Buying in Costa Rica is straightforward — but as a US citizen, the IRS still wants to hear about it. Here’s a plain-English 2026 guide to the US tax rules for Americans who own Costa Rica property. (This is general information, not tax advice — always use a cross-border CPA.)
Buying the property is not a taxable event
Purchasing real estate itself doesn’t create a US tax bill. What triggers reporting is how you hold funds and the property, and any income it generates.
FBAR (FinCEN Form 114)
If your foreign financial accounts — including the escrow account used to close — exceed $10,000 combined at any point in the year, you must file an FBAR. It’s informational (no tax), but penalties for missing it are steep.
FATCA (Form 8938)
Higher thresholds (e.g. $200,000 for many expats) require Form 8938 with your 1040. Directly held real estate isn’t itself reportable, but foreign accounts and certain entities are.
Holding through a corporation (Sociedad Anónima)
Many buyers title property in a Costa Rican corporation for liability and transfer ease — but for the IRS that can mean Form 5471 and extra complexity. Weigh the trade-offs: owning through a corporation.
Rental income
Renting your Costa Rica home (long-term or Airbnb) is reportable US income, but you can deduct expenses and claim foreign tax credits for Costa Rican tax paid, avoiding double taxation. See vacation-rental income.
Costa Rica’s side of the ledger
Low and simple: 0.25% annual property tax, a luxury-home tax on high-value homes, 15% capital gains on investment sales, and 13% VAT on short-term rentals. See property taxes and capital gains tax.
Estate planning
Coordinate US and Costa Rican estate rules so heirs aren’t caught out. See wills & inheritance for foreign owners.
Frequently asked questions
Will I be double-taxed? Rarely — foreign tax credits and the US-source rules usually prevent it.
Is the escrow account an FBAR account? Yes, count it toward the $10,000 threshold.
Do I owe US tax just for owning? No — only income and certain structures create filing duties.
Talk to a Costa Rica Real Estate Expert
Costa Rica Retirement Vacation Properties has helped buyers from the U.S., Canada, and Europe find homes, condos, lots, and investment properties since 2010. Browse our current listings or contact our bilingual team for a free, no-pressure consultation — by email, phone, or WhatsApp.