Potential Changes in the Application Requirements and Benefits
for Costa Rica Residency
An interesting article appeared in the August 21, 2020, edition of the Costa Rica newspaper, “La Republica”. Two legislators from the National Assembly have proposed some significant changes to the Investor (Inversionista) Residency Category and some tax benefits affecting all of the Residency Categories, including Pension Recipient (Pensionado) and Investment Income Recipient (Rentista) Categories. These proposed changes are being introduced to the Legislature, in order to attract additional Residency Applicants to Costa Rica.
The change proposed for the Investor Residency Category is that the investment amount required to qualify the Applicant, be reduced from the current $200,000.00 U.S., to $150,000.00 U.S. This would have the affect of opening this Residency Category to many additional would-be Applicants.
In addition, there are proposed tax changes for residency Applicants in all of the Residency Categories, which would reduce the amount of the Property Transfer Tax of 1.5% of the property purchase price on any real estate purchased by a Residency Applicant by 20% of the tax assessed amount.
Likewise, the proposal includes a tax and duty exemption on the importation of all household effects and a vehicle for personal, or family use.
The proposal includes that such modifications to the existing laws, would be in effect for a period of five years from the date that the modifications are enacted by the Legislature.
Although this proposal has a long way to go before becoming law in Costa Rica, the Government is seeking ways to off-set the significant economic losses sustained by the Country during the Covid Crisis. Accordingly, in my opinion, this proposal, or some variation thereof, has a very good chance of being successful in the Legislature, probably sooner, rather than later.
