No property tax this year for houses less than $24,000

People who have only a house and its value recorded in the municipality is less than ¢ 13,203,000 ($24,000), are exempt this year to pay tax on their property.

The properties above this value, and are also of a single owner, the tax will be applied above the ¢ 13,203,000.

For example, if the recorded value is ¢ 20,000,000, the tax will be on ¢ 6,797,000.

The tax is 0.25% above the recorded value of the house.

The exempt amount was established by the Ministry of Finance in a resolution issued on 3 February in the official journal, The Gazette.

The exempt value changes each year and is calculated on a base salary established by the Supreme Court, which is multiplied by 45, according to law and property tax reforms.

Under Article 4 of that Act, in addition to persons who have only one property, the property of the state, municipalities, autonomous and semi autonomous institutions, public education institutions are also exempted, during the first five years.

Those who must pay the tax could have the option to obtain a rebate if paid before 31 March this year.

Article 25 of the property tax law allows municipalities to discount the rate to those who pay in advance at a rate equivalent to the basic borrowing rate of the Central Bank at the time of payment (currently 8 %).

Some municipalities offer this discount.

For example, in the Municipality of San Jose, journalist Carmen Azofeifa said that this year they implemented an 8% discount on real estate tax on those who paid before March 31, the amount for the entire year.

In the Municipality of Heredia, the director of services and revenue management, Sanchez explained that they applied a 5% discount and the Nicoya, Finance Director, Franklin Sequeira, said no discount applied for prepayment.

Atenas prepares to attract investment through new road

Atenas wants to use the opening of the new road to Caldera to become a magnet for investment.

The 80-kilometer route between San Jose and the port esparzano goes through the Escobal and Concepcion district, located in the south of Atenas, where villagers say they are proud of enjoying the "best climate in the world."

These two populations are under the new regulatory plan of the canton of Athens and would be ready in 10 months for industrial development.

Cristian Arias, legal director of the local municipality, said Escobal and Concepcion present "ideal" topographic conditions for new businesses to settle there.

"The site is flat and is just near the new road," said the lawyer, who appeared confident in the Atenas community's efforts to attract companies to the district, as Multifrío.

The company reported yesterday in San Jose the opening of its new corporate headquarters in Atenas, which is located five minutes from the highway.

Multifrío new facilities will open their doors in June and July, with an investment of $ 2.5 million.

The mayor of Atenas, Wilberth Aguilar said he was hopeful that other companies will follow Multifrío efforts, which will generate 50 to 70 new jobs in its early stage.

To be an attractive, Arias explained that the municipality supports the recruitment of personnel in a district with an unemployment rate of 2.35%, according to 2005 figures provided by the staff based on the Human Development Atlas Cantonal Program United Nations Development Program (UNDP) and the University of Costa Rica. They are the latest available data. The estimated population is 26,000 people there.

Both the mayor and the legal director said that Atenas has "sufficient" and "qualified" people to meet the needs of the new companies.

Other efforts identified are reducing the time for issuing business licenses or zoning permits.

Arias said the resolution time was reduced from 30 days to eight days at maximum.

The legal director of the Municipality of Athens did not rule out, once ready the master plan, the district can bid on the opening of free zones.

The aim is that future companies setting up in these schemes benefit from the incentives of the new law, adopted last December.

In short, companies that are outside the range (GAM as Grecia, Valverde Vega, Naranjo, Palmares and parts of San Ramon) will not pay rent on their profits during the first 6 years. This tax is 5% over the next 6 years and 15% in the next 6 years.

Costa Rica real estate bank repo auctions

Realizing the dream of being a Costa Rica real estate home owner can be easier if you consider the option of real estate auctions.

These auctions allow any person to acquire a property easily and at a lower price.

José Francisco Araya, director of corporate relations at the National Bank, explained that financial institutions use auctions to offset a debt not paid to the bank.

The process starts when a person can not afford the payment of a loan, so the bank decides to auction the mortgaged property to recover the money that was provided to the debtor.

This method represents a great advantage for people interested in buying a home because they can buy real estate anywhere in Costa Rica at a price less than the regular market.

Process. The auction begins when the bank announces the list of real estate they wish to sell. "Under existing legislation, the Official Gazette will publish edicts (or warnings) of real estate that are under auction, and one can review the court file and find the details of collection and the auction," said Manfred Saenz, legal director of Scotiabank.

Also the banks usually a publish the list in the mass-circulation newspapers and even on their websites to promote these properties and to get maximum exposure.

