February News

Property Tax Assessments – There is an interesting article in amcostarica about maritime zone property tax assessments being made by Aguirre.  Not mentioned in the article is the amount of the assessments being made either by inspection by the canton or when an individual goes in for the five year value declaration.  If the property is on the beach side of the road the valuation is made at 50,000 Colones per square meter, 30,000 for the mountain side of the road. A meter is 3.2 feet.  The tax rate is either 4% of that amount for residential property and 5% for commercial.

Speaking of property tax assessments.  Karen and I just went through the five year declaration.  Relatively painless.  Carlos, the individual we dealt with at the municipalidad, was very helpful.  Everything is computerized but Carlos had to access, adjust information on, and then print six separate forms.  The assessment rate, guess you would call it millage stateside, is determined by a complicated map broken down into numerous areas.  Whatever area the property falls in the tax rate is whatever it is for that particular area.  Looking at the map and from questions Carlos asked it seems that the altitude the property is at and the slope of the property are key factors.

Now to the national stuff.

Anyone Read Chinese???? – One weekend earlier this month the national stadium donated by and built by the little yellow fellows in appreciation of Costa Rica telling Taiwan to take a hike went dark.  When the engineers rushed to the manuals to try and trouble shoot the problem another problem was discovered.  All the manuals were in Chinese.  Four Chinese engineers had to be flown in to try and fix the problem.  In the interim the stadium is being lit using emergency generators.

Minimum Wage Amounts – A link to the new minimum wage amounts for each occupation can be found in the 14 January edition of amcostarica.  For those of you who don’t know it there is not a set minimum wage like there is stateside.  Each occupation has a separate minimum wage which is adjusted ever January and July.

Financial Weapons of Mass Destruction – Last month’s newsletter reported that the president of Banco Central, the equivalent of the U.S. Federal Reserve Bank, predicted that because of the large infusion of dollars for investments and speculative investments which pay 8-12% interest  inflation will soar during 2013.  President Laura Chinchilla now is calling these investments “financial weapons of mass destruction” that will destroy the Costa Rican economy.   A legislative proposal is to tax all money leaving the country at 30%.   That is in addition to the 8% tax already charge on earned interest.  A proposal put forth by a consortium of businessmen is to tax all money as it comes into the country.    The latter begs the question what about the money us expats bring into the country each month for living expenses which goes directly into the economy?   Attaching a fee/tax to these funds has previously been before the legislature.

A Tax That Worked – A year and a half or so ago when the Cuerpos de Bomberos (fire department) broke away from INS, the government insurance monopoly, a special 1 ½% tax was enacted to support the firemen.  An article in amcostarica earlier this month announced that because of this tax in 2012 the Bomberos were able to purchase and pay cash for 22 new, state-of-the-art fire trucks and had been able to build several new fire stations in areas that had never had fire service before.  Maybe the Bomberos should school house the legislature on how to collect, manage and spend tax revenue.  Particularly in light of the fact that proceeds from the corporate tax is to go towards attempting to curtail the out of control increasing crime rate with no results seen to date.

Gun Control – To possibly curtail violent crime President Chinchilla is calling for tighter gun controls to include a special insurance policy each gun owner will have to have on each gun owned and that a mandatory up to eight year prison term be handed down for illegal gun ownership or possession.  In addition, an education campaign directed toward women and children is proposed.  For women it will be to not allow guns in the home which in turn will cut down on family violence and femicide.   There were 32 women killed by firearms last year.  No mention was made in the article of how many were bludgeoned, stabbed or beaten to death last year.  Children are to be taught that guns are not manly and that only bad people have guns.

Money Laundering – Reynaldo Velasquez, chief of OIJ’s money laundering unit, has described Costa Rica as a “paradise for money laundering.”  He cites as evidence the accelerating costal real estate market with property being purchased with money from who knows where.  He further stated that those most commonly involved with money laundering are individuals with knowledge of the law and banking and also attorneys.  Bet that latter part really endeared him to the equivalent of the Costa Rican bar association and with his family attorney.

A Good Idea, but… – The Imprenta National, the government’s printing office, has digitalized the required books for this school year.  These can be accessed and read on-line or down loaded and printed.  This is all well and good except for the fact that only around 40% of the populace has home computers.  A lot of schools only have computers in their offices.  In order for a child to attend school a family encounters a major expense each year to purchase the prescribed school uniforms and buy books and various and sundry other items (note books, pencils, rulers, etc.).

Cost of Living

Exchange Rate – Today’s exchange rate at Banco de Costa Rica is 496.75 Colones to the dollar.

Fuel – The cost to fill your tank is going up again.  Regulators blame the U.S. economy and China’s petroleum demands for the increase.  Super is jumping to 718 per liter (US$5.49 per gallon), regular goes to 678 ($5.18) and diesel to 640 ($4.89).

Recipe – Karen’s Cajun Spice (The other day she wanted to prepare a Cajun chicken dish.  Of course you can’t find Cajun spice mix in the stores here so this is what she came up with.  Eat your Massachusetts heart out Lagasse.)

Take 1 tablespoon each of regular grind sea salt, Oregano, Thyme, Paprika, Cayenne, course ground black pepper, garlic powder and onion powder.  Hand rub the Oregano and Thyme until it is almost a powder.  Put everything in a jar, cap and shake to thoroughly combine.  Rub on whatever meat, poultry or fish you are cooking.  Will also make a mean Bloody Mary.

That’s it for this month, folks.  Everyone stay well, eat hearty and be happy.

2 thoughts on “February News”

  1. The line “A legislative proposal is to tax all money leaving the country at 30%.” scared the hell out of me as we’ve just listed a house we bought in 2007 (and lost 20% in value since then) however further research suggests the tax will be on expatriation of profits, not “all money”. Is that your understanding? Thanks

    • You ask a good question which like almost everything else down here
      depends on what news source you find info in. My input concerning the
      30% tax on money leaving the country was based on articles I read in
      amcostarica and insidecostatrica when this snake first raised its
      head. Since I put the newsletter out I have read in various English
      and Spanish language news sources that the idea of the 30% tax has been
      dropped in favor of (1) resurrecting the value added tax issue, (2) only
      taxing profits derived from speculation investments, (3) taxing money
      coming into the country which of course would include what you and I
      bring into the country each month for living expenses. Regardless of
      what happens on this issue there is still the in-place 6% transfer tax
      on property titles and the 8% sales tax to be paid on any profits
      derived from property sales.

      Like you we also have our property on the market which
      also like you we purchased in 2007 which if we are ever able to sell it
      we will be taking a loss also like you. Hopefully, the monies involved
      in the sale will be from U.S. financial institution to a U.S. financial
      institution with no monies entering or leaving Costa Rica.

      I wish I could give you a more definitive answer but I
      can’t. Like a Tico lawyer told my wife and I a few years ago: There
      are no laws in Costa Rica. The law is what ever the official you are
      dealing with wants it to be.

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