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(506) 2223-1327              Published Monday, Nov. 2, 2009,  in Vol. 9, No. 216      E-mail us
Jo Stuart
Real Estate
About us

Luxury home tax fine can be 10 times the tax
By Angela Jimenez Rocha*
Special to A.M. Costa Rica

Foreign nationals should be especially careful about the new luxury home tax (casa de lujo in Spanish) because Tico attorneys and accountants have expressed confusion about how this new law affects owners.  The penalty for not filing is 10 times the tax and five times the tax if the declaration is not within 10 percent of what the Hacienda determines.

Particularly complex is valuation of a condo.

There are three different steps to value a condo, inside construction of each unit, the common area improvements and the land.

In order to address the issue of condo owners it is unclear in the law who is to determine the value of the common area improvements and the land which is separate than the improvements.  The safest way is for the administrator to hire a certified appraiser who has no vested interest as an owner to make two separate appraisals, one for the improvements like swimming pools, streets, elevators, walls, etc. and another for the land.

Any condo unit which meets or exceeds the 100 million colon threshold, which includes each individual condo’s percentage of the improvements, also must then must determine the percentage of the land value as step three.

We have had administrators of several high profile condo associations asking my advice on what they should do.

My opinion is there is a huge risk if the adminstrator of each condo does not assume responsibilty to make this valuation so each owner uses the same value for common areas.  The reason is if each individual owner does this and there are many different valuations, Hacienda may start an investigation against any owner.
The next step is determing which type valuation to  use of the many listed by Hacienda. This is very complex for those who are not versed in the techincal language of construction and architecture.  There are different types for single-family houses, condos, hotels, etc.   There are various valuation directions just for the different types of construction of concrete blocks and beams, window types, luxury bathrooms and similar.

In order to make the declaration, each owner must
file this digitally with the Hacienda and list the number of the plano catastrado, escritura constituion which list each condo units percentage of the finca madre or larger project, and be inscribed in Tributacion Directa as a taxpayer. They also must list from which bank the owner authorizes Hacienda to deduct the tax.

The values for the land are listed for some municipalities but not all of them so far as can be determined now.  For instance in setting the Escazú land values, the agency has the Muliplaza area listed as approximately $1,000 per square meter but Cerro Alto as $256 per square meter, which may be considered low versus current values.

The typical charge required for an appraisal by a licensed member of the Colegio de Architects and Engineers for 100 million colons is approximately $1,028.  This is required every three years from reading the Hacienda information, so owners should not have to pay for a new appraisal every year.

One of the most important items is the official depreciation chart which helps owners pay less tax by lowering the declaration required of the construction value, and it is vital to understand how this affects the values.

* Angela Jimenez Rocha is a licensed architect and has worked as an appraiser for banks and individuals for the last 23 years and can be contacted by visiting She has written this explanatory article at the request of A.M. Costa Rica because of her special knowledge.

Sharp buyers will consider tax when making offer
By the A.M. Costa Rica staff

What is hard to determine now is the effect Costa Rica's new luxury tax law will have on real estate values.

The law went into effect Oct. 1 at a time when real estate experts thought that the troubled national real estate market was showing signs of recovery.

The law assesses a special, non-deductible tax on homes worth more than 100 million colons based on a complex system established by the Dirección General de Tributación, the tax collector. The computed values have no relationship with sales price or actual value. Tributación followed the law and is using replacement cost new less depreciation. This is a system that usually is used to determine estimated value for unique structures for which the comparison method cannot be used.

When a knowledgeable real estate customer looks at a property he or she will want to know the tax value computed for Tributación. And that amount will have an impact on what potential buyers are willing to pay.

A home with a computed value including land of about $225,000 will be subject to a $562.50 annual tax in addition to the taxes levied by the municipality.

A home computed to be worth $300,000 will be subject to an $800 tax. And a luxury home
computed to be worth $650,000 will be subject to a $1,900-a-year tax.

The taxes are not deductible for income tax purposes in Costa Rica, but they might be deductible in other countries. The luxury tax does not apply to vacant land or structures that are not used as dwellings. The tax goes with the home so that if a naive buyer obtains a home on which the tax has not been paid, he or she probably will be required to pay the outstanding amount, perhaps with a fine.

A savvy real estate seller will want the person closing the sale to prorate the tax so that the seller gets a refund from the buyer for the unused portion of the tax. The tax is payable every January, although this year, the tax collectors are expecting four months worth of tax from 2009 because of the date the law went into effect.

Tributación has not made any effort to educate the public about this tax, even though fines can be 10 times what should have been paid but was not. In the case of a $650,000 home, a foreigner who is unaware of the tax could be assessed a $19,000 fine for failing to file the required papers and making the payment.