The auction, which is open to the public, takes place at the same court where the property was ordered to go into auction.

At the exact time indicated, the judge and the town's mayor will announce the auction in a loud voice, so that bidders know and to read the edict.

Then the public will make their best offer, provided that exceeds the base price set by the bank. The process ends when the asset is awarded to the highest bidder, who must pay a deposit of 30% of the asking prce and will have three days to pay the remainder.

According to the experts consulted, the main advantage of an auction is that property prices in most cases are low compared to the Costa Rica real estate market.

"As the banks are not looking to profit, but just to recover its debt. For that reason, it may be attractive to customers, "said Araya.

Another benefit is the variety of real estate available. Not only houses or lots are available, but you can find farms, stores, condominiums and apartments

As for disadvantages, the main one is that people are at risk of participating in the auction without first having seen the condition of the property.

You also do not have a plan and do not know what quality is the construction.

In addition, you need to take into account that the process can be very bureaucratic and time-consuming, especially if the property is occupied as you will need to evict the tenants.

If you want to break into this business, you first have to decide to purchase. Some people prefer to buy a condo in Guanacaste, while others get older houses to rebuild them and sell them at a higher price.

Then you have to set the budget available to buy and remodel the property if necessary. For this, Romero recommends you hire a surveyor to help you locate the property and assess it.

Steps to follow

Check regularly in the Official Gazette and the big name newspapers where the list of real estate (houses, lots, condominiums and offices) are listed . Call the bank to obtain the background of the property. They will tell you what's the base bid price, the location of the property and the construction area. Take the opportunity to visit the home or lot to learn about the real conditions of the property. If interested you should go to the court to submit your best offer. The successful bidder in the auction must submit 30% of the amount and then will have three days to deposit the rest of the funds, otherwise the process is declared void ad you will lose the 30% deposit. In many cases banks will offer the buyer the option to finance to complete payment of the total amount of the payment and you will be an owner of a piece of Costa Rica real estate.

Costa Rica is heart of operation for Procter and Gamble

After ten years in Costa Rica, the multinational company Procter and Gamble (P & G) says that Costa Rica became the heart of its financial operations in America and a vital piece to address the effects of the recession through the sale of its personal care products .

The company strengthened its financial services in Santa Ana, San Jose, where a group of 350 analysts in Costa Rica is in charge of transforming the business undertaken by 14 P & G headquarters in Latin America, USA and Canada.

The target area of Business Transformation is to make a more profitable operation in the continent and to enable the company to improve the price to its customers' products like shampoos, soaps and other items explained Alejandra Cobb, manager of Corporate Relations.

"We must be able to offer a good value equation to our customers. That puts pressure on the operation in Costa Rica, because we have give to business efficiency, "said Cobb.

The company did not generate the expected additional 1,300 jobs that they currently have.
"Our plan is to maintain the current payroll during this crisis," said Cobb.

P & G was the second foreign firm to arrive in Costa Rica in 1999.

Gabriela Llobet, director of the Coalition for Development Initiatives, said that their arrival "put the country on the map for investors and prompted the arrival of Hewlett Packard (2003) and IBM (2004).

Currently, the country has 81 service firms employing 24,000 people. Ten years ago, there were two with 700 employees.

P & G is a trans national firm born in 1837 in Ohio, and is dedicated to the manufacturing of goods for mass consumption with more than 300 brands. In 1980 it began a rapid expansion to other countries.

In 1999, as part of a reorganization, which sought greater efficiency in their business model , they decided to handle the finances of all its American headquarters in Costa Rica.

Salvadoran Group will invest $15 million hotel in Escazu

The Salvadoran group Agrisal in Costa Rica will invest about $ 15 million to build its first hotel outside of El Salvador.

Eduardo Quinones, director of the hotel division of Agrisal, reported that the property will operate under the Holiday Inn brand and will be located in Escazu, close to the CIMA hospital. However, he did not specify the exact site.

"We did a very thorough analysis and we agreed that Costa Rica has the best conditions for the first hotel outside of El Salvador. You have done an outstanding job in positioning the country in tourism, "he said by telephone.

He stated that the first stone was placed in September, with the idea that the hotel opens its doors in late 2010. The construction will generate 300 direct jobs, and just over 150 permanent openings.

The arrival of Agrisal in Costa Rica is not its first venture in Costa Rica. The Salvadoran group has links with InterContinental Hotels Group (IHG), which currently has four hotels in San Jose.

