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On Thursday, January 1st, 2015 will take effect the updated Manual de Valores Base Unitario por Tipología Constructiva (MVBUTC in Spanish), which helps to establish the tax value of real estate properties that cost ¢121 million or more, including luxury houses, and that must pay the Solidarity Tax to the Strengthen of Housing Programs (Law 8683).
As clarified by Tributación Directa (the tax authority in Costa Rica), this tax is not deductible for income tax purposes and relapse on the value of the properties of residential use, which are used on a regular, occasional or recreational way; includes both fixed installations as well as permanent. It was created -in 2009- with the objective of financing decent houses for the population in extreme poverty.
Let’s recall that every three years is required to update the value of a real estate property (the last time was in 2013) and that the solidarity tax is canceled once a year.
Functions of the Manual de Valores in The Real Estate Properties:
- Defines the value of the properties for tax collection by the municipalities of Costa Rica (Real Estate Tax Law, number 7509, as its reforms).
- It’s the foundation for Tributación Directa to charge the Solidarity Tax to the Strengthen of Housing Programs.
Details of the Manual de Valores
The manual indicates the parameters to follow in order to detail the types of constructions, its facilities and complementary works, regarding its components, useful lives and values.
In turn, it allows the association of an alphanumeric code to the diverse types of real estate properties, and a value per meter, square meter, cubic meter or per unit, plus values associated with the works, such as equipment and facilities.
You can check the entire Manual de Valores by visiting the following link: MVBUTC in Spanish
Remember that at ERP Lawyers & Associates we are experts in Real Estate Law, so we will give you advise regarding the study of the manual and in the timely payment of the solidarity tax. Contact us today.