February 6, 2010

Did Taxes & Tourism Blow Costa Rica Real Estate Out?

Filed under: News, Projections, State of the Market, Taxes — Tags: buy land in costa rica, Costa Rica Taxes, State of the Market — Ben @ 5:23 pm

Costa Rica Real Estate Listings

I just received an e-mail from a reader that shamed me into sitting right down and writing.

I have read your face book page and articles on the tax issue there.

I had been planning to take a trip in March in the hopes to travel to Domincal and Uvita nd look at some land that over looks (has view of) the playa. But with all this discussion of election and no tourism and the tricky tax factor it sort of puts a damper on it. Was this a major blow to the real estate and tourism market, and did it blow you out?

I’m sorry but I’m not aware of the negative effect that the election could have on a land purchase in Costa Rica so I’m not able to address that.

As for tourism – well now that’s an interesting topic.

Tourism has been as hot here over this last holiday season as I have ever seen. With the new road from Dominical to Quepos, I think that we’re really in for it here. I understand that the status of tourism is currently anybody’s guess. Around here it feels like we are in a growth mode. Granted, I haven’t read a lot of media recently and I don’t have a TV, so as a news source I’m limited to what I see and feel.

Over the holidays Uvita was caught by surprise. The grocery shelves were bare and we spoke with people everyday looking for a place to stay. I think that everyone found a bed and it felt like one big party around here. I think that it is notable that the beer supply seemed to hold despite what appeared to be a gargantuan demand.

Although the crowds have left, the festive feel continues with a good strong tourist presence. So, without reading an article to the contrary, I’d say that tourism is alive and well in Uvita and Dominical Costa Rica, and that the prospects for the future are bright, especially with the two new segments of road making the drive from San Jose to Dominical a 2 hour and 40 minute affair now, instead of the former 4+ hours and some of that on teeth loosening dirt roads.

I have not seen an article written from your blog or website in February on your website so I want to know if you are still in business down there?

Well, I thank you for getting me off of my butt to get this article posted. I sure don’t want to give the impression that we’re out of business. Our lack of posting is a testament to our being busy. Rod and I have been doing quite a bit of real estate business. We’ve done some deals, and more are coming our way. All of the agencies are reporting the same, some with best ever numbers – (I heard this last part through a third party, but I hope to confirm it shortly.) (more…)

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January 9, 2010

2009: In The Rearview Mirror

Filed under: News, Projections, State of the Market — Tags: News, Projections, State of the Market — Ben @ 3:17 pm

Rod & I have decided to write a few words about the year just past. We did so without consulting each other or giving any clues regarding what we’ve written.

First off is Rod

If you subscribe to the idea that life is a series of ups and downs, then last year was a harsh reminder of how challenging the “downs” can be.

“Unemployment soars to highest level in 16 years.” – New York Times
“U.S. Foreclosures to Reach Record 3.9 Million in 2009.” – Bloomberg.com
“New car sales a ‘disaster,’ says Sergio Marchionne, CEO of Chrysler/Fiat.” – NY Daily News

While people were losing their jobs and houses in record numbers, they still had the time and interest to search for Britney Spears and WWE (World Wrestling Entertainment, which is fake wrestling, right?) making them the top two search terms on Yahoo! for 2009.

Although I have no idea what Britney was up to in 2009, I do know that most of us here in Costa Rica felt the impact of this economic downturn. After a decent start to sales in January and February, most real estate companies saw offers dry up during the following 8 months.

Like many people around the world, the Guys In The Zone shifted gears to “beans & rice mode” (luckily, we both like beans and rice). We tightened up the expenditures and found new streams of income. [Ben deserves some kudos here for his quick mastery of the hard money lending business. He, (leveraging his experience, contacts, and bilingual-ness) saved more than a few local families from economic disaster. This lending experience taught us that putting good food on the table is important, but to literally save someone’s table (and house it sits in) from foreclosure is a genuinely rewarding experience.] While we didn’t sell any property during the middle of the year, we did put a lot of time and energy into new listings, our websites, and the Talk Show feature which we will continue to work on in 2010. Ben also started writing articles for Montana al Mar, a new weekly magazine focused on health, sustainability, and community.

The old adage “When you love what you do, the money will follow” proved true in 2009. The end of the year found activity picking up noticeably. Three excellent deals (more…)

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October 21, 2009

Confusion Around Costa Rica’s Luxury Tax

Filed under: News, Taxes — Ben @ 6:52 am

So, I get this great e-mail from some super in-the-know real estate guys the other day that answers a number of my questions regarding the new Luxury Tax law. After this “clarification” I post to my Facebook page and Tweet the news where I stated “I have determined that the new Luxury Tax in Costa Rica is for construction only and does not include the value of the dirt under the house.”. This is wrong.