The agreement was signed with IHG in 2007 and not only for the opening of the Holiday Inn in Escazu, but six other hotels in the rest of Central America.

Agrisal will invest $70 million in the opening of seven properties in Costa Rica, Guatemala, Honduras and Nicaragua in a period of five years.

The Holiday Inn will have 10,000 square meters of construction, spread over six floors and a cellar. The new hotel will have 163 rooms, a meeting room over 800 square meters for activities, spa, gym, restaurant and a terrace pool.

Quinonez noted that this new hotel option is "green" since it will plant wastewater treatment systems, low lighting (and take advantage of natural light) and intelligent systems. Furthermore, all its internal and external practices are compatible with the environment.

The Holiday Inn is betting on excutive tourism, but will not exclude the so-called medical tourists. Apart from their uniqueness, Quiñónez added that the hotel will offer competitive rates.

"We know that competition is tough, but it's healthy. Costa Rica hotels has the best platform at the regional level, but we will offer a different product, "he said.

Although premature, the executive did not rule out that Agrisal will invest in another hotel in the country. Everything depends on the results of its first hotel outside El Salvador.

Foreign banks lending again to local banks

Foreign banks open new credit lines to local banks.

Liberman and Luis Gerardo Corrales, manager of BAC San José and Scotiabank both confirmed the news yesterday.

For customers of Costa Rican banks, this means that there is greater availability of dollars to lend. Moreover, interest rates for such loans have fallen.

"They have been normalizing (external borrowing). Maybe not at the level of 2007 and 2008, where the liquidity was very high, but the big banks have been reactivating credit to the Costa Rica, a little more expensive than in the past, "said Liberman.

According to Corrales, "international banks showed a more flexible, even more willingness to reassess the availability of funds at competitive rates."

This is what Corrales came out with during the annual meeting of the Inter-American Development Bank recently held in Medellin, Colombia.

The global economic crisis had hindered the access of external funding.

25% of deposits in private banks in the country comes from abroad.

Corrales emphasized, for example, that BAC San José recently received a disbursement of a $225 million funding awarded to Central America by a private sector office of the U.S. Government.

He commented further that the recent capitalization of $5.000 million from the Central American Bank for Economic Integration (BCIE) "suggests that the shortage of dollar liquidity that was last year, especially in the last quarter, is disappearing."

Lower rates. For Corrales, the greater availability of credit in U.S. dollars is reflected in lower rates for loans.

It's estimated that the rates for loans in dollars declined from about 13% in 2008 to 9% this year.

Luis Carlos Delgado, president of Banco de Costa Rica, also stressed that the rates in dollars have fallen due to the lower cost of fundraising and the efforts of banks.

According to data published by the Central Bank, for housing, for example, the average rate in dollars offered by private banks rose from 13.16% in December 9, 2008, to 12.09% by May 5.

In State banks the rates were stable for that period.

Moreover, bankers consulted also agreed that there are signs that credit is being revived locally.

"I can say that in the last 45 days people have been knocking at the doors with projects and other real estate investments in Costa Rica," Delgado said.

IHG Group to open 2 beach hotels

The firm Intercontinental Hotels Group (IHG) gets into beach hotels in Costa Rica.

Jim Abrahamson, president of IHG in the Americas, said that plans are underway to open two resort hotels in Guanacaste and the Central Pacific.

"The economic crisis has impacted in Guanacaste, but we believe it is a short term phenomenon. The province is a good place, like the Pacific coast, especially now with the opening of the road (Caldera).

Abrahamson did not specify how soon they will open because of the overall financial situation and the fact that the development of hotels here takes time. "

So far IHG has five hotels in the country, all in San Jose: Real InterContinental, Crowne Plaza Corobicí, Aurola Holiday Inn, Holiday Inn Express and Indigo, which opened in May 2009.

Indigo has 100 rooms, is stylish and boutique is located near the Forum in Santa Ana, San José.

Abrahamson explained that they chose Santa Ana for its business development and strategic location.

Indigo is the first brand that IHG opened in Latin America. The infrastructure of the hotel is owned by the firm Prime Holding.

Luis Hernandez, president, Prime Holding, said they invested $ 12 million in the building.

IHG also plans to open a sixth hotel in San Jose in 2011. It will be a Holiday Inn, which will be done in partnership with the Group Agrisal of El Salvador.

IHG is one of the largest groups in the world. The firm manages, leases or franchises 4150 hotels with 620,000 rooms in 100 countries all over the world.