Living in Costa Rica

In Costa Rica, foreign-source income is not taxed, whatever your residence status. You will, however, pay into the CCSS, the mandatory social security, and face a higher cost of living than in neighbouring Central American countries. Homeschooling sits in a grey area.

Cost of living and cities

San José and the Central Valley (Escazú, Santa Ana, Heredia) gather jobs, private hospitals, international schools and the main airport. The highland climate stays mild year-round, and our grid rates San José as mid cost. Puntarenas and the Pacific coast are by the sea and cheaper, with fewer shops and less care. In the north-west, Guanacaste has its own international airport in Liberia.

The colón is the official currency; the US dollar circulates widely for rents and property, hence dual price tags. Costa Rica is more expensive than its Central American neighbours, especially for imported goods and cars.

Roads are often slow, winding and congested at rush hour around San José. The rainy season, roughly May to November, weighs on travel along the Pacific side. Our grid scores infrastructure 6/10 and space 8.5/10. Budget a car, insurance and real travel times before choosing a city.

Personal tax and residence

Costa Rica applies a territorial system: foreign-source income is not taxed, whatever the residence category. Costa Rican-source income follows a scale our grid summarises as 0–25%. VAT is 13%.

Work physically performed in Costa Rica for a local employer is local-source. For a remote worker paid from abroad, the answer depends on status and contract: get written advice. The specific exemptions of the digital nomad regime (Law 9996) were due to expire in July 2026; check their current status before relying on them.

All legal residents must enrol in the CCSS (the Caja) and contribute based on income. That contribution works as a recurring levy: budget it alongside tax. If you are leaving Europe, most of the tax risk sits at home: your home country’s tax residence and CFC rules.

Family, school and healthcare

The Central Valley concentrates bilingual and international schools; on the coast, a few tourist hubs have schools, with little choice. Homeschooling is a grey area in our grid, with sources diverging between attendance duty and practice. Have your case checked by a local lawyer.

The CCSS gives access to the public system, with waiting times for non-urgent care; many expats add private insurance for San José’s private hospitals. Outside the Central Valley, plan trips to see a specialist.

Visa, pace and daily life

The main residence categories are pensionado (pension), rentista (stable passive income), inversionista (investment) and the digital nomad status. Each has its own thresholds and documents, which change: check them with the General Directorate of Migration and Foreigners before building the file.

Processing can take several months. While waiting, keep income proofs, apostilles and translations up to date. CCSS enrolment is part of the path once residence is granted.

Day to day, Spanish opens doors outside tourist areas. The pura vida pace is real and applies to government offices too. Plan several weeks on the ground for banking, the lease and paperwork.

Costa Rica suits a retiree or passive-income earner who wants nature and access to public care, and accepts paying the CCSS. On a tight budget, money goes further in Paraguay or Bolivia.

Common mistakes: leaving the CCSS out of the budget; assuming work done locally is foreign-source; choosing the coast without a school or health plan; treating Ranking scores as tax advice.

Living here

Main cities

Liberty scores

Overall score (equal weights) : 6.3/10

Ranking Liberty-mode scores 0–10. Higher is more favourable for that criterion.

Personal taxation

Indicative Ranking labels: verify local law.

Homeschooling

Grey area

Conflicting sources (attendance duty vs practice): verify locally.

Indicative status (self axis): verify local law.

Real estate

Compare in Liberty mode Living-here page

FAQ

Is my foreign income taxed in Costa Rica?

No, the system is territorial: foreign-source income is not taxed, whatever the residence category. Work performed locally can change the answer.

Is the CCSS mandatory?

Yes for all legal residents, with a contribution based on income. Many expats add private insurance.

San José or the Pacific coast?

San José and the Central Valley for schools, healthcare and a mild climate; Puntarenas and the coast for the sea and lower costs, with fewer services.

Is homeschooling allowed in Costa Rica?

Grey area in our grid, sources diverge. Get written local legal advice before relocating.

Read next

• Live free + real company: cross checklist
• Homeschooling: reading territorial status
• All countries

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