The average person in Nosara or Samara pays 5 to 6 times more in property taxes than people living in the more densely populated areas of Nicoya and between 7 to 9.5 times more than people in the other four districts of the canton, according to data revealed in a recent report by the Center for Responsible Travel (CREST).
Most people in these communities realized that they pay more in taxes than other districts and suspected that they receive back proportionally little in comparison in the way of services and social welfare projects. However, the degree of disparity did come as a surprise.
Alvin Rosenbaum, president of the Nosara Civic Association, who commissioned the report, remarked, “The imbalance of taxes paid by Nosara to projects received— nearly five-to-one— was worse than expected.”
Likewise, Jannelle Wilkins, the CREST Consultant who took the lead in gathering data for the report, explained, “How much was paid per property in the different districts is substantially different, and there are plenty of reasons for that. Agricultural land is taxed very differently than luxury properties.” However, she noted that this difference is not necessarily a bad thing.
Simply put, higher taxes mean that the property has a higher value, frequently due to the commercial nature of the area or its proximity to the beach and to tourism hubs. The tax rate in itself is the same throughout the canton: 0.25 percent of the value of the property. That equates to 2500 colones ($5) per million colones ($2000) per year.
However higher property values definitely have their downside, especially for locals. Martha Honey, co-director of CREST, commented, “In a number of communities, local people sell their land to tourist developers thinking they are getting a great price. Soon the money is gone, land prices go up, and local people can no longer afford to buy back land in their home community.”
This trend was noted in 2008 by the Federated Association of Engineers and Architects (CFIA) and the College of Engineering Surveyors in a report titled Declaration of Costa Rica: Coastal Zone Management in Favor of the Poor. The report states, “The native people are displaced from their original places and spaces and end up relocating to informal settlements with limited basic services, unacceptable environmental conditions and few or no job opportunities.”
This inequality between the rich and the poor in these districts is noteworthy. The CREST Report noted, “In the districts of Nosara and Sámara, it is estimated that 25% or more of Costa Rican families live in poverty – despite the common perception that foreign residents residing in these communities have brought wealth and a high standard of living to these areas.”
Appraisers Evaluating Declared Property Values
Just as there is economic inequality, there is also inequality in the declared values of properties since most of the properties are taxed based on self-declaration.
Wilkins, the CREST consultant, pointed out this issue. “There’s not true value assessments that are standardized,” she said, noting that the municipality generally doesn’t have sufficient staff or time to assess properties. “I think they’re going towards that, they’re trying to establish that. It’s hard when they don’t have property values regulated countrywide.”
However, the municipality of Nicoya is working on evaluating declared property values based on a map of values created in 2009 at the national level by the Ministry of Finance based on market studies of real estate sales, which are driven by supply and demand.
According to the map of values, in the canton of Nicoya, the properties with the highest value are located in the commercial center of Nicoya, at 200,000 colones ($400) per square meter for lots of less than 5000 square meters.
Downtown Samara is valued at 150,000 ($300) and lots in the American Project of Nosara are set at 60,000 colones ($120) per square meter. By comparison, a lot in Los Arenales or Nosara Center would be worth 20,000 ($40) and 6500 ($13) per square meter respectively.
Properties with the lowest values in the canton are located in El Cerro de Sonzapote in Quebrada Honda, which is a more rural, agricultural subsistence area.
“The nature of the land has a distinct value,” Mayor Marco Jimenez explained. “A property in Nosara is not the same as one in Quebrada Honda or San Antonio.”
Nosara has a higher value due the nature of tourism in the area as well as proximity to beaches, whereas Quebrada Honda and San Antonio are more rural, agricultural area.
Property by property, two appraisers in the municipal real estate department (bienes inmuebles) are comparing property value declarations to satellite maps and a standard table of values to detect undervalued properties and properties that have not been properly declared in more than five years. For example, the satellite maps might reveal that a property has a house on it that has not been declared or that is larger than what is declared, or the property may be located in an area where land has a higher market value.
They are filling thick three-ring binders with their careful research in the hopes of using this information to ensure fairer and more standardized property value assessments in the future.
Joana Briceño Vardenas, one of the appraisers, showed The Voice examples of disparities in declared property values, such as a 1,700-square-meter property in section A of the American Project in Nosara that was registered with a value of 1000 colones ($2), undoubtedly to evade taxes. They are in the process of notifying this property’s owner to go to the municipality to update the declaration of the property value, something that should be done every five years by law.
“Nosara has a more dynamic supply and demand behavior than other districts,” she remarked. She also mentioned that Samara’s real estate market is similar in behavior.
What the municipality wants is for each person to pay taxes based on what they really have—the real value of the property and any permanent structures built on the land. However, they are willing to work with the person to determine a proportionally fair and realistic value that will not be too hard on the owner, she explained.
Briceño is currently working on evaluating properties in Nosara and in downtown Nicoya, and Samara will follow. “We have five years to regulate everything,” she said. “The ideal is for people to come and update (their declarations).”
She said there are about 40,000 fincas or properties in the canton, and Briceño estimated that about 16,000 have appropriate declarations. Briceño also emphasized that the income from property taxes is needed in order to carry out public works and better services. “It’s all a chain,” she said.
Just 4% of money collected for property taxes goes to national institutions (1% for assessment by the Technical Normalization Counsel and 3% to the National Registry). The remaining funds are dispersed within the canton, with 10% going to the boards of education, 10% to municipal administrative costs and 76% to investment in infrastructure, student scholarships, municipal police or social programs, according to development plans and municipal budgets.
This is part of a series of articles based on the investigative report by the Center for Responsible Travel (CREST), “A Portrait of Economic Realities in Nosara and Samara: Providing Tools for Sustainable Development.”