) would pay three-tenths of a percent on any value over 250 million. That's 750,000 colons or $1,288. The total tax would be $2,363.
Certain structures used for housing are exempt from the law, including public and church properties, structures owned or occupied by non-profits engaged in social work, housing at the Instituto Centroamericano de Administración de Empresas, Universidad EARTH, Centro Agronómico Tropical de Investigación y Enseñanza and the Universidad para la Paz, and structures declared historic by the Ministerio de Cultura, Juventud y Deportes.
To avoid a threshold amount creeping lower, the government is empowered to apply an adjustment based on the annual cost of living.
Not apparent in the proposed law was that hotels will be covered. Discussion at the time said that commercial enterprises would be exempt, but a worksheet put out by Tributación specifically includes hotels. That could be a significant financial blow to struggling hotel owners.
The declaration that an owner makes by Jan. 1 is good for three years unless Tributación finds fault. A new declaration has to be made during the first 15 days of the fourth year. 2009 is a special case in that owners have three months to present their estimates of value. Then
they have to pay three-months of the taxes to cover the period from October to Jan. 1. Then they also have to pay the 2010 tax by Jan. 15.
One curve thrown by legislators is that the money paid for this tax is not deductible on income tax statements, according to the law.
Condo owners have a special reporting problem. They have to include their portion of the value of the property held in common, like swimming pools, access roads, ranchos or meeting rooms. Each condo board will have to establish a value and pass that information on to the individual owners.
Owners who hold property in common with others seem to have to report the value along with the other owners.
Another group with special problems are snowbirds who might not be paying attention to political and tax developments in Costa Rica. They own property here but only visit one or two times a year.
A description of the new law is HERE.
An example of forms to report ownership and also value are HERE. Real forms are supposed to be available this week.
The law also said that municipalities have to report the issuance of building permits. The Colegio Federado de Ingenieros y Arquitectos, which approves building plans, also has reporting obligations, said the law.
The income from the tax is earmarked for the Banco Hipotecario de la Vivienda, which would use the funds to build housing for the poor now living in slums, according to law. According to figures from the Ministerio de Vivienda y Asentamientos Humanos there are 182 such slums in the metropolitan area with 116 in San José, 41 in Cartago and 16 in Alajuela. Some 208 slums are outside the Central Valley, according to the ministry.
The ministry reported that by 2004 some 32,797 families were living in slums or makeshift subdivisions, but the number certainly is much higher.
The tax on luxury homes is supposed to last just 10 years, but lawmakers have been known to extend taxes.
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Villa Pura Vida , Ocotal - Announcing a price reduction on Loft Style Unit No 22, Pura Vida Community, Ocotal, Guanacaste, Costa Rica, a 591 sq. ft., 1 bath, 2 bdrm single story. Now MLS® $55,000 USD - Buy it at cost price!. Property information
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Upcoming area close to Ocotal Beach!
• 591 sq. ft., 1 bath, 2 bdrm single story - MLS® $55,000 USD - Buy it at cost price! Villa Pura Vida , Ocotal - New Project in Ocotal, Playas del Coco, Guanacaste, Costa Rica. See area info here: http://www.1costarica.net/Playas_del_Coco_Info/page_1860087.html
Playa Ocotal is a small village that is 3 km south of El Coco on the northern pacific coast of Costa Rica. The beach on Playa Ocotal is one of the best places to snorkel in the area. Playa Ocotal is also one of the cleanest and quietest beaches around.
Ocotal project is very close to one of the best in the country, Ocotal Fishing and Scuba Diving Resort.
Ocotal is a five-minute drive from Playa del Coco, a small fishing and tourist village where you can find a supermarket, bank, pharmacy, restaurants, stores, bars, and nightlife. Liberia International Airport is just 25 minutes away.
Ocotal is considered the best place in Pacific coast for scuba diving (crystal clear water) and fishing is out of this world.
Property Details. Loft Unit No 22
For Sale By the Owner
Bedroom : 2
Square Feet : 591 or 55 m2
Bathrooms : 1
Garage : Parking Space
Home Features : Loft type 2 bedroom condo, with 1 bathroom, kitchen/dining room/living room. Common pool, rancho / laundry room, parking, 24/7 security.
Full Legal Service, including Limited Company incorporation: US$2,100.00 Property information
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