Solidarity Tax Financing for Low Income Housing

Community Organizations International International

costa_rica_house_300 Central America For the next couple of weeks I’m going to be embedded in Central America, having cashed a horde of frequent flier miles to get to San Jose en route to Nicaragua and then Honduras, where ACORN International expects to open its 8th country operation, if all goes well in meetings to come.  For those uninterested in this part of the world…tune out until after the 1st of the year, but for the rest of us, this should be an adventure.

Passing through San Jose, it was interesting to hear and read about the “solidarity tax” or luxury tax on houses over a $172,000 USD valuation.  The tax is modest, about $500 per $200,000 let’s say, but the complexity of paying according to accounts gets the higher rolling, largely ex-pat owners in a penalty zone which can make the payments 10 times the original amount.  This is a new tax and the government of Costa Rica believes it will raise $17.5 million USD, which is dedicated to slum eradication and building low-income housing.  What a great idea!  People with homes that are too posh  pitch in a little bit to make sure that others have homes.  It was easy for me to see why the government called this a “solidarity tax.”  The chart published with the story in the Tico Times, which bills itself as Central America’s “leading English-Language Newspaper,” also  indicates that the tax is graduated costing just a little big more as the housing valuation moves from $172K up past $1 million USD, so that poor housing gets a bit more of a boost.

This may be an idea some of the “executive cities” in North America should consider, if you ask me.