As of October 6, new provisions are in effect for those who buy or sell real estate in the country. The regulation establishes a two percent withholding on capital gains when the seller is domiciled in Costa Rica. In the case of non-domiciled persons, the two point five percent withholding already contemplated in the Income Tax Law is maintained.
There are important exceptions: the withholding will not be applied in the transfer of the habitual residence, nor in cases of donations, inheritances or contributions of real estate to the capital of national companies.
The buyer will be responsible for withholding and paying the tax, although the taxpayer remains the seller. In addition, the National Registry will not register any sale or purchase until the payment of the taxes is verified.
In short: new rules that change the dynamics of the real estate market and that everyone involved must be clear about to avoid delays and penalties.
This is a news service prepared by ICS. For more information about the story, write to info@ics.cr or call 2519-9992 ICS, tax specialists.