How Much Is a House in Costa Rica Worth?

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Learn more about Costa Rica in International Living Postcards--your daily escape

Tuesday, Oct. 16, 2007

Want to know if you’re getting a fair shake when you buy property in Costa Rica? It may soon be easier to compare property prices.

The Ministerio de la Hacienda (finance ministry) in Costa Rica plans to assess and update values for all property nationwide.

The ministry is looking to bring its “values platform” (a central listing of property values that hasn’t been revised for a decade) into the 21st century with the help of a specially contracted company to update property values and two others to update cadastres (the official records of property boundaries, features, and values). The values platform is meant to aid municipalities in assessing property taxes.

Many landowners undervalue their properties (some municipalities have found large, valuable properties registered for less than 1 cent), although the ministry estimates most properties are assessed at 20% to 25% of their true value.

The revaluation project aims to bring property values up to around 50% of market value, which would double property taxes for many landowners, but also provide cash-strapped local governments with double the tax income. (But property tax in Costa Rica is low anyway--only 0.25% of the recorded value of the property…so if your property has a registered value of $100,000, right now you’re paying $250 per year.)

The company contracted to update values, Roche Argentina, has begun the first phase of the project, aimed at revising values in “homogonous zones,” areas where price-per-square-meter varies little from one property to the next. It expects to finish this phase by April 2008 and make property values accessible to the public via the Internet. The goal is to have the platform completely updated by 2009.

The revision of cadastres is expected to begin soon. More than 510,000 properties will be visited to make sure the properties match up with what is registered in each cadastre.

The end result of all this? Property owners may soon be paying higher property taxes…although, as I said, tax rates are still low in Costa Rica. The good news, though, is that having a searchable database and standardized price comparisons will help you research your next house purchase.

Suzan Haskins

The Latin America Insider, International Living

Related articles:

- How to Get a Home in Costa Rica for Less Than $100,000

- Save $30,000 on Dental Costs in Costa Rica

- The Secret Side of Costa Rica

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