A.M. Costa Rica has created a special page where readers can see immediately prior stories on this topic. Editors plan to add to the summaries and links as other news stories are published. It can be found here: luxurytaxpage.htm.

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San José, Costa Rica, Monday, Nov. 2, 2009, Vol. 9, No. 216

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Power outage causes delay
in posting this newspaper

By the A.M. Costa Rica staff

Today's edition of A.M. Costa Rica appeared five hours late because a power outage took place in the northeastern section of San José where the online newspaper is produced.

The Compañía Nacional de Fuerza y Luz said that much of the delay was caused because technicians who work on the underground wiring do not begin work until 7:30 a.m.  However, the power was back on by 6:15 a.m.

The outage took place at 12:35 a.m., a peak time for producing the newspaper. Only a few blocks in Barrio Otoya and Barrio Aranjuez were involved but both offices of the newspaper are in that section.

Farmers will hear
El Niño possibilities

By the A.M. Costa Rica staff

Farmers in the northern zone will have a chance to attend seminars about the probable effects of El Niño in their area.

The events, Thursday and Friday, are being put on by the Ministerio de Agricultura y Ganadería. The first will be in Las Delicias Upala at the Asociación de Productores de México de Upala. The second will be in Los Chiles.

The audience is expected to be mainly bean farmers.

El Niño is a temperature change in the mid-Pacific that generally causes a dry season in Costa Rica and wet weather elsewhere.

Banco Nacional plans
to sell insurance policies

By the A.M. Costa Rica staff

Banco Nacional is entering the local insurance market as BN Sociedad Corredora de Seguros. The insurance arm received approval from the regulating body, the Superintendencia General de Seguros, the bank said.

The local insurance market has been opened up to competition by law, in part to conform to the Central Aemrican Free Trade Agrement. The announcement said that the bank would sell all types of policies.

Our reader's opinion
Jo Stuart uses deception
to present liberal views

Dear A. M. Costa Rica:

About an hour ago, I sent you and Ms. Stuart an e-mail relaying my displeasure with her article today titled “The decision has been made to go back to the books.”  Good title.  It suggests that something recent in her life triggered a desire to return to school, great.  However,  the first two paragraphs in her article have absolutely nothing to do with the title and is nothing other than an attempt to lure in readers to listen to her radical liberal views and beliefs.

Now, let’s discuss her content in those two paragraphs, particularly, this sentence:  “I felt more sympathy for the illegal immigrants in the U.S., especially the children who crossed the border, often on their own, and were put in detention centers to wait for hearings about whether their fate would be to stay or be deported.”  Wow!  It was 5 a.m. when I read that, and it is now 9:30 and I’m still fuming over that sentence.  

First of all, good for her for using the words “illegal immigrants” and not some lollypop and sunshine liberal term, such as “asylum seekers.”  However, this reader wonders if Ms. Stuart has as much “sympathy” for the hundreds of American citizens and legal immigrants who are victims of crimes, including murder, committed by illegal immigrants in the United States?  Anyone can simply google “crimes committed by illegal immigrants” to see the number of murders, robberies, assaults, rapes, and other crimes committed by illegal immigrants.  Laws are made for a reason.  Any person who desires to visit, live or work in the United States must follow all laws, including immigration laws.  It’s that simple.

After my 30-minute “Jo Stuart” rant, I finished her column, which makes a weak attempt at trying to tie the message of her article to her opening statement.  Some of us are not fooled by your deception, Ms. Stuart.  It is quite clear you push a liberal agenda.  But, instead of coming right out and saying it, you use trickery.  Your message is quite clear: 1.) sympathy for illegal immigrants, 2.) no need for medicine – just eat better-give up certain foods – you’ll feel better-trust me-it’s for your own good,  & 3.) volunteer-it’s mandatory.

I will no longer read Ms. Stuart’s column and many of the liberals reading this are saying “no one forced you to read this one.”  They are correct.  I do not have a problem reading, listen, or discussing different views.  I do have a problem with someone using deception to get their point across.  With this letter, at least the reader clearly understands where I stand.

Pam Cohen

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A.M. Costa Rica

users guide

This is a brief users guide to A.M. Costa Rica.

Old pages

Each day someone complains via e-mail that the newspages are from yesterday or the day before. A.M. Costa Rica staffers check every page and every link when the newspaper is made available at 2 a.m. each weekday.

So the problem is with the browser in each reader's computer. Particularly when the connection with the  server is slow, a computer will look to the latest page in its internal memory and serve up that page.