Today I wake up to find out that I had posted incorrectly and in the process cost thousands of people their homes and livelihood – OK, well it wasn’t quite that dire, but still…

I read an article in AM Costa Rica that says:

The biggest issue appears to be if land should be included in the valuation to determine the amount on which tax is to be assessed. Some say yes and some say no.

Well, the law says yes, but that appears to be a late change by the legislative staff without the knowledge of some of the key legislative players.

Consequently the title: “Tico and expat confusion reigns on new luxury tax” In it the author explains how the law is poorly written, and the “Hacienda de Tributacion” (Costa Rica IRS) has not communicated the law well through press releases (there have been none to date) nor through their website where it is mentioned in a cryptic and hard to find form. So, even for those well meaning, law abiding tax payers who want to comply, they aren’t really sure what to comply with. (more…)

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October 14, 2009

Costa Rica’s New Luxury Tax

Filed under: News, Taxes — Tags: Costa Rica Taxes, law, News — Ben @ 4:32 pm

Everything that I know about it (which ain’t much).

There is a new law that has now quietly come into force in Costa Rica. It is being called the “Luxury House Tax” or a facsimile thereof.

I now have it on good authority that there is mass confusion about this law by the few that have even heard of it. I am one amongst the throng of the confused, but I will here report what I know and will continue to post as I get new information.

There appear to be many that have not heard of the law, but whether a person doesn’t know about the law or simply chooses to do nothing about the law, word is that there will be some rather harsh consequences. How ‘bout them apples?

This is a new tax and it is only for constructed properties – houses, not for raw land. Houses built on both titled and maritime zone property are affected.

House owners must declare the value of their house, and then pay the tax between January 1 and January 15^th. The law went into affect October 1, 2009 so the amount in this first time slot will be from October 1, 2009 to January 1, 2010.

If the value of your house is below $170,000 (give or take – this amount will vary depending on the exchange rate), you are exempt.

I have included a table of the current tax-to-value table. At the writing the colon is hovering right around 580 per dollar but you can take the figures below and use the conversion thing by clicking here.

Colon Value From	Colon Value To	Tax
From 1	to 100,000,000	0.0%
From 100,000,000	to 250,000,000	0.25%
From 250,000,000	to 500,000,000	0.30%
From 500,000,000	to 750,000,000	0.35%
From 750,000,000	to 1,000,000,000	0.40%
From 1,000,000,000	to 1,250,000,000	0.45%
From 1,250,000,000	to 1,500,000,000	0.50%
From 1,500,000,000	to 1,750,000,000	0.55%

There is an example pdf form on the Costa Rica government’s web site. If you’d like to see it for who knows what reason: click here. It’ll open in a new window and load a pdf document that is an example of what the final version will look like shortly.

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May 29, 2009

Shrimp n’ Street Talk

Filed under: News, Stories, Uncategorized — Tags: ecology, News — Ben @ 1:38 pm

Guys in the Zone heresay service: I thought that I’d behave like a blogger this morning and so I cruised the Costa Rica news & real estate blogs. The following are my findings along with some current gossip:

The PRETOMA (Programa Restauracion de Tortugas Marinas) website

The US Department of State`s Bureau of Oceans, Environment, and Science imposed a trade embargo on all Costa Rican shrimp exports to the US, effective as of May 1. The embargo is due to Costa Rica’s failure to enforce its laws that require commercial shrimp fishers to protect sea turtles from capture and death in trawl nets by using Turtle Excluder Devices (TEDs).

And then a little commentary on the matter from Globalpost:

It’s not the first time that the United States, Costa Rica’s chief shrimp buyer (shrimp exports to the U.S. grossed $2.8 million in 2007), has put a trade embargo on Tico shrimp. The ban has been imposed four times since 1999, in an attempt to penalize this country’s shrimping habits.

Fishers are netting shrimp illegally near river heads and protected marine areas in the Pacific, and aren’t using technology designed to prevent turtles from drowning in trawl nets, according to PRETOMA.

The article included statements that the biggest hit here is to Costa Rica’s “Green” reputation. Costa Rica is apparently allowing shrimp harvesting in such a way that endangers the marine turtles — the green sea turtle, the olive ridley, hawksbill and leatherback. So the U.S. is wielding its influence, and for those of us that like the idea of preserving the earth’s natural resources, this is good news.

