Gifting Property to Your Children in Costa Rica: Appraisal, Transfer Tax and Usufruct

Short answer: we found no specific gift tax in current Costa Rican law. When parents gift a house or a lot in Costa Rica to their children, what gets paid is the real estate transfer tax (Law 6999), at a rate of 1.5%, plus the registry fees and stamp duties the notary calculates when the deed is recorded. The tax is based on a value in line with the market, which is where an independent appraisal is useful: it gives you a documented, technical figure for the deed and a fair basis for splitting property among several children. Many families also gift the property while keeping a usufruct, the right to keep living in it or collecting its rent for life.

If you own property in Costa Rica and are planning ahead, perhaps from abroad, this guide explains the local side with the law in view. It is general information: have a Costa Rican notary, attorney or accountant review your case.

What taxes apply when you gift property in Costa Rica?

There is no separate gift tax

Unlike the United States and many other countries, Costa Rica does not have a gift tax with progressive brackets. On top of that, the Income Tax Law, in the part that governs capital income and capital gains, exempts “inheritances, legacies and donations” with respect to both the recipient and the donor (Law 7092, article 28 bis, item 10). How that exemption applies to you, and what happens if your child sells the property later, is a question for your accountant.

Your home country may see it differently. If you or your children are taxpayers in another country, its own gift-tax and reporting rules can apply even though Costa Rica has no gift tax. US owners can start with our guide on appraisals for expats and IRS reporting and confirm the details with their tax advisor.

The transfer tax (Law 6999)

Five points of the Real Estate Transfer Tax Law matter before you gift:

1. It taxes transfers “under any title” (article 1). A gift transfers ownership, so it pays the tax just like a sale.
2. It looks at what the deal really is, not what it is called (article 2). Labeling a gift as something else, or the other way around, does not change how the law treats it.
3. The base is a real value. Article 7, as amended by Law 9069 of 2012 (the Tax Management Strengthening Law), says the tax is calculated on the real value of the transaction, which must be in line with usual market value and can never be lower than the highest value registered under the methods of the Property Tax Law.
4. The rate is 1.5% (article 8, as amended by article 181 of the Notarial Code, Law 7764).
5. The transferor and the acquirer pay in equal shares. Article 6 makes both of them taxpayers and holds them jointly liable. In a gift, that means the parent who gives and the child who receives.

The law has no special exemption for gifts between parents and children. The gifts exempted in article 5 are, as far as the donor is concerned, those made to the State, certain public institutions, municipalities, cantonal sports committees, the Red Cross and public universities. If any of the other exceptions in that article might apply to your case, ask your notary. The values written in the deed have the character of a sworn statement (article 9), and the tax must be paid within fifteen business days of the date the deed is executed (article 7).

Registry fees and stamp duties

To record the deed at the National Registry, you also pay the registry fees set by the Public Registry Fees Law (Law 4564) and several stamp duties. The Registry will not record the deed without proof that the transfer tax was paid or that an exemption applies (Law 6999, article 15). The amounts depend on the value of the property, and your notary can give you the exact figure before signing, along with their fees.

The effect on annual property tax

The value stated in the deed does not stay at the Registry. Law 7509 provides that the base for the municipal property tax changes automatically with “the higher value stated in a public instrument on the occasion of a transfer of ownership” (article 14, item a). To understand why that figure often differs from market value, read our guide on cadastral value vs. market value.

Why get an appraisal when gifting property?

The law does not list an appraisal as a requirement for a gift. The notary drafts the deed and calculates the tax. Even so, an independent appraisal answers the question behind almost every decision: what is the property worth today?

• For the deed value. If the tax is calculated on a market-based value, it makes sense to know that value before signing instead of guessing or copying an outdated fiscal value.
• For fairness among siblings. With several properties or several children, an appraisal of each property lets the family compare what each child receives. A house in the Central Valley and a beach lot in Guanacaste may be worth very different amounts than the family assumes.
• For a dated record. The report documents the condition and value of the property at the time of the gift, with photographs, comparables and methodology, which helps avoid disputes years later, for example in probate.
• For a numbers-based decision. If you are weighing a gift, a sale to your child or a will, the real value is the starting point your notary or accountant needs to compare options.

Our real estate appraisal report includes a site inspection, a description of the land and buildings, their condition, an analysis of comparable sales in the area, the valuation method applied and the value conclusion. It is delivered digitally signed. When the appraisal is part of a tax process, you may also be interested in our tax appraisals service.

