If you’re contemplating building a new home next year, prepare yourself to pay higher taxes than before, reports the national newspaper La Nacion.
But you’ll have to pay higher construction costs on which the taxes are predicated, say officials. The paper reported that you’ll pay 29.7% to 41% more in taxes next year than this year.
In the case of a home with the outside wall of concrete block termed a VCO1 type, the building cost of 145,000 colones per square meter this year will be 190,000 colones in 2013, a 31% hike, say tax officials.
Carlos Vargas of the tax collection department says this should give some idea of taxes if you own an older home — just deduct the years of depreciation after it was completed.
But Alonso Arroyo, a tax lawyer with the BLP Abogados law firm feels strongly that the government is nicking the home owner. He says construction costs have not increased as much as the officials figure.
Arroyo says that if you take the last two years into account, that would mean that construction costs have doubled in the two years since 2010, he says. That just isn’t the case, he says.
But Vargas counters that in the past, costs for taxation purposes were calculated every two or three years. That means that the 2010 figure Arroyo cites was calculated in 2007.
If the government insists, it could affect the construction industry as new home builders cut back their plans or even cancel them. It also seems likely that some suits in the constitutional court may result, somewhat akin to those that followed the traffic law of 2010.