Purchase House in Costa Rica

How Much Is a House in Costa Rica Worth?

Want to know if you’re getting a fair shake when you buy property in Costa Rica? It may soon be easier to compare houses prices.

The Ministerio de la Hacienda (finance ministry) in Costa Rica plans to assess and update values for all houses and properties nationwide.

The ministry is looking to bring its “values platform” (a central listing of property values that hasn’t been revised for a decade) into the 21st century with the help of a specially contracted company to update house values and two others to update cadastres (the official records of house boundaries, features, and values). The values platform is meant to aid municipalities in assessing house taxes.

Many landowners undervalue their houses (some municipalities have found large, valuable houses registered for less than 1 cent), although the ministry estimates most houses are assessed at 20% to 25% of their true value.

The revaluation project aims to bring house values up to around 50% of market value, which would double property taxes for many landowners, but also provide cash-strapped local governments with double the tax income. (But house tax in Costa Rica is low anyway -only 0.25% of the recorded value of the property- so if your house has a registered value of $100,000, right now you’re paying $250 per year.)

The company contracted to update values, Roche Argentina, has begun the first phase of the project, aimed at revising values in “homogonous zones,” areas where price-per-square-meter varies little from one house to the next. It expects to finish this phase by April 2008 and make house values accessible to the public via the Internet. The goal is to have the platform completely updated by 2009.

The revision of cadastres is expected to begin soon. More than 510,000 properties will be visited to make sure the houses match up with what is registered in each cadastre.

The end result of all this? House owners may soon be paying higher housey taxes…although, as We said, tax rates are still low in Costa Rica. The good news, though, is that having a searchable database and standardized price comparisons will help you research your next house purchase in Costa Rica.