Tax — no treaty yet, but in negotiation.

Headline: the UK and Costa Rica do not yet have a Double Taxation Agreement — but formal negotiations began in 2025 (Costa Rica's Treasury announced the start of talks at CIAT). Once ratified, the UK would become the fifth country with an active CR tax treaty (after Germany, Mexico, Spain, UAE). In the interim, the UK provides unilateral foreign tax relief to prevent genuine double taxation.

How the UK taxes you

UK is worldwide-income for UK tax residents. CR rental income and CR capital gains appear on the "Foreign" pages of self-assessment.

• CR rental income — reportable in UK self-assessment. Foreign tax credit relief reduces UK tax by the CR tax paid (15% gross or 25% net).
• CR capital gains on sale — UK CGT 28% (higher rate) / 18% (basic rate) on residential property gains. CR's 15% CGT qualifies for foreign tax credit.
• Holding the property — no annual UK reporting unless via overseas trust/company structure.

How Costa Rica taxes — territorial

CR is one of few pure territorial jurisdictions. Only CR-source income is taxed in CR. UK dividends, UK pensions, UK bank interest — all not taxable in CR even if you become a CR tax resident.

CR taxes on your property

• Property tax — 0.25% of registered value per year
• Luxury home tax — applies above ~$270K. Progressive 0.25-0.55%. Most British buyers pay this.
• Transfer tax — 1.5%, one-time at closing
• Rental tax — 15% gross or 25% net (your election)
• Capital gains on sale — 15%

The DTA in negotiation

CIAT's announcement noted the talks cover "concepts to be used in the treaty and its future application, treatment of existing legal figures in the United Kingdom, transparent societies, types of trusts, pension plans, services taxation, international traffic and retention rates on passive income."

Practically: once ratified, the DTA streamlines the unilateral relief mechanism, formalises rates on dividends/interest/royalties, and provides treaty residency tie-breakers. It reduces friction; it doesn't fundamentally change the tax position.

Structures British buyers use

Direct personal ownership (most common)

Property in your name. Required for Inversionista. Simple. Tax flows: CR taxes CR-source, UK taxes worldwide with foreign tax credit relief.

Costa Rican S.A. / SRL

Property in a CR company you own. Useful for commercial rentals or transactions over $1M. Does not qualify for Inversionista under the 2024 amendment.

Tax residence migration

Spending >183 days/year in CR plus UK SRT analysis can make you non-UK resident — UK then taxes only UK-source income. Suits retirees fully relocating.

Sources: HMRC DT5200 Costa Rica · CIAT 2025 negotiations announcement. Information only, not tax advice.