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Municipal Property Taxes: How To Calculate Them?

We all want to have the property of our dreams: Excellent location, with comfort, quality and at a good price. We strive to take care of it, prune the garden, clean it and keep the


We all want to have the property of our dreams: Excellent location, with comfort, quality and at a good price. We strive to take care of it, prune the garden, clean it and keep the roof in good condition, among other things; however, those are not the only tasks that a property demands.

We must bear in mind that there are obligations that we must fulfill with the Government, such as paying property taxes to the Municipality.

Real Estate Tax Law N ° 7509, establishes that properties must pay an annual amount, according to their value, toward the Municipality. This tax is collected for the purpose of benefiting the Municipality and the county where the property is located.

Although it is an annual tax, it can be paid semi-annually or in four quarterly installments, this will depend on each Municipality. It is important to remember that each Municipality is autonomous, that is, each one handles the procedures differently, whether payments, collections, or others.

The annual period begins on January 1st  and ends on December 31st, and the amount will be set according to the features of the land and/or buildings; to this end, certain variables will be taken into account, such as location, total land area, total construction area, number of years since construction, number of meters in front of the public street, among others.

In order to set this amount properly, it is necessary that the property owner submits the declaration of real estate to the Municipality, where the detailed characteristics of the property should be indicated. This declaration should be filed at least every 3 years to keep the property compliant and its information updated.

All the municipalities of the country have a valuation office, whose function it is to carry out the set of calculations, conclusions and operations necessary to determine the value of a property, whether urban or rural, and also taking into account its use. This office is advised by the Technical Standardization Body, which is in charge of providing the Municipality with depreciation methods, total and estimated useful life rates, the values ​​of the buildings according to types, methods to value land, technical and economic factors to consider, topography, location, description, urban equipment and public land services.

As shown, the amount to be paid per year for a property is not set lightly, it goes through a series of filters to arrive at the right amount.

To find out what the amount you must pay is, you can go directly to the Municipality and pay right there, or call by phone and have them inform you on the amount to be paid, as well as the bank account details required to complete the deposit. You need only indicate the property number of your property and your passport/Dimex Card number, or, if the property belongs to a company, the legal ID number of the corporation. Or you can simply contact us at Outlier Legal and we would gladly take care of this obligation for you.

For the property to appear in your name, it is very important to report the transfer of the title, which is registered by the Public Registry when buying the property. Basically, by filing the documents that indicate that you are the new owner of the property, the Municipality includes the property in your name in their database.

Remember to pay taxes on time, otherwise, penalties will apply, and your property could even be subject to a judicial collection proceeding for delinquent property taxes.



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