Costa Rica, one of Central America’s most stable economies and home to an amazing five per cent of the world’s biodiversity, is at the forefront of the region’s property boom. Should you buy there?
By Gordon Miller
Pura Vida Villa, www.tropisphere.com
Costa Rica's stunning beaches, beautiful valleys, volcanoes, and jungles have been adopted by American babyboomers as the go-to destination of choice over the last decade. It helps that Costa Rica has been described by the IMF as 'the country that can confront the challenging global environment from a position of relative strength [because] the prudent fiscal stance of recent years provides the authorities with some room for manoeuvre'.
Underlining its attractiveness to foreign investment, the Costa Rican tax administration has introduced a new special accelerated depreciation for all new assets increasing the acceleration of the useful life to 60 per cent from the previous 50 per cent. The measure applies to all new assets purchased from January 2009 to the end of the year. The move is a part of the Costa Rican government's plan to promote commerce, protect the Costa Rican economy from the worst of the global economic downturn and to protect Costa Rican jobs.
At the forefront of the country’s employment strategy is an emphasis on sustainable development. More than 95 per cent of Costa Rica’s energy now comes from renewable sources – hydroelectric, wind and geo-thermal. Further recognising the value of its environment, Costa Rica was one of the first countries worldwide to impose a tax on fossil fuels. First introduced in 1997, the revenue generated by this 3.5 per cent tax funds the National Forest Fund to pay indigenous communities for protection of the surrounding forests.
The initiatives appear to be paying dividends. Globalpropertyguide.com reports that prices in Guanacaste, on the Northern Pacific coast (known as the new Gold Coast), have risen four times in the last three years, and 10 times over the last decade. House prices in the area, reports a local agent, Brad Butler of Emerald Forest Properties, are valued from US$200,000 minimum for a house, US$300,000 for a livable house, US$400,000 for something nice, and US$500,000 for a beautiful house.
Amanda Lamb gives us her top tips for buying abroad in 2009
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