The Costa Rican Tax Authority recently issued Resolution Nº MH-DGT-RES-0039-2025, which introduces new tax rules affecting real estate transactions. These changes are especially relevant for foreigners who are thinking about buying or selling property in Costa Rica.
Tax matters can be complex, but our tax expert Mariela Hernández will unpack this new regulation, so you can stay on top of things.
Withholding taxes on property transfers
For every registered property transfer:
- If the seller is a tax resident, the buyer must withhold 2% of the total sales price as an advance payment toward capital gains or income tax. If no taxable gain is generated, the seller may later request a refund from the Tax Authority.
- If the seller is a non-resident, the buyer must withhold 2.5% of the sales price. The Resolution indicates that this as a final tax. However, the law classifies it as an advance payment toward the seller´s overall total tax burden, thus creating a potential legal inconsistency.
“Regardless of the scenario, it is always the buyer’s legal responsibility to withhold and remit the tax,” Mariela added.
Who is qualifies as a tax resident?
For tax purposes, individuals are considered residents if they spend 183 days or more per year in Costa Rica. Local corporations, registered branches of foreign companies, and foreign companies with a permanent establishment in Costa Rica are also treated as tax residents.
“Non-residents are those who do not meet these criteria or foreign companies without a registered branch, representative, or permanent establishment in the country,” explained Mariela.
When withholding does not apply
Withholding does not apply when the property is the seller’s primary residence, or when it is transferred due to an inheritance, legacy, or donation, or when it is made as a capital contribution to a company.
However, the rule does apply to indirect transfers, where a buyer acquires the shares of a company that owns the property rather than the property itself. In other words, buying the corporation instead of transferring the property deed does not exempt you from this tax.
Filing and payment deadlines
Withholdings (2% or 2.5%) must be filed and paid within the first 15 calendar days of the following month after the closing date.
“All filings and payments will be made through the new online system TRIBU-CR, which will launch officially on October 6, 2025,” Mariela commented.
Non-compliance consequences
“Late filing or payment will trigger interest and penalties. In addition, the National Property Registry will not register a transfer, unless taxes and withholdings are fully paid.
If you are buying or selling property in Costa Rica, you must take into account these new withholding requirements. Buyers are legally responsible for the retention and payment of the withheld taxes, while sellers should review whether they are entitled to request a refund, or if they owe any additional capital gains or income taxes on the property sale.
Our team is here to guide you through these changes and ensure your property transactions remain compliant with Costa Rican tax law.