Yesterday I was talking with Chef Dave from La Cusinga. He’s doing some pretty interesting things here, one of which is cooking up a culinary experience at the La Cusinga restaurant which is called The Gecko. I haven’t tried it yet, but for those that have, they say that it is nothing short of divine.

Anyway, it turns out that Chef Dave is a bit of a writer, and that he is interested in a lot of the things that I like writing about as well. He’s started his own blog over at Chef of the Jungle. He is the one that had originally told me about the U. S. ban on Costa Rica shrimp imports to the U. S. (You can read his commentary on the matter by clicking here). That is indicative of the topics found in his blog. Here is a clip from his website: (more…)

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March 28, 2009

In Memory of Sean McGraw

Filed under: News — Tags: Personal — Ben @ 4:58 am

Very much in keeping with the theme of Costa Rica real estate, I thought I’d take advantage of the liberties afforded me as the owner of this blog and write about the death of a professional associate, and a friend, Sean McGraw.

Sean died Tuesday night, March 24th, 2009, in a car accident. He was 35 and is leaving behind his wife Jessica and 2 children. Living in a very small community here in Costa Rica’s southern Pacific zone, the feel of having just lost one that was known by so many is in the air – palpable.

Sean was one of four partners of Coldwell Banker Vesta Group here in Dominical, and he was a reader of this blog. He was also one of my competitors, and despite this unsavory handle, we enjoyed the opportunities that we had to work together with various clients, and on various projects. We also shared a definite interest in improving the overall quality of our currently un-certified industry. Sean was a student of the real estate business and on occasion was a help to me in understanding certain aspects of Costa Rica real estate law.

Living and working in Costa Rica’s southern zone is like living in old time, small town USA of a long time ago. You can’t go to the store, walk down the street, or even poke your head out of the office without the potential of bumping into someone you know and engaging in a brief “how ya doing?” session. Very few of these in these past few days have not mentioned Sean and the shock of his passing.

The word that pops into my mind every time that I think of Sean is “vital”. The man was very much this – full of life. Sparkling eyes and an ever present smile.

He is going to be missed.

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March 8, 2009

The Question on Everbody’s Mind

Filed under: Land For Sale, News, Projections, Relocation, State of the Market, Stories — Tags: buy land in costa rica, firesale, Projections, State of the Market — Ben @ 5:29 pm

How would you describe the current “crisis” impact on the local economy and on Costa Rica real-estate in general?

Yesterday I made the trip up to San Isidro de el General to take care of some things. I was to meet Rod and Lindsay for lunch at “Mexico Lindo”, an amazing genuine Mexican food restaurant there, run by a bona fide Mexican Armando and his lovely wife. I have known them for years and used to frequent their little taco hole in one of the off-the-beaten-path streets of San Isidro years ago. Now they are located right on the central square and my, how things have changed since those days of long ago. I don’t think that there was a single empty table there, and at least 50% of what I heard was English – my, how things have changed.

Running the gauntlet of greetings as I made my way back to Rod and Lindsay, I looked up to see a couple who are particularly good friends, but that I have not seen for awhile. I greeted them with something like “how are you guys doing in this new world in which we live?” (reference to the economy), to which they responded, “what is going on?”. Working in real estate provides one with an interesting position in life. I didn’t realize it for a long time, but it is now clearer than ever. This industry is at the very foundation of life. We all need to live, play, and work somewhere. I received the above question in an e-mail from one of my clients just yesterday, so I heard the question a total of 2 times over the course of the day, and that wasn’t an unusual day.

Here’s what I think

We have lost a lot of buyers due to the economic crisis. We are gaining some buyers that we wouldn’t have otherwise had. It may look something like the graphic there to the left. It means a slow down for us here in Costa Rica, but not death. I have a client/friend/partner that is a high output kinda guy. I’ll call him Steve, a lawyer in Florida. He purchased a piece of land from me 3ish years ago. Subsequent visits have given us the opportunity to forge a friendship. Steve had a plan.

Sell his beach condo that he bought for investment
Sell his main home
Let the lease on his Porsche run out
Finish up obligations at the firm
Set up some means of income in Costa Rica
Move to Costa Rica

Steve LOVES Costa Rica. This is home to him. Every visit here confirms it to him. He just needed to get the ducks all lined up in a neat row prior to making the move. This is a common scenario. Life was fine. Plans were being made. Then, it all changed. (more…)

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March 3, 2009

“Yodel Naked” Sweeps the Globe

Filed under: Just for Fun, News — Ben @ 3:31 am

Yodel naked for world peace.jpg Some are touting the global phenomenon of Yodeling Naked as the possible solution to the many divisive problems now confronting mankind. Originally developed as a privacy measure for property in Costa Rica’s remote southern pacific zone by none other than us here at Guys In The Zone, “Yodeling Naked” has swept the globe. Some are calling it the “New Yoga” as Muslims, Jews, Christians, Zoroastrians, New Agers and others are being witnessed in the activity.

