The Costa Rican Government has come over all Robin Hood and is taking from the rich to give to the poor, introducing a new ‘luxury home tax’ in a bid to eliminate the rash of shanty towns in the country…
The value of Costa Rican property is highlighted by the Government terming houses over the price of 100 million Costa Rican colons (£121,160) ‘luxury.’
The new tax, which to give it its full name is the ‘Solidarity Tax For the Strengthening of Housing Programs,’ will be levied on homes valued at more than the aforementioned amount and the proceeds will go towards the fight to eliminate shanty towns in Costa Rica.
The new tax, which has been put in place for ten years, is expected to raise around $45 million a year, with every last penny going towards building affordable housing for low income families to help them out of the shanty towns.
Costa Rica has around 390 shanty towns – settlements which are sometimes illegal or unauthorized and crowded with improvised dwellings made from scrap plywood, corrugated metal, and sheets of plastic.
The towns, which are also known as favelas, are usually built on the periphery of cities, often do not have proper sanitation, electricity, or telephone services.
Despite Government estimates putting the number of families living in inadequate housing in Costa Rica at 40,000, poverty in Costa Rica is nowhere near as extensive as neighbouring countries, such as Nicaragua.
Many other Central American countries have poverty that is far more pronounced that it is in Costa Rica. The well established Government in Costa Rica means that they could introduce this tax aimed at helping the poor, whereas neighbouring countries don’t have such assistance.
How much luxury tax one must pay depends on the value of the home. When the value is calculated, only the actual property is taken into consideration, not the land on which it is built.
As there are not that many homes which are classed as ‘luxury’ in Costa Rica, the majority of homeowners won’t have to comply with the new tax. According to the National Registry, the new tax will only affect around 6,000 homes.
Properties that are valued at between £121,160 and £906,000 will be charged 0.25 per cent of their market value, with the tax increasing in stages with the properties’ value. The top tax band of 0.55 per cent will be levied on those homes worth over £2.1 million.
Inspectors will be sent round to check that property owners have paid the correct amount of tax and declared it to the tax authority. It would be paid once a year on January 1st.
For more information on Costa Rican properties and the market in general, please visit http://costa-rica.themovechannel.com/
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