Readers should refresh the page and, if necessary, dump the cache of their computer, if this problem persists. Readers in Costa Rica have this problem frequently because the local Internet provider has continual problems.


The A.M. Costa Rica search page has a list of all previous editions by date and a space to search for specific words and phrases. The search will return links to archived pages.


A typical edition will consist of a front page and four other newspages. Each of these pages can be reached by links near the top and bottom of the pages.


Five classified pages are updated daily. Employment listings are free, as are listings for accommodations wanted, articles for sale and articles wanted. The tourism page and the real estate sales and real estate rentals are updated daily.

Advertising information

A summary of advertising rates and sizes are available for display and classifieds.

Contacting us

Both the main telephone number and the editor's e-mail address are listed on the front page near the date.

Visiting us

Directions to our office and other data, like bank account numbers are on the about us page.

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Costa Rica
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San José, Costa Rica, Monday, Nov. 2, 2009, Vol. 9, No. 216

Monteverde firm pioneers tourist rail transport there
By the A.M. Costa Rica staff

While central government officials struggle with expanding the urban rail system, a private company has quietly set up a tourist rail service in Monteverde.

The company is Monteverde Trainforest, and passengers get a 90-minute ride on a 24-inch gauge rail car pulled by an LP gas engine. The trip covers eight kilometers, according to the firm's Web page. The equipment has the style of 19 century trains but on a smaller scale.

The British company that makes the train, Severn Lamb, was impressed that its full-loaded product can climb a 5 percent grade in Monteverde. The company sent two locomotives and six passenger coaches to Monteverde in May. The line opened officially July 1. Like most companies in Monteverde, the rail firm stresses the biodiversity that visitors will encounter.

The British firm also makes larger locomotives and specialized transportation equipment and monorail devices. The firm credited Francisco Chamberlain, the Monteverde owner, of realizing his 20-year-long dream of this type of service there. Each locomotive can pull up to 48 adult passengers.

There also is space for wheelchairs, the train company said.
Monteverde locomotives
Locomotives at rest in Monteverde

"The coaches are open wood effect paneled ensuring guests receive a true sense of the tropical environment while they are fitted with rain curtains for times when the forest lives up to its name, and rains!!" said the manufacturer.

The company is based in Santa Elena de Monteverde, and a release said that passengers are able to view the Volcán Arenal from the overlook. Some 60 percent of the trip is through forest, the firm said.

The company has another of those admission systems that charge foreigners more. Costa Ricans and residents pay 5,000 colons or about $8.65. But the price for each foreigner is $65. Foreign students pay $32.50.

Park guard detained as police confiscate six kilos of coke
By the A.M. Costa Rica staff

Four men, including one identified as a park ranger, have been detained as suspects in transporting six kilos of cocaine, the Fuerza Pública said.

The arrests Saturday came near the police checkpoint in Cahuita on the Caribbean coast. Two persons were on a quadracycle and two others were on foot, police said. Two persons fled when police sought to question them, officers
said. They left a  briefcase that contained the drug, police said.

One of the persons on the quadracycle was identified by the last names of Rocha Sandoval. Police said he was a park guard with the Ministerio de Ambiente, Energía y Telecomunicaciones. The man works in Guanacaste, police added. He is believed to be involved because his cell telephone was found on one of the men who fled, police concluded.

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San José, Costa Rica, Monday, Nov. 2, 2009, Vol. 9, No. 216

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Tiny shrimp become the topic of book on Río Térraba

By the A.M. Costa Rica staff

A book about fresh water shrimp has been produced as part of the environmental impact work for a hydro project in southwestern Costa Rica,

The work is being praised as a real addition to the knowledge about these crustaceans.

The Proyecto Hidroeléctrico El Diquís is a plan to erect a dam on the Río Grande de Térraba. The Río Térraba is the source of the stone that ancient residents turned into the enigmatic spheres that are unique to southwestern Costa Rica. The $1.8 billion project is controversial because it would flood land occupied by native Costa Ricans.

The results of the environmental study was distributed by the Instituto Costarricense de Electricidad, which is building the project.

The book includes an ecological study of the shrimp done by experts at the Universidad de Costa Rica, the Universidad Nacional and others. The book also discusses some of the problems facing the creatures. There are pollution problems and the use of inappropriate methods to trap the shrimp during the dry season, said the institute. There is a tradition of using poison to catch the shrimp for commercial gain.

The river mouth is considered a nursery for many small creatures that provide essential links in the food chain.
Shrimp study
Proyecto Hidroeléctrico El Diquís photo
Researchers seek out the shrimp at the mouth of the Río Grande de Térraba.

