To all our Canadian owners and friends, HAPPY CANADA DAY! Enjoy! We do not have the Duke and Duchess of Cambridge visiting Costa Rica just yet, but we do have 31 degrees of sunny weather and the Costa Rica July vacations to look forward to. Little Summer has great weather, sunny and hot, highs around 32. Once the excitement has died down, make your plans for another holiday! Thanks to CBC for the photo.

Why are these people not in Costa Rica? Because it's not snowing!

Price is what you pay, value is what you get. Check out our earlier posts on rentals for the Tamarindo Beach Marathon. We are selling out rapidly. We still have a couple of great deals available, but not for much longer. You can call (506) 2653-6331.

The Oaks Tamarindo is now offering SnowBird 50% discounts for one month rentals or longer next winter. How does it work? Just call or email the Oaks office and reserve your place at The Oaks for one to five months. Rentals during the season are $1,500 per month, which works out to only $375 per week. (This low rate does not include a one month rental during New Year or Easter, which are the peak seasons.) If you can only stay a week or two, get together with some friends and make your monthly rental together, one family arriving as the other departs. This trick alone can get you unbelievable weekly rentals at only $375.

Now, the discount. If you buy a second home through our office, whether or not it is at The Oaks, through our office, 50% of your rent, up to a maximum of $3,000, will be applied to your investment. So you can search for your next great investment from the comfort of The Oaks while taking your time.

Skype The Oaks, Tamarindo, call (506) 2653 6331 or email Robert@theoakstamarindo.com. Limited offer.

Three years ago we posted SNOWBIRDS IN COSTA RICA. Let’s catch up.

Ken still comes down every winter to snowbird in Costa Rica. He seems healthier and happier than when we first met. A local Tico, Bryan, looks after his condominiums for him and arranges tours for renters and guests. John and Raylene still visit two or three times a year, but perhaps because of school age children, cannot enjoy the true status of being Snowbirds except for brief visits. Ed and Kris are enjoying Costa Rica more. In addition to their condominiums at The Oaks, they recently bought a horse, which they board at a horse farm about four miles from The Oaks. The weather has been variable, but only within about two degrees Celsius. This past “summer”, which usually runs from mid-November through mid-April, was longer this year, extending until just three days ago, almost mid-May. It was slightly cooler than last summer, with highs usually around 33 degrees instead of 35 degrees (that’s about 91 to 95 degrees Fahrenheit). The people are unchanged here in Guanacaste, still peaceful and laid back. “Work” continues to be a four letter word, but that bothers me less as time goes by.

The foliage at The Oaks has developed nicely. Saving 70% of the trees during construction was the right decision. Bougainvillea is now flourishing, and Rox is helping by seeding some spice gardens. My favorite spice is hierba buena. Just so you don’t get the wrong idea, it is a native mint, excellent for mojitos, and with medicinal qualities. Not to be added to brownies.

Luckily, the rise and fall of real estate prices at The Oaks is only an echo of what happened in the U.S. More about the reasons for that later. Asking prices peaked on average at 50 to 60% above what our early Snowbirds paid, and since have fallen from the peak by about 30%. Fire sales within Tamarindo and Flamingo are clearing the inventory owned by distressed real estate owners, mostly from the U.S. It appears that the low point was reached about one year ago. There are still incredible bargains, but, the most distressed owners having already sold, there are fewer than last year. No mistake, it is still a buyer’s market in Costa Rica, but a recovering one. So far as we know, The Oaks has had three fire sales, but in each case the unit was snapped up before the public even became aware of it. In one “fire sale”, a speculator from the U.S. actually made a profit on her “fire sale”.

The biggest changes on the ground, after three years, are that despite my cynicism Costa Rica has improved  infrastructure in highly visible ways. The three improvements that come to mind are the dramatic improvement of the hospital in Liberia, expansion of the airport in Liberia, and construction of a new CIMA hospital 40 minutes from The Oaks, behind the Do It Center. On the not so shiny side of the coin, we continue to wait for the road from Villa Real to 27 Abril to be paved.

