In most cases, non-resident sellers are subject to a 2.5% withholding tax on the gross sale price. This amount is withheld by the buyer at closing and paid directly to Costa Rica’s tax authority (Hacienda).
What Is the 2.5% Withholding Tax?
The 2.5% retention is not based on your profit. It is calculated on the total sale price of the property, regardless of how much you originally paid or invested.
This withholding functions as an advance payment of capital gains tax, and in many cases, it is treated as the final tax obligation for non-residents.
Who Is Responsible for Paying It?
The buyer is legally required to:
- Withhold 2.5% of the sale price
- Submit payment to Hacienda within 15 days
- File the required tax form (Non-Resident Capital Gains Withholding Form 129)
If this step is missed, the National Registry may refuse to register the property transfer, which can delay or invalidate the transaction.
Can You Pay Less Than 2.5%?
In some cases, yes.
If your actual capital gain is lower, you may be able to file a tax return and request a refund. This requires proper registration with Hacienda and detailed documentation of:
- Purchase price
- Closing costs
- Property improvements
For a deeper breakdown, read our guide on
👉Costa Rica Capital Gains Tax: Deductible Expenses and Property Improvements Explained
*Any analysis regarding the possible application of a refund or a different tax treatment should be reviewed on a case-by-case basis with specialized tax advice.
Special Considerations for Investors
- Pre-2019 Properties: May qualify for an alternative 2.25% rate on total sale price
- Corporate Ownership: Properties held in Costa Rican corporations may be subject to different withholding treatment
- Documentation Matters: Keeping electronic invoices (“factura electrónica”) is critical to reducing taxable gain
Work With a Legal Team That Understands the Process
Navigating Costa Rica’s tax and closing requirements as a non-resident can be complex—especially for high-value transactions.
At Uvita Law Firm, we help foreign investors structure property sales efficiently, ensure compliance, and identify opportunities to reduce unnecessary tax exposure.
👉 Book a consultation today to review your situation and plan your sale with confidence.
