Declaring Your Property to the Municipality in Costa Rica: A Legal Obligation Every 5 Years

Declaring Your Property to the Municipality in Costa Rica: A Legal Obligation Every 5 Years

When purchasing real estate in Costa Rica, most foreign buyers focus on the exciting aspects of the transaction—finding the right property, closing the deal, and registering the title at the National Registry. However, many overlook a critical post-closing obligation: declaring the property value to the local Municipalidad (municipality).

This obligation is not just a bureaucratic formality; it is a legal requirement established under Costa Rican law, and failure to comply can result in penalties, outdated tax assessments, or complications in future property transactions.

In this blog, we will walk you through the legal framework, the process, the timeline, and the documentation required to fulfill this obligation and keep your property records in full compliance with Costa Rican municipal regulations.

I. Legal Basis for the Declaration Obligation

The duty to declare the value of your property to the corresponding municipality is grounded in Law No. 7509 of 1995, titled the Ley de Impuesto sobre Bienes Inmuebles (Law on Real Estate Tax),

Key Articles:
Article 16 of Law No. 7509 establishes that every property owner must declare the fiscal value of their property every five years.
According to the same article, the declaration must reflect the true commercial value of the property, and municipalities may update values or reject low valuations if they do not reflect market conditions.
The law also authorizes municipalities to apply penalties or impute a higher value ex officio in cases of non-compliance or undervaluation.

II. When and How to Declare the Property

Initial Declaration: A Critical First Step

It is essential to understand that the first obligation after registering the property in the Public Registry (Registro Nacional) is to file your initial property declaration with the municipality.

This declaration should match the purchase price of the property (converted to Costa Rican colones at the official exchange rate applicable on the date of the transaction).
That amount becomes the minimum fiscal value accepted for municipal purposes, especially for calculating the annual property tax (impuesto sobre bienes inmuebles).
This value is typically reflected on the “literal de propiedad” (property title certificate), which you receive upon registration.
Periodic Re-Declaration: Every 5 Years
Even if the initial declaration was duly filed, owners are legally required to update the value every 5 years. The goal is to ensure that the fiscal value remains current and in line with market conditions.

Municipalities may also request updated declarations sooner if:

• The property undergoes improvements or subdivision;
• The land value has significantly changed due to development;
• There is an administrative review of regional land values.

III. Documentation Required

While municipal requirements vary, most municipalities in Costa Rica require a standard set of documents to accompany your property declaration:

• Property Title Certificate (Literal de Propiedad) – A recent copy, available from the National Registry.
• Cadastral Survey Plan (Plano Catastrado) – Must match the registry information.
• Identification Document:
  • For individuals: Passport or DIMEX (if applicable).
  • For corporations: Legal representative’s ID.
  • Corporate Legal Status Certificate (Personería Jurídica) – If the property is held in the name of a Costa Rican corporation or foreign entity, this document confirms who is authorized to act on its behalf.
  • Declaration Form – Each municipality has its own version of the official property value declaration form, which must be properly filled out and signed.

IV. Submission Method: Physical or Digital

Modernization has reached many municipalities in Costa Rica, and numerous local governments now accept declarations by email or through digital platforms. However, not all do.

Some municipalities still require in-person submission of the declaration, especially if it’s the first time the owner is declaring or if the municipality has limited digital infrastructure.
In-person submissions may require an appointment and may also involve on-site review by a municipal engineer in some cases (particularly in touristic or high-value areas).
At LandCo, we always recommend confirming the specific procedures and formats with the local municipality where the property is located, as local variations are frequent.

V. Consequences of Not Declaring or Underreporting

Failing to file the declaration within the prescribed time frame can lead to:

• Penalties or fines imposed by the municipality.
• Administrative adjustment of the property value by the municipal tax authority.
• Problems with future property transfers, as discrepancies between declared and market values may trigger capital gains tax issues or notarial complications.
• A higher property tax bill if the municipality updates the value on its own (which may not reflect favorable market conditions).

VI. Let LandCo Help You Stay Compliant

At LandCo, we understand that navigating municipal bureaucracy can be daunting—especially for non-resident property owners. That’s why we include property declaration advisory as part of our post-closing services for foreign buyers in Guanacaste, Puntarenas, and surrounding regions.

Whether you are about to file your first declaration or need to renew the 5-year update, our team of attorneys can:

✓ Confirm the current value reflected in the registry;
✓ Verify deadlines and filing requirements with the relevant municipality;
✓ Assist in gathering and submitting the required documentation;
✓ Coordinate in-person visits, if needed;
✓ Keep you informed about any legal or regulatory changes affecting your property tax obligations.

Conclusion: An Essential Legal Step

Declaring your property to the municipality is not just a formality—it is a legal obligation that protects your rights and ensures proper municipal registration and taxation. By understanding and fulfilling this duty, you avoid future legal or financial surprises and contribute to transparent property ownership in Costa Rica.

If you have recently purchased a property, your declaration is due now. Don’t delay.

Contact LandCo to ensure that your investment is fully compliant with Costa Rican municipal law.