No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeArchiveGov’t Prepares for Property Appraisal Project

Gov’t Prepares for Property Appraisal Project

As the government prepares for a longoverdue nationwide assessment of property values, a lack of municipal resources promises to gum up the process, officials say.

Municipal impotence, combined with a proposed law that would give the government power to fine property owners who declare values below their assessed value, have the real estate industry reeling.

“Municipalities assign very general values. They don’t go out to the properties to assess them … they valuate them from their desks,” said Emilia Piza, president of the Costa Rican Chamber of Real Estate Agents.

Marietta Montero, director of the Technical Norms Organ of the Finance Ministry, said municipalities not only lack human resources to go out and assess property values, but the information they rely on is riddled with errors. They base tax rates on that flawed information.

“They don’t have qualified engineers …and they bring in errors from the public registry. They are using legal information of a property instead of the physical information (to assess value)” Montero told The Tico Times.

Montero said that the Finance Ministry hopes to begin a new process of assessing property values as soon as November, a process that could be finished by the end of 2007, she said, adding that approximately 70% of properties in the country have not been appraised in nearly a decade.

She explained the government is in the process of contracting a Canadian company for a $1.4 million project to assess the real estate market in Costa Rica. The company –which has yet to be named – will be responsible for general assessment in which it redefines pricing zones and establishes price values in those zones. Then, Montero explained, it will be up to the municipalities to send appraisers out to each property in those zones and do individual property assessments.

But “very few (municipalities) go out and do a good valuation,” she said, adding that a law passed in 1997 put the responsibility of individual assessments in the hands of municipalities.

Vladimir Pérez, civil engineer for the Municipality of Golfito in southwest Costa Rica, said the municipality has barely assessed a third of the properties in the canton.

“We need to have the resources required to do the job,” he said. Nearly a quarter of all municipalities, including Golfito, don’t even have an office of property valuation as required by the law.

Every five years, property owners are expected to declare the value of their property. However, municipalities have the power to conduct an expert appraisal and levy property taxes based on that result.

The current property tax is 0.25% (¢2,500) per million colones per year (25 cents per $100).

A proposal in Congress, which is part of the Arias administration’s nine-part fiscal reform plan, will tax “luxury” properties valued at more than ¢100 million ($193,000), with a 0.25% additional annual tax on the value exceeding ¢100 million. The revenue would be put toward eliminating Costa Rica’s sprawling shantytowns.

Under the new tax proposal, the Finance Ministry would also be given the power to fine property owners who declare values below the assessed values, a measure that has enraged many real estate owners.

“The whole world will try to get a lower value on their house,” said property owner Arturo Lizano, who is also the former president of the Union of Private-Sector Chambers and Associations (UCCAEP), which represents 41 private business chambers.

Lizano called the luxury tax “a slap in the face to the middle class,” adding that with skyrocketing real estate prices, ¢100 million is no longer a luxury home. In a few years, it will just be a middle-class home, he said.

Montero said property owners have the right to challenge the assessed value assigned to their property.

She said a property owner can complain at the municipal level with the municipal office of valuations or to the Municipal Council.

At the national level, she said property owners can complain before the

Administrative Fiscal Court

or the

Contentious Administrative Court

.

 

Trending Now

Costa Rica Identified as Key Maritime Route for Cocaine Trafficking

Costa Rica appears among the main maritime and aerial routes for cocaine trafficking between South and North America, according to the World Drug Report 2025 published...

Fishing, Wildlife, and History in Costa Rica’s Barra del Colorado

Costa Rica’s Barra del Colorado is a magical and charming town. It’s one of the country’s hidden gems, best known for its world-class sport...

Costa Rica Pushes USA to the Brink but Falls in Penalty Heartbreak

If you just caught the end of the USA vs. Costa Rica Gold Cup quarterfinal, you probably feel like you need another cup of...

Costa Rica’s Rare Birds at Risk as Human Activity Threatens Extinction

Costa Rica’s bare-necked umbrellabird, a striking black bird with a red throat pouch and crest, is in trouble. A new study in Nature Ecology...

Why Costa Rica Feels Like a Safe Haven for This Longtime Expat

If someone asked me to sum up why I live in Costa Rica in 5 words or less, my answer could well be: “It...

Celso Gamboa Allegedly Ran Drug Ring with Costa Rican Government Ties

Celso Gamboa, once Costa Rica’s Security Minister and a Supreme Court judge, now faces extradition to the U.S. for leading a major cocaine trafficking...
Avatar
spot_img
Costa Rica Tours
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait
Costa Rica Travel

Latest News from Costa Rica