“I used to hate my neighbors” said Mildred Dinglewhitz of Scottsdale Arizona, “now I love them”. This quote was taken as Mildred was coming in from her back porch after letting fly with a good yodel in the buff. She credits her new ritual of yodeling naked for 5 minutes twice a day, for the change in attitude.

There is a proposal being presented to congress in the upcoming session that a 7 minute congressional Yodel Naked session would help to “add clarity” and “breakdown barriers” as they deal with today’s thorny issues. A similar measure is being drafted to present to the World Religious Counsel.

All right, enough of that. I must admit though that I now understand the power of the Title. I have received tons of comments and e-mails from my article here that contained the words “Yodeling Naked”.

Costa Rica real estate, the theme of this blog, limits my ability to come up with some really grabbing titles. I am hard pressed to equal the curb appeal of a title containing the word “naked” juxtapose with “yodel” and then “fire sale” thrown in for good measure, but I can assure you, I’ll be trying.

I had a rather positive experience come out of that article in the form of a gentleman, Brian Requarth. Brian has put up a website that endeavors to list properties throughout Latin America as well as helpful information, similar to Guys In The Zone. His website www.vivarealcostarica.com is also setting out to be a sort of Costa Rican Multiple Listing Service. You may recognize the name since Brian is a regular commenter here on Guys In The Zone.

Brian contacted me and asked if I would be available to do an interview over the phone, actually we used Skype. I was honored. Brian recorded the interview and posted it to his website. I have posted it here for your listening enjoyment.

So, spread the word! Yodel naked for world peace!

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January 23, 2009

Yodeling Naked & Firesales

Filed under: Land For Sale, News, State of the Market, Stories — Tags: buy land in costa rica, firesale, projects, State of the Market, yodel naked — Ben @ 1:25 pm

Rod & I sold a piece of property yesterday and I’d like to tell y’all about it. Be ye buyer or seller I think that it will be informative and hopefully helpful.

The couple came to us from a Canadian referral, primarily to view the San Buenas Golf Resort. I’ll call them the Schmerds.

After viewing the course and deciding that it was for them – they’ll likely get a clubhouse condo for investment and income generation. All this plus the fact that they like to golf made that a no brainer. They asked if they could see some general market properties as well.

We started in Uvita with some lovely whales tail view properties. Bella Vista Lot #6 has occupied “The Best Deal in Uvita” slot for some time, but was recently nudged into second place by a fire sale opportunity that we had just received.

The Schmerds LOVED #6, with its beautiful ocean and jungle views and absolute privacy. A little over 2 acres and end of the road quiet.

From there we went to Bella Vista #5 which is a re-sale and was formerly “Ben’s Favorite Uvita Property” but it too has been relegated to the #2 position by another property that I’ll describe here in a minute. (more…)

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January 9, 2009

Big Earthquake no Big Deal in Uvita

Filed under: News — Ben @ 5:05 pm

When I first posted the below article, I was “street informed” and had heard nothing about anybody being hurt by the earthquake. When I first read a news report on the earthquake, and the fact that people had died, I was shocked. The toll has gone from 2 to an estimated 34 over the ensuing days. We barely felt it here in Uvita. Hence, my title for this article is now inappropriate. The Big Earthquake has now become a Big Deal in Uvita. Our condolences go out to the loved ones of those hurt or killed by the quake.

I was sitting in my real estate office here in Uvita Costa Rica yesterday when I felt the floor tremble a bit. I looked around for a nearby glass of water, as is my custom. There wasn’t one. I shrugged and went on with my day, responding to e-mails, working the web sites, conversing with clients.

A couple hours later word comes in that there was a major earthquake centered up around Poas Volcano. (Click here to read the CNN article about it.) Clients write in and ask “How you guys doing there in the zone?”. We’re fine. I remember thinking that I had felt the floor shake a bit, but I never really trust it when I feel that.

Having lived in Costa Rica for 10 years, I have gotten used to earthquakes… well sort of. I think that something tweaked in my head after having experienced a few of them. I’ve never felt threatened by one, so there isn’t an “ohhh I’m scared!” kinda thing. Actually they’re kinda cool. But they do shake the very ground you walk on, and that has had a rather strange affect on me.

After a notable shaker some years ago, I noticed that there were an inordinate amount of aftershocks going on. During one of these “aftershocks” I noticed that (more…)

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