By Harold Matarrita, Junior Attorney at GM Attorneys
Every year, property owners in Costa Rica, especially those who maintain their properties through commercial companies, must comply with a series of legal and tax obligations to avoid penalties, interest, and contingencies before the competent authorities.
Proper planning allows you to keep both the property and the owner company up to date and avoid future inconveniences. Below, we summarize the main obligations that must be considered.
1. Corporate tax
Companies registered in Costa Rica must pay the Legal Entity Tax annually during the month of January (1-31).
Failure to comply with this obligation generates interest and may cause registry restrictions that make it difficult to carry out corporate procedures, including the registration of documents with the National Registry.
2. Declaration of Inactive Companies
Companies that do not carry out commercial activities, but that own movable and immovable property, are obliged to file the declaration of inactive companies with the Tax Administration.
This declaration must be filed annually and allows the company’s equity composition to be reported.
The usual filing period is from January 1 to 31 of each year.
3. Inactivate CR LLC Assets Disclosure:
According to tax regulations, all inactive Costa Rican companies that do not perform any commercial activities (e.g. companies that only hold a property), must file an incometax return every year detailing their assets, equity, and debts.
It must be held annually from March 1 to 15 of each year.
4. Education and Culture Stamp
Commercial companies must pay annually the Education and Culture Stamp, the amount of which depends on the registered share capital of the company.
The ordinary deadline for payment expires on March 31 of each year.
5. Transparency and Beneficial Ownership Registry (RTBF)
Legal entities incorporated in Costa Rica must annually submit the corporate obligation to the Transparency and Final Beneficiaries Registry (RTBF). The filing period runs from April 1 to April 30 of each year.
6. Property Tax
- Every owner of real estate must keep the payment of municipal property tax up to date.
- This tax is paid quarterly and corresponds, as a rule, to 0.25% of the registered tax value of the property.
- Keeping this tax up to date is essential to avoid surcharges and to manage various municipal procedures.
7. Garbage collection tax
A public service that the county provides to all properties under its jurisdiction that have a building. This tax is paid quarterly.
8. Real Estate Declaration
Owners have the obligation to update the declaration of the value of the property before the corresponding municipality every five years.
This update allows the fiscal value of the property to adequately reflect the existing characteristics and improvements.
9. Solidarity Tax for the Strengthening of Housing Programs (Tax on Luxury Homes)
Residential properties whose construction value exceeds the threshold established by law must file the corresponding declaration and pay this tax.
Therefore, it is advisable to periodically check if the property is within the parameters that require compliance with this obligation. This declaration must be made every three years, before January 15.
10. Rental Income Obligations
- When the property generates rental income, additional tax liabilities may arise, including:
- Monthly Income Tax Return.
- Declaration and monthly payment of Value Added Tax (VAT), when applicable.
- Compliance with the accounting and tax requirements established by the Tax Administration.
- In these cases, it is advisable to have specialized accounting advice.
11. Capital Gains Tax
In the event of a sale of the property, the owner must analyze the possible application of the Capital Gains Tax, whose general rate is 15% on the net gain obtained in the transaction.
Proper planning before the sale can help to correctly determine the taxable base and avoid tax contingencies.
12. Corporate Legal Address and Mandatory Email
Under Costa Rican law, all corporations and limited liability companies must register an email address with the National Registry to receive official and legal notifications related to the company. In addition, the legal address of the company must be clearly identified and located within Costa Rica.
Maintaining compliance with Costa Rica’s corporate, tax, and municipal obligations is an essential part of responsible property ownership. A periodic legal review can help identify pending obligations, avoid penalties, and ensure that both the property and the owner entity remain in good standing. For many foreign investors, particularly those who own property through Costa Rican corporations, a year-end compliance review is one of the best ways to prevent issues before they arise.
Harold Matarrita is a junior attorney at GM Attorneys, advising property owners and investors on real estate matters throughout Guanacaste, based in Tamarindo. More information on our blog: gmattorneyscr.com/blog.
Disclaimer: This material is provided for educational and informational purposes only. It does not constitute legal advice or create an attorney-client relationship. Any legal decisions should be made in consultation with a qualified professional who can assess the specific facts of your situation. If you need guidance, you are invited to contact our team.
