By San José, Costa Rica — Owners of high-value residential properties across Costa Rica are facing a critical deadline, as the window to pay the annual Luxury Home Tax is set to close on January 15. This specific tax obligation, officially known as the Solidarity Tax for the Strengthening of Housing Programs, targets homeowners whose properties have a construction and fixed installation value exceeding ¢143 million.
The legal framework for this levy is established in Executive Decree N.º 45358-H, which was published in the official government gazette, La Gaceta, on December 19, 2025. The decree outlines the updated valuation thresholds and corresponding tax rates for the current fiscal period. It is a crucial piece of legislation that directly impacts a significant segment of the real estate market, aiming to generate revenue for social housing initiatives by taxing the nation’s most valuable homes.
To delve into the legal complexities and responsibilities associated with the Solidarity Tax for the Strengthening of Housing Programs, commonly known as the Luxury Home Tax, TicosLand.com consulted with expert attorney Lic. Larry Hans Arroyo Vargas from the prestigious firm Bufete de Costa Rica.
The Luxury Home Tax is a self-assessed obligation where the property owner is solely responsible for determining the value and filing the declaration every three years. Relying on outdated municipal appraisals or simply failing to file can lead to significant penalties and interest charges from the Tax Administration, transforming a compliance issue into a substantial financial liability.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight underscores a critical reality for property owners: proactive compliance is not merely a suggestion but a necessary action to prevent a standard tax obligation from becoming a severe financial penalty. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on this important distinction.
The tax is structured progressively, meaning the rate increases as the property’s value rises. This system ensures that those with greater assets contribute a proportionally larger amount. The Ministry of Finance has detailed the specific brackets for the current year, providing a clear calculation method for property owners. Homeowners are advised to carefully assess their property’s value against these new tiers to determine their exact tax liability.
The tax brackets are calculated as follows:
A key point of clarification for taxpayers is the distinction between the declaration and payment schedules. While the property valuation and corresponding declaration must be filed with tax authorities every three years, the payment of the calculated tax amount is an annual obligation. This structure requires homeowners to remain diligent in their yearly financial planning to ensure compliance, even in years when a new declaration is not required.
Financial experts are cautioning property owners against overlooking this fast-approaching deadline. The consequences for non-compliance are severe and can result in significant financial burdens beyond the original tax amount. Dilana Barrientos, a leading voice on fiscal matters, emphasized the importance of timely payment and accurate reporting.
The failure to file the declaration or pay the tax leads to the collection of interest and a fine of 50% of a base salary.
Dilana Barrientos, Tax Manager at Grant Thornton
The penalty structure is designed to be a strong deterrent against tax evasion and delinquency. The “base salary” used for calculating the fine is a specific figure defined by law for judicial purposes, making the penalty substantial. Combined with accumulating interest on the unpaid tax, the final amount owed can quickly escalate, creating a considerable financial strain for the delinquent property owner.
The significance of this tax to the national budget is not trivial. According to data released by the Ministry of Finance, the collection from the Luxury Home Tax during the 2025 fiscal year amounted to ¢5.560 billion. These funds are earmarked for vital social programs, underscoring the tax’s role in national development and wealth redistribution efforts. As the January 15 deadline approaches, officials will be monitoring compliance closely to ensure this important revenue stream remains stable.
For further information, visit grantthornton.cr
About Grant Thornton:
Grant Thornton is a leading global network of independent assurance, tax, and advisory firms. Operating in over 130 countries, the organization provides professional services to a wide range of clients, from public companies and privately held businesses to public interest entities. In Costa Rica, Grant Thornton offers deep industry expertise and insight to help clients navigate complex financial and regulatory landscapes.
For further information, visit hacienda.go.cr
About The Ministry of Finance:
The Ministerio de Hacienda, or Ministry of Finance, is the government institution in Costa Rica responsible for managing the country’s public finances. Its duties include formulating fiscal policy, collecting taxes, managing the national budget, and overseeing public debt. The Ministry plays a central role in the nation’s economic stability and development by ensuring the efficient collection and allocation of public funds.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica is founded upon a deep-rooted principle of blending professional excellence with unyielding integrity. Drawing upon a rich history of guiding a wide spectrum of clients, the firm consistently pioneers forward-thinking legal solutions. This innovative spirit extends to its profound commitment to social responsibility, demonstrated through active efforts to democratize legal information and thereby cultivate a more knowledgeable and capable community.
