Costa Rica Coffee Guide

Delinquent Luxury Home Taxpayers Face Big Fines

January 29, 2010

The estimated 7,000 homeowners who missed the Jan. 15 deadline for paying taxes on their homes valued at ¢100 million (nearly $179,000) or more in Costa Rica face fines amounting to 10 times the original tax.

The Tax Administration is not backing down on its requirement that owners of every luxury home in the country file and pay the proper taxes and has pledged to confront delinquents in the coming months with “an order to pay.”

Finance Minister Jenny Phillips said the low number of filers is evidence “that taxpayers in this country are not educated in paying taxes.”

She added, “We have been announcing this everywhere. Nobody in this country can argue that they didn’t know about the law.”

Legislators approved the luxury home tax law in October 2008 as a means to raise money for housing for the poor. Known as the impuesto de solidaridad (solidarity tax), financial experts expect the tax to raise as much as ¢12.5 billion (almost $22.4 million) a year.

The original deadline for the first payment was Dec. 31, but flaws in the system led officials to extend the deadline to Jan. 15. Responding to claims that filing under the new law is too complicated, Phillips said, “This ministry administers taxes. (They are) taxes that are complicated. We would be lying if we didn’t say the following: The majority of taxpayers have to look for specialists.”

Alluding to the supposition that such taxpayers have sufficient money to hire help, she said, “This tax is directed at people who have homes valued at more than ¢100 million. … Those who haven’t presented their declaration have not done so simply because they don’t want to.”

–Chrissie Long

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