Live in Belgium, Switzerland or Quebec and tempted by a property in the Costa Rican sun? Before you even start comparing properties, one question outweighs all the others: how will your country of residence treat this foreign income, and do you risk being taxed twice? Here, country by country, is what you need to know before you commit.
Investing in Costa Rica from Belgium, Switzerland or Canada first means acknowledging a legal reality that is best stated up front: Costa Rica has signed only four double-taxation treaties currently in force — with Germany, Spain, Mexico and the United Arab Emirates. Neither Belgium, nor Switzerland, nor Canada appears on that list. This does not mean, however, that you will automatically be taxed twice: it all depends on how your country of residence treats foreign-source real-estate income on a unilateral basis. And on this point, the three profiles differ markedly.
The starting point: Costa Rica’s territorial tax system
Costa Rica applies a territorial tax system: it only taxes income of Costa Rican source. In practice, your property will be taxed there “at source”, whatever your country of residence:
- Rental income: an effective 12.75% (a 15% rate applied after a flat 15% allowance);
- Capital gains on resale: 15%;
- Transfer tax on purchase: approximately 1.5% to 2%;
- Annual property tax: 0.25% of the property’s value.
One crucial point: Costa Rica grants no tax credit for tax you pay elsewhere abroad. The burden of neutralising — or not — double taxation therefore rests entirely on your state of residence. This is precisely where Belgium, Switzerland and Quebec follow very different logics.
For a breakdown of acquisition costs, see our guide to the cost of buying property in Costa Rica; and for resale, our dedicated article on real-estate capital gains.
Belgium: partial double taxation
Investing in Costa Rica from Belgium places the Belgian resident in the least favourable of the three cases — without being penalising for all that. In the absence of a treaty, the property must be declared: it goes in box III (cadre III) of the personal income tax return, where the tax authorities assign it a cadastral income.
In the absence of a treaty, this foreign real-estate income is taxed at the progressive scale — but with a 50% reduction of the tax relating to it. Note the nuance: this is a reduction, not an exemption. Exemption (subject to the progressivity proviso) is reserved for property located in a country linked to Belgium by a treaty: that is not the case for Costa Rica. The result: a partial, or residual, double taxation, since the property remains partly taxed in Belgium after already having been taxed in Costa Rica.
Switzerland: the lowest exposure
For anyone wishing to buy in Costa Rica from Switzerland, the situation is paradoxically the most comfortable of the three — even though no treaty exists (negotiations were relaunched in July 2024, but nothing is yet in force).
The reason lies in the Swiss practice of international allocation (répartition internationale): Switzerland unilaterally exempts real estate located abroad, both rental income and the value of the property (wealth tax). It therefore applies a genuine exemption method. One important proviso nonetheless remains: the progressivity proviso. The Costa Rican property and its income must be declared — not to be taxed in Switzerland, but to determine the rate applicable to the rest of your taxable income and wealth. Exposure to Costa Rica double taxation is thus the lowest of the three profiles examined.
Canada / Quebec: the foreign tax credit
Real estate in Costa Rica for a Quebec or Canadian resident follows a third logic. Here too, no tax treaty binds the two countries: there is only a tax information exchange agreement (TIEA), in place since 2012. As the Canadian resident is taxed on worldwide income, they must declare the Costa Rican rents on their federal (T1) and Quebec (TP-1) tax returns.
Two points warrant your attention:
- T1135 filing. This form — the “Foreign Income Verification Statement” — becomes mandatory as soon as the total cost of your specified foreign property exceeds CAD 100,000. A property rented out for profit is subject to it; a property for strictly personal use is excluded.
- Foreign tax credit. Double taxation is mitigated by a unilateral credit (form T2209 federally, TP-772 in Quebec). This credit is nonetheless capped at the Canadian or Quebec tax corresponding to that same income: if the Costa Rican tax is higher, the excess cannot be recovered.
At a glance: the comparison table
| Criterion | Belgium | Switzerland | Canada / Quebec |
|---|---|---|---|
| Tax treaty | None | None (negotiations relaunched in July 2024) | None (only a tax information exchange agreement — TIEA — since 2012) |
| Declaring the property | Yes — box III, a cadastral income is assigned | Yes — international allocation, with progressivity proviso | Yes — worldwide income (T1 / TP-1); form T1135 if specified foreign property exceeds CAD 100,000 |
| Relief method | 50% reduction of the related tax (no exemption) | Exemption of income and wealth, subject to progressivity | Foreign tax credit (T2209 / TP-772), capped at Canadian/Quebec tax |
| Residual exposure | Partial | The lowest of the three | Variable, mitigated by the (capped) credit |
The overall picture is clear: Switzerland neutralises double taxation almost entirely, Canada-Quebec mitigates it through a capped credit, and Belgium halves it without ever erasing it completely.
Practical steps common to all
Beyond taxation, the purchase itself follows a common framework, whatever your country of departure.
The escrow account. Funds pass through an escrow account managed by a SUGEF-registered provider, Costa Rica’s financial regulator. This is both the norm and a safeguard: the money is only released to the seller once all the conditions of the sale have been met.
Proof of the origin of funds (KYC / AML). Anti-money-laundering law 8204 requires you to justify the source of your money: passport, bank statements, proof of sale of another asset, sometimes certification by a local accountant. Prepare these documents in advance to avoid any last-minute blockage.
The currency. Transactions are commonly denominated in US dollars (USD), rents included.
Repatriating the rent. This is done by international transfer, subject to the same KYC/AML checks on both the sending and receiving bank sides; anticipate the supporting documents.
The local bank account. Opening one is harder for a non-resident. Some institutions have a reputation for being more accessible (BAC Credomatic, Scotiabank, Banco de Costa Rica). The good news: the escrow + lawyer combination often makes it possible to close the purchase without a local account beforehand.
Frequently asked questions
Is there a tax treaty with Costa Rica?
No, not for the countries of interest here. Costa Rica has only four double-taxation treaties in force: Germany, Spain, Mexico and the United Arab Emirates. None involves Belgium, Switzerland or Canada.
Will I be taxed twice?
Not necessarily to the same degree. Costa Rica taxes you first, at source. Then Switzerland exempts the property (subject to the progressivity proviso), Canada-Quebec grants a capped foreign tax credit, and Belgium reduces the related tax by 50%. Double taxation therefore ranges from almost nil (Switzerland) to partial (Belgium).
Do I have to declare my property even if Costa Rica has already taxed it?
Yes, in all three cases. Since Costa Rica grants no tax credit, it is your country of residence that neutralises double taxation — but only if you have declared the property to it: box III in Belgium, international allocation in Switzerland, worldwide income and possibly T1135 in Canada.
Can I buy without a bank account in Costa Rica?
Often, yes. Using a SUGEF-registered escrow account and a local lawyer frequently makes it possible to complete the purchase without first opening a Costa Rican account, since opening one is more complex for a non-resident.
Preparing a purchase from Europe or Canada? Contact our French-speaking team: we point you to the right people — escrow, lawyer and accountant — to secure every step of your investment.
Tendance Immo Latina is a real-estate agency, not a tax advisory firm. The information above is provided for guidance only, up to date as at the publication date, and in no way replaces the advice of a professional. The applicable tax rules and regulations (treaties, thresholds, rates, procedures) may change. Be sure to consult a tax adviser in your country of residence as well as a lawyer or accountant in Costa Rica before making any investment decision.