Gifting with a reserved usufruct

A common structure is for parents to gift the bare ownership (nuda propiedad) to their children and keep the usufruct. The children become the registered owners, while the parents keep the right to use the home and to collect its income (rent, for example) for as long as they live. Costa Rica’s housing finance bank, BANHVI, describes this very arrangement in its requirements for gifts from parents to children of homes financed with a housing grant.

What the Civil Code says (in its title on usufruct, use and habitation separate from ownership):

• A usufruct over real estate can be acquired by any of the ways ownership is acquired (article 335).
• The usufructuary is entitled to all the ordinary fruits of the property (article 337).
• While the usufruct lasts, the usufructuary must pay the ordinary taxes (article 355). It is wise for the deed to spell out who covers each property expense.
• The usufruct ends, among other causes, when the usufructuary ceases to exist (article 358). From then on, the child holds full ownership; your notary will explain how to cancel the usufruct at the Registry.

The appraisal determines the market value of the whole property. If the deed or a tax filing needs the value split between the usufruct and the bare ownership, your notary or accountant decides how to do it. Mention it when you request a quote so the report includes the data they need.

Basic rules for gifts under the Civil Code

Before signing, keep these rules from the Civil Code (title “On donations”) in mind. Your attorney or notary will explain how they apply to you:

• A gift of real estate must be made in a public deed before a notary. Without it, the gift is absolutely void (article 1397).
• The gifted property must be described individually (article 1398).
• Your child must accept the gift, in the same deed or a separate one, while the donor is alive and within one year of the deed date. If the acceptance is made in a separate deed, the donor must be notified (article 1399).
• Once accepted, it can only be revoked for ingratitude in the cases the law lists (article 1405). It cannot be undone because the family changed its mind.

If the home was bought or built with a family housing grant (bono de vivienda), it may carry recorded restrictions and the gift may need prior authorization: BANHVI publishes the requirements to request it. Check them first, or ask the entity that processed the grant.

The process, step by step

1. Talk as a family, especially if not every child receives the same.
2. Order a title study: property number, registered survey plan, liens and annotations.
3. Request the appraisal to establish market value.
4. Choose the structure with your notary: an outright gift or one with a reserved usufruct, to one child or several.
5. Sign the deed and pay the taxes and fees the notary calculates.
6. Record it at the National Registry and check the value left on file for the municipal property tax.

Notarial deeds in Costa Rica are drafted in Spanish (Notarial Code, article 71). If you or your children do not understand Spanish, the code requires an official translator or another one accepted by the parties and the notary, unless the notary speaks your language (article 72). Ask your notary how they will handle it before signing. If the property is held through a corporation rather than in your own name, the transfer may be structured differently; ask your attorney before deciding.

Mistakes we see often

• Disguising a gift as a sale, with a price that is never paid. The law looks at the nature of the deal, and a false figure in a sworn statement can cause problems. If you actually want to sell, read our guide to selling property to a family member.
• Writing a token value. The tax base must be in line with the market, with the registered value as a floor.
• Splitting property among siblings by guesswork, without knowing what each property is worth.
• Keeping the usufruct as a verbal promise. If the parents want to keep living in the home, it belongs in the deed.

Frequently asked questions

Is there a tax on gifting a house to my child in Costa Rica? We found no specific gift tax. What is paid is the Law 6999 transfer tax (1.5%), plus the registry fees and stamp duties for recording the deed.

Is an appraisal required to make a gift? The law does not require one. It asks for a value in line with the market, and an appraisal is the technical way to know that value before signing.

Can I gift my house and keep living in it? Yes. That is what a reserved usufruct allows: your children receive the bare ownership and you keep the use and income for life. Your notary drafts the clause.

Is it better to gift now or leave the property in my will? It depends on your family and it is not a technical decision. Talk to your attorney or notary. For the value side, a gift and an inheritance start from the same place: an appraisal of the property.

How much does the appraisal cost? A residential appraisal starts from approximately USD 300 (₡150,000). The final price depends on the type of property, its size and its location, and is set in the quote.

Request a quote

Díaz Peritajes is a firm of property appraisers founded by Ing. José Alberto Díaz Vidaurre, a CFIA member since 1982 (license ICO-3075). We work from bases in Pérez Zeledón and Curridabat and cover all seven provinces. Message us on WhatsApp at +506 7272-7270 with the property location, its property number or survey plan number and how many properties you plan to gift, and we will send you a quote in less than 24 hours. If you are outside Costa Rica, documents can be sent by email or WhatsApp.

This article is for information only and does not replace advice from a Costa Rican notary, attorney or accountant.