Commission, VAT, closing costs, capital gains tax and withholding when you sell property in Costa Rica, with two net-proceeds scenarios.
Selling real estate in Costa Rica involves specific transaction costs, legal fees and tax obligations. To estimate your net proceeds accurately, you need to account for the real estate commission, value-added tax (VAT), closing costs and capital gains tax.
This is a breakdown of the main costs of selling property in Costa Rica. Rates and rules change, so treat the figures as a guide and confirm them with a Costa Rican attorney or accountant before you decide.
Quick summary: the total cost to sell
As a rough guide, the commission, VAT and a seller’s share of closing costs come to about 9% of the sale price. Capital gains tax, where it applies, and any corporate dissolution costs are added on top, so the total can be higher.
1. Real estate commission and VAT
The standard real estate commission in Costa Rica is about 6% of the agreed sale price. It is negotiable and set in your listing agreement.
- The commission rate: about 6%.
- Value-added tax (VAT): 13% VAT is applied to the commission amount, not to the property value.
Example: on a $500,000 sale, the commission is ~$30,000 and the 13% VAT adds ~$3,900, for a total of ~$33,900.
2. Shared closing costs
Closing costs in Costa Rica are often quoted at roughly 4.4% of the transaction value. They cover transfer taxes, notary fees, registry stamps and escrow fees.
- Standard practice: closing costs are traditionally split 50/50 between buyer and seller.
- The seller’s share: the seller usually pays about 2.2%.
Negotiation note: a full-price offer usually means a 50/50 split, while a buyer making a below-asking offer may be asked to cover more, even all, of the closing costs. The split is negotiable and some sellers and buyers divide the items differently, so write down who pays each cost in the purchase agreement.
3. Capital gains tax (impuesto a las ganancias de capital)
Capital gains tax applies whenever a property is sold at a profit. It was introduced by the Law for the Strengthening of Public Finances (Ley de Fortalecimiento de las Finanzas Públicas, Law No. 9635), effective 1 July 2019, and it applies to residents and non-residents alike on Costa Rican-source assets such as real estate, shares and securities.
Category A: primary residence (vivienda habitual)
- Exempt: a property is generally exempt from capital gains tax if it has been the seller’s primary, fiscal residence for at least the three years immediately before the sale. This is a duration-of-ownership requirement, not an annual day-count test.
- Frequency limit: the exemption can generally only be used once every three years, to prevent speculative or repeated use.
- Corporate ownership: the exemption can also apply if the property is held by a corporation (S.A. or SRL) and is demonstrably and exclusively used as the shareholders’ primary residence.
- Inherited property: real estate received through inheritance is also exempt from this tax, separately from the primary-residence rule.
Category B: investment property, lots and second homes
If the property is not a qualifying primary residence, the seller must choose between two ways of calculating the tax:
- The 2.25% rule (flat rate on the gross sale price). Available only for properties acquired before 1 July 2019, and only for the first sale of that property after that date. The seller pays a flat 2.25% of the total sale price, regardless of the actual profit. The election is generally irrevocable for each property: once used, the property can no longer be sold in the future using the transitional 2.25% option.
- The 15% rule (net gain). Mandatory for properties acquired after 1 July 2019, and the default rule generally. The seller pays 15% of the net profit: the selling price minus the original purchase price, adjusted, plus documented capital improvements, notary fees and other deductible costs.
Tip: the 2.25% flat-rate option tends to favour sellers with large, hard-to-document gains, for example land bought decades ago at a very low price, since 2.25% of the full sale price can be far less than 15% of the real gain. Sellers with modest appreciation, or good documentation of their acquisition cost and improvements, are usually better off with the 15% net-gain method.
Non-resident withholding (separate from the final tax)
Whichever method applies, when the seller is a non-domiciled (non-resident) foreigner, the buyer is legally required to withhold 2.5% of the gross sale price at closing and remit it to Hacienda (the Ministry of Finance) as an advance payment toward the seller’s final capital gains tax. If the amount withheld exceeds the tax actually due under the 15% or 2.25% calculation, the seller can file to request a refund of the difference.
Capital gains tax is self-declared and paid using Form D-162. Non-resident withholding is reported separately, using Form D-103.
4. Corporate dissolution costs (if applicable)
Many properties in Costa Rica are owned through a holding corporation, such as an S.A. or SRL. If you sell the property and then want to liquidate or close the corporation, attorney fees and corporate taxes for dissolution typically cost around $1,000. Ask your attorney for a quote.
Real-world math: seller’s net proceeds
These two scenarios apply the percentages above. They are approximate and for illustration only, not a quote or a tax calculation.
Scenario 1: sale of a $500,000 property
Assumptions: qualifies as a primary residence, owned and occupied as the fiscal domicile for three or more years, so exempt from capital gains tax; closing costs split 50/50.
| Expense item | Calculation | Approximate cost (USD) |
|---|---|---|
| Gross sale price | – | $500,000 |
| Realtor commission | 6% of $500,000 | ~$30,000 |
| VAT on commission | 13% of $30,000 | ~$3,900 |
| Seller’s closing costs | 2.2% of $500,000 | ~$11,000 |
| Corporate dissolution | Flat fee | ~$1,000 |
| Total fees and costs | – | ~$45,900 |
| Net seller proceeds | Gross minus total fees | ~$454,100 |
Scenario 2: sale of a $300,000 property (investment, acquired before 2019, using the 2.25% flat rate)
Assumptions: not a primary residence; acquired before 1 July 2019; the seller elects the one-time 2.25% flat-rate capital gains option; closing costs split 50/50.
| Expense item | Calculation | Approximate cost (USD) |
|---|---|---|
| Gross sale price | – | $300,000 |
| Realtor commission | 6% of $300,000 | ~$18,000 |
| VAT on commission | 13% of $18,000 | ~$2,340 |
| Seller’s closing costs | 2.2% of $300,000 | ~$6,600 |
| Capital gains tax | 2.25% of $300,000 (flat rate) | ~$6,750 |
| Corporate dissolution | Flat fee | ~$1,000 |
| Total fees and costs | – | ~$34,690 |
| Net seller proceeds | Gross minus total fees | ~$265,310 |
This scenario includes a capital gains tax line for a non-exempt property. Actual capital gains liability depends on individual circumstances: always calculate both the 2.25% and the 15% methods to see which is more favourable before electing. Neither scenario includes the payoff of a mortgage, if there is one.
Related reading: our guides to escrow services and oceanfront concessions, and to bank financing if your buyer needs a mortgage.
Frequently asked questions
Who pays the capital gains tax in Costa Rica?
What qualifies a property as a “primary residence” for the exemption?
Can I use the 2.25% flat-rate option more than once on the same property?
Is the real estate commission taxable?
Can closing costs be negotiated?
Thinking of selling?
We can value your property, explain the costs and run the sale from listing to closing. Tell us about your property and we will give you an honest view of the price and what you can expect to keep.
This article is for general informational purposes and does not constitute legal, tax or financial advice. Costa Rican tax regulations are subject to change and individual circumstances vary; rates, exemptions and fees are indicative. Consult a licensed Costa Rican attorney or certified public accountant before making decisions about a property sale.
