Applying for Residency
If you’re planning on buying land and living in Costa Rica for any extended period of time, the government requires you to establish some form of residency. Depending on your qualifications and requirements, residency is available in several different formats. Costa Rica’s two main types of residency are Pensionado (Pensioner) and Rentista (Small Investor).
 
Pensionado (Pensioner) – Fits most retirees

• You must prove that you have at least $600 U.S. a month in pension income. That income can come from a public or private source.
  
  
• You must document this income and arrange to have the checks deposited in a Costa Rican account in colones, not dollars.
  
  
• You are required to spend at least four months out of the year in Costa Rica, although the months need not be consecutive. For example, you could come in June, November, December and March.
  
  
• You must apply at the Costa Rican Consulate in your home country.

Rentista (Small Investor)

• You must fill out an application with the Costa Rican consulate in your country of origin, or directly with the Department of Immigration in Costa Rica if you’re already in the country. (There is some question whether you will be able to continue to apply for residency while already in Costa Rica.)

  
  
• If you’re not living in Costa Rica at the time you make your application, you must appoint a representative, called an Apoderado, and grant special authority to this representative. You’ll also need to supply a San José address where the representative will receive mail regarding your residency application.

  
  
• You must supply the following documents: Birth certificate, Marriage license if you’re married (if you’ve divorced and remarried, no divorce papers are required) copies of academic or professional degrees (if you plan to practice your profession in Costa Rica), a police certificate of good conduct from the last place you’ve lived for at least two years.
  
  
• An authenticated copy of every page of your passport.
  
  
• Authenticated copies of dependents’ birth certificates (spouse and/or children) if they are included in the residency application. Police certificates of good conduct for dependents over 18.

  
  
• Four passport-sized photos.

  
  
• Your fingerprints. The Ministry of Public Security will run them through Interpol, who will do an international background check on you.

  
  
• You may be asked to provide proof of a doctor’s exam.
  
  
• Proof of income. This is the most important part of your application. The government is looking to see if you have enough money to support yourself in Costa Rica.
  You’ll need a letter from your financial institution saying that you will be receiving at least US $1,000 a month income. The financial institution must be an “internationally recognized entity,” listed in Polk’s International Banking Directory. If your income is from a brokerage or insurance company, you’ll need to submit a copy of its annual report along with your residency application. The letter issued by your financial institution should say that your income is “permanent and irrevocable” for at least the next five years. It’s a good idea to have a line added that also states, “in the event the funds invested or on deposit are reduced in any manner, the bank shall notify the Costa Rican Tourism Institute,” which, along with the Department of Immigration, has a say in residency issues.
  
  
• You are required to spend at least four months out of the year in Costa Rica, although the months need not be consecutive. For example, you could come in June, November, December and March.

Permanent Residency
After you have lived in Costa Rica for two years with Pensionados or Rentistas status, you may apply for permanent residency. This gives you all of the rights a Costa Rican citizen enjoys, with the exception of voting. Other ways to gain permanent residency include being a citizen of another Central American country or of Spain; having lived in Costa Rica full-time for five years; marrying a Costa Rican citizen; or having a child in Costa Rica. When you apply, you must demonstrate that you will make a positive contribution to the country. The benefits include the ability to work in Costa Rica, receive reduced fares on air travel within Costa Rica, and receive low cost admissions to the country’s national parks and reserves. Unlike with other residency types, permanent residents are not required to reside in the country four months out of the year. However, permanent residents are required to visit the country at least once a year.

How Do I Apply?
You must submit an application and supporting documentation to the Costa Rican Department of Immigration. If you apply from your country of origin, you must apply at the consulate. The consulate will send your documents to the Department of Immigration in San Jose for you.

The Department of Immigration will issue you a receipt of filing. If everything is in order and the application is complete, it will be  forwarded to the Immigration Council, where it may sit for months or even years. While the Immigration Council considers your application, you are legally allowed to remain in the country.
 For permanent residency, you (or your lawyer) will eventually receive a resolution (resolución) detailing the finding of the Immigration Council. If the resolution is approved, authorities will issue a residency card (cédula de residencia). In order to receive your residency card, you must pay the Costa Rican government a $300 (US) Residency fee, which must be renewed each year.

Visit www.costarica-embassy.org for up-to-date information on residency and visa requirements.

Taxes in Costa Rica
Like most countries, Costa Rica has an income tax as well as municipal taxes, sales taxes, and transfer taxes for real estate. The income tax rate is based on your level of income and municipal taxes are based on the size and value of your property.

Municipal Taxes
All property owners must pay a municipal tax, which is used for maintenance, such as street cleaning and lighting, and helps to fund various local government agencies. Property owners pay a rate that is based on the size of their property facing the street front. Most homeowners pay no more then $10 (US) per month for these services. The yearly government property tax is also added to your municipal tax bill, which equals .25% of the price of your property. If your property is worth less than six million colones you will be exempt from the property tax.

Sales Tax
The sales tax in Costa Rica is currently 13% for goods and some services. The sales tax applies to any thing you buy, from food to furniture, however the services of independent professionals like lawyers, doctors or dentists are exempt from sales tax.

Transfer Taxes

When you purchase a home or a car in Costa Rica, you will not pay sales tax. Instead, you will be charged a transfer tax because these items must be entered into the National Registry. The transfer tax for real estate is1.5% above the price registered in the National Registry. The transfer tax for cars is 2.5% above the retail price listed in the Ministry of the Treasury’s annual publication.

Income Taxes
Foreign residents are not required to pay income taxes on pensions or income generated outside of the country however anyone who works in Costa Rica must pay income tax. Taxes are based on personal income and anyone earning less than the lowest amount is exempt. Individuals must file tax declarations, including having received no income, by September 30th of each year. Individual tax rates run from 10% to 15% for incomes above ¢215,600.00. However, if you are self-employed as a doctor, lawyer or other professional, you will be taxed at 10% to 25% for incomes above ¢958,000.00.

Moving Your Belongings to Costa Rica
Costa Rica has a variety of laws covering the importation of used household goods, furniture and personal items. The duties charged for these items vary depending on how and when you import your goods. Sometimes an item will not be taxed under one article of the customs law, but it will be taxed under another. So, it depends on how and when you import your belongings. Make sure you fully understand all of the customs laws so you can take advantage of them and avoid high import duties. For more information or for assistance with moving your belongings to Costa Rica you can visit the Association of Costa Rica Residents (ARCR) website.