Oh, and we now have rental units available for Snowbirds for next year. Ask us about our “rent to buy” program, where you can get your rent applied  to your purchase of a Costa Rica property. You are not even restricted to a purchase at The Oaks, although we do encourage that. The only requirement is that you work with Green Seal Realty S.R.L. Green Seal will rebate 50% of its commission on sale to you, up to the amount of your rental. Contact us for details at (506) 2653 6331 or Skype name The Oaks, Tamarindo.

Olive Ridley turtles swim ashore from the sea by the thousands in late October, dig shallow nests in the warm sand of Playa Ostional, lay their eggs, and then return to the sea. We made the scenic 90 minute drive from The Oaks accompanied by some friends, species Snow Birds, genus Canadienses, who were delighted to share this warm weather spectacle. This is one of the advantages of being an EARLY SNOW BIRD. Here you can see the mother turtle making her nest and laying her eggs, some perspective as to the size of the turtles, and her successful return to the sea. This is a great outing with children. At least when we were there, there was no charge during the day, and a slight tourist charge at night. Best of all, photos are OK during the day, not allowed at night, and you get a beautiful sunset on your drive back home.

In discussing Costa Rica real estate taxes, I forgot to mention the 2011 tax amnesty for late payments. Costa Rica real estate tax law has a funny wrinkle: there is a 5 year statute of limitations on catching tax cheats.

Article 73 of Law no. 7794 states:

Artículo 73: Los tributos municipales prescribirán en cinco años y los funcionarios que los dejen prescribir responderán por su pago personalmente.

A direct effect of this peculiar statute of limitations is that some ticos simply do not pay their real estate taxes, ever, taking their chances that they can slip by the 5 year statute of limitations. A side effect of this peculiar statute is that in 2011 many municipalities, including Santa Cruz, have declared an amnesty on penalties for late payment. While not documented, it appears that this amnesty will apply to payments made until August 2011.

As a result, many foreign property owners are waiting a bit before paying their taxes to see if the exchange rate improves.

Real estate property taxes in Costa Rica are levied at the rate of $0.25 per $100 on a property’s assessed value. This assessed value is fixed for 5 years, after which the value is reassessed. At The Oaks, the assessment established in 2008 results in a tax of 132,154.78 colones per year, or $254.51 CAD at the current rates of exchange of 494.5 colones per U.S. dollar and $0.95 USD per $CAD. Current resale values at The Oaks are between $170,000 and $190,000 CAD, resulting in an effective tax rate of $0.14 per $100.

There is a second real property tax in Costa Rica that needs to be considered, the “solidarity tax”, or “luxury tax”. The proceeds of this tax, which starts at an additional $0.25 per $100 and tops out at $0.55 per $100, are supposed to be used to build housing for the poor. This tax loosely applies to homes having a value over $200,000 CAD. Loosely, because values are calculated based on a manual of replacement costs, not on fair market values. This manual values luxury construction at about $900 a square meter, so in practice it starts to bite homes having over 200 square meters of construction area. (Since each condominium at The Oaks has 91 square meters of construction area, this tax will not apply.)

How does this compare with taxes in Canada?  As a rough approximation, we can calculate tax rates in Calgary at $0.57 per $100 of assessed value. To buy a condominium in Calgary similar in size and construction values at The Oaks would cost around $300,000 CAD. Reduce the assessed value by about 20%, and annual property taxes would be around $1,268 per year, with an advantage of about $1,013 a year to Costa Rica.

Total advantage to Costa Rica, right? Not totally. For a retiree or second home owner, the most valuable service provided by property taxes is police. In Costa Rica, the “fuerza publica”, or police, are famously inept, as is the rest of the judicial system, in preventing or punishing crimes against property. Hence, the need for private security. Costa Rica is a peaceful place to live, especially in Guanacaste, but…you cannot leave your stuff unwatched. Petty theft is common. And if you leave valuables unwatched, not so petty theft is common.

The Oaks is protected by 24/7 private security, as well being a gated community, giving you peace of mind when you are in and out of country. This comes at a cost, however, of about $708 CAD per condominium per year for a private security service, or about $59 per month per condominium. This amount, instead of being paid by real estate taxes, is paid by your common area maintenance HOA fees. Considering security, as reflected in HOA fees, the cost advantage for Costa Rica then works out to about  $305 CAD a year or $25 a month.