Declaring the value... be honest?
There are some interesting developments regarding the declaration of real estate values in Costa Rica.
Property owners have long benefitted from an antiquated system of land valuation. The benefit came from the fact that there is no process for re-evaluating the property, save for if the property owner hired a qualified appraiser to evaluate the property. There has been little incentive to do this since by leaving the current appraised value at say, the 1973 evaluation that was done, the yearly tax on the property was nearly non-existent.
The issue that interests us now is the law that is on the boards to evaluate the property gains tax upon sale of a property. Lets say that your 15 acre, ocean view, walk to the beach, Costa Rica property has a current appraised value of $5,000, and you are enjoying paying the essentially non-esistent tax on that property. So then you sell the property for $350,000 dollars. You will be paying a capital gains tax on the difference between $5,000 and $350,000. Now the official declared value is of intense interest to Costa Rica property owners. More to come...
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