By José Pablo Ramírez Vindas
and the A.M. Costa Rica staff
The nation's property owners are being hit with soaring tax bills because the real estate boom has created sky-high prices that have filtered down to their homesteads and businesses. The nation's taxing authority is using those high prices to adjust upwards the assessments on which the quarterly tax bills are based.
Nowhere is this more evident than in the Municipality of Cóbano at the tip of the Nicoya Peninsula, Residents there are dumbfounded at the new tax bills.
José Eladio Cortés Castrillo, the municipal mayor, said that the Ministerio de Hacienda studied 54 properties and established values that mean taxes some 1,600 percent higher, particularly for those owners who hold concessions in the zona maritima terrestre, the area between 50 and 200 meters from mean sea level.
The mayor said that a representative from the ministry's Tributación tax agency in Puntarenas visited and later unveiled the new values on which tax assessments are to take place just a week and a half ago.
In the maritime zone the tax rate also fluctuates, the mayor said, based on the value of the property and the use to which the concession land is put. So those with concessions are getting hit from two directions.
Concessions, managed and awarded by the municipality and the Instituto Costarricense de Turismo, are like long-term leases which allow development but not ownership near the ocean.
Some residents report that their bill shows a tax rate of from 2 to 4 percent of assessed value.
The mayor said, as an example, the owner of a property of 1,400 square meters (about a third of an acre) used to pay about 150,000 colons per year. That's $300 at today's exchange rates.
Now with the new value, the annual tax bill is about 3.3 million colons or about $6,600, said the mayor.
He ought to know. He, too, holds a concession, according to his neighbors.
Long-time residents, many of them North Americans and Europeans, are used to paying tiny tax bills. They are up in arms and warn that the Tributación calculations could destroy resale values in Costa Rica. They live in communities like Mal País, Santa Teresa and Montezuma. Many have lived there for years.
Mayor Cortés said that similar changes in value are taking place in Garabito where Jacó is located. There, he said, a square meter of land is valued at about $240 while in Cóbano the value is just $150 according to the calculations by the ministry's functionaries. A square meter is a bit less than 11 square feet.
Similar increases in property values have taken place in inland areas such as La Garita, but the changes in beach communities are more dramatic because of the original low values and the triple digit hikes in selling prices.
The mayor said that there is an appeal process for those who think their values are too high. They can have a hearing before the Consejo Municipal.
Some residents report that a neighbor got a tax bill of $35,000. And some of them have contacted lawyers to see what relief they can get. The Arias administration is seeking to increase the income from real estate as well as earnings. However, legislation in this area has been stalled by the battle over the free trade treaty in the Asamblea Legislativa.
The reassessments, tax rates and higher taxes are believed based on establish law that is just now being enforced. Plus the tax system is based on the assumption that if one property sells for a certain amount, all similar properties have about the same value. Property owners have the option of reporting the value of their property each year to municipal officials, but few ever volunteer that their properties have increased in value, so Hacienda representatives do surveys of sales and attempt to establish values.
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