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Costa Rica Suspends Property Tax for Six Months

Article Summary:

For the next six months Costa Rica will suspend the tax on legal persons, those inactive companies (usually used by real estate development companies) from the tax on transfer of real property. Tax on transfer of real property corresponds to 1.5% of the value reported in the deeds of good. This tax is usually canceled by the buyer of the property and collected by the National Register.

Original Article Text From El Financiero via Google Translate :

Transitional Act Makes it Cheaper Sale of Real Estate

For six months from the effective date of the tax on legal persons, those inactive companies (usually used by real estate development companies) shall be exempt from tax on transfer of real property for a period of six months.
This was stipulated in the transient V of the Act 9024 (Tax on Legal Persons) which will come into effect from next April.

Tax on transfer of real property corresponds to 1.5% of the value reported in the deeds of good. This tax is usually canceled by the buyer of the property and the collector is the National Register.
For the same period should not be taken to cancel the stamps for such transfer. To counsel the firm D & N Luis Alberto Pereira, this provision may have more economic significance than the same tax on legal persons, which annually just cancel about $ 400 per year.

By contrast, a single transfer of a property with a value of $ 750,000, the state would receive a total of $ 14,583. For the Ministry of Finance, however, the fiscal impact of transition V of the Act is not sensitive to public finances. Treasury’s argument is that the inactive companies that own real property (lots, or townhouses) transfer tax paid when the same segregated in the field. Payment in advance Taxation said the transfer tax payment in advance is a common practice has been conducted in order to expedite the transfer to final buyers.

Consequently, the Treasury said that the exemption does not substantially change the current situation. However, the segregation of land Pereira register a transfer but it certainly does not mean that replaces the transfer after the sale of the property.

This latest version supports the position of President of the Chamber of Real Estate Owners, Bernardino Bravo, who said the transition will greatly lowers the cost of the transaction. “We only have to collect attorneys’ fees” he said.
Bravo also said it is common practice that for each lot for sale create a corporation, which means that many of these future sales of corporate property will be inactive and therefore exempt from transfer tax. In counsel’s view of the firm D & N for these developers from April will be cheaper to sell a property registered in a society that has been inactive for the past two years.

Link to Original Article:

From El Financiero

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