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San José, Costa Rica, Monday, Nov. 2, 2009, Vol. 9, No. 216

Casa Alfi Hotel

Optimism in Honduras
prevails over Zelaya pact

By the A.M. Costa Rica wire services

Media reports in Honduras say a power-sharing government between ousted President Manuel Zelaya and interim leader Roberto Micheletti is expected to be in place by Nov. 5.

Honduran officials say they are confident congress will approve the deal to reinstate Zelaya, just weeks ahead of the Nov. 29 presidential election.  Neither Zelaya nor Micheletti will run in the election.

Authorities say a date for the congressional vote on the agreement has not yet been set.

The breakthrough pact came late Thursday with Micheletti authorizing his negotiating team to sign the agreement, which he said marks the beginning of the end of the country's lengthy political crisis. 

The Honduran supreme court would need to authorize Congress to vote on whether to allow Zelaya to return to power and serve the remaining three months of his term. Among other features, the agreement includes an amnesty and shared governance by the opposing sides.

U.S. Secretary of State Hillary Clinton hailed the agreement as historic.

The Organization of American States issued a statement commending Zelaya and Micheletti for showing what it called flexibility and patriotic sentiment.

U.N. Secretary-General Ban Ki Moon said he hopes Honduras is now on the path to restoration of democratic, constitutional rule.

Zelaya was expelled from Honduras by troops June 28, with opponents accusing him of trying to illegally change the constitution to extend his term in office. 

The ousted leader secretly returned to the country in September and took refuge at the Brazilian Embassy, where he remains.

Castro blames U.S. embargo
for withholding flu drugs

By the A.M. Costa Rica wire services

Former Cuban president Fidel Castro says relaxed travel restrictions between the United States and Cuba have helped spread the swine flu virus.

In an opinion piece published Saturday in Cuba's state-run newspapers, the column attributed to Castro says the first cases of the viruses were brought to the island nation by visitors from other nations.  He says the virus spread the fastest among Cubans with relatives in the U.S.

Earlier this year, President Barack Obama eased restrictions on travel and financial transfers by Cuban-Americans to relatives still living on the island.

Castro says he does not believe the U.S. purposely spread the virus to Cuba, but he called it shameful that the U.S. trade embargo prevents his nation from procuring the drugs and equipment to fight the epidemic.

Earlier this month, Cuban health officials reported at least three people had died from the virus. The officials report some 2,100 pregnant woman were being treated for symptoms of the disease.  More than 110 of those women were in critical condition, the report said.

Despite the relaxing of travel restrictions, President Obama has refused to lift the trade embargo with Cuba.  His administration has said the embargo will remain in place as a way to push for democratic change on the Communist-led island.
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San José, Costa Rica, Monday, Nov. 2, 2009, Vol. 9, No. 216

Latin American news
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Non-Roman domain names
given approval by registrar

By the A.M. Costa Rica wire services

The organization that coordinates the world's Internet traffic has taken a big step toward a more multilingual Web. Internet domain names are about to start speaking local languages around the world.

The non-profit corporation Internet Corporation for Assigned Names and Numbers acts as a clearinghouse for Internet addresses around the world. It handles the details that make it possible to navigate the Web.

In Seoul on Friday, as expected, the organization's board approved what it says is the biggest change of the Internet since it was invented 40 years ago. It has agreed to introduce what it calls internationalized domain names to the Web. Up until now, Web users have had to type Web site domain names, the "dot com,"  using the Roman alphabet. Country codes, too, are written in the alphabet, such as "CN" in China or "KR" here in South Korea.

Soon, speakers of non-Western languages can begin typing domain names completely in their own scripts, such as Arabic, Cyrillic or Chinese characters.

Friday's vote represents only a first step. The registrar organization will begin by replacing two-letter country codes with native language alternatives. Replacing other domains, like the familiar "dot com" or "dot org" with native script will take longer.

Still, the organization's chief executive officer, Rod Beckstrom, says just getting to this point is a major milestone.

"Technically, politically, globally, internationally, culturally, I mean, the amount of work that's had to go on all over this world to push this project through is quite colossal," Beckstrom said. "And to watch it actually fall over the finish line, I think, is quite an emotional moment."

Internet experts say the new domain names may open up a whole new set of challenges, as governments seek to assert sovereignty over language domains. Rebecca Mackinnon is a Hong Kong University professor who specializes in Internet governance.

"If somebody who lives in Vancouver wants to register 'dot Tibet,' what's the process for objecting to that, if the Chinese government feels that's inappropriate? And who decides what's appropriate and what's not?" Ms. Mackinnon noted.

The Internet Corporation for Assigned Names and Numbers expects country codes in non-Roman scripts to start becoming available by the end of the year, and domain names will come into use next year.

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