Luxury Tax gets extended....what you should know.

According to the most recent Tico Times newspaper, the deadline for paying luxury tax or the "solidarity tax" on homes valued over $172K has been extended until mid January. Many people have elected not to pay due to very complicated rules for paying, including having to measure the dimensions of your home all the way down to the size of your door frames. While these people run the risk of paying a fine of up to ten times the amount they owe, the feeling is that so many people are going to hold out that it may not matter, and the system will have to be totally overhauled if they want anyone to pay.

Apparently, it was previously impossible to pay the tax if you didn't have a cedula number. This meant that anyone without residency had no way to pay. This past week, it was made possible to wire the money directly from a foreign account, to an account made here with a Costa Rican bank that is specifically made for this purpose.

So again, consult with your attorney. While this tax is designed to help revive the inhabited slums of Costa Rica, there are quite a few unhappy foreign homeowners out there trying to deal with this new tax for its complexity. Nobody is in disagreement about paying it, as the amount is relatively small. However, it does seem that something needs to be done about the ease of paying it, and the threats of punishment to those who are having trouble paying it.

See you in the water,

Andrew