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Taxes in Costa Rica
Costa Rica Tax Code is pretty simple and no one considering living in Costa Rica should be dissuaded by the tax situation. Most property taxes are charged by the local municipal government and are not expensive. 0.25% of the assessed value of the property is the standard rate. Properties worth less that 6 million colones are exempt from any tax though you must apply for that status with the local governement.
Though a sales tax of 13% is charged on nearly everything else, with your real estate purchase, you'll pay a transfer tax of about 1.5% of the purchase price when the title is registered. Likewise, you'll pay 2.5% over the book value of a car you purchase, also in a transfer tax.
Many foreign residents are self-employed or running a small business and income taxes are due to be paid at the following levels:
- up to CR ¢958,000.00 pay no taxes
- between CR ¢958,000.00 and ¢1,431,000.00 - 10%
- between CR ¢1,431,000.00 and ¢2,388,000.00 - 15%
- between CR ¢2,388,000.00 up to ¢4,785,000.00 - 20%
- any amount over CR ¢4,785,000.00 - 25%
Income from foreign sources is not taxed, and offers then a considerable advantage for people retiring to Costa Rica. Income from a regular job is exempt up to CR ¢215,600, monthly. After that the rate is 10% for income up ¢324,100, and beyond that it's only 15%.
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