Costa Rica's Government Could Seize Property

Costa Rica's Government Could Seize Property, Wages, and Pensions Without a Judge's Order

Costa Rica's Ministry of Finance (Hacienda) presented a bill to the Legislative Assembly this week that would radically change how the country collects tax debts. The proposal seeks to reform the Code of Tax Regulations and Procedures so that the General Directorate of Taxation (Dirección General de Hacienda) can carry out seizures of property, cash, wages, and pensions without going through a judicial process, as currently required.

If passed, once all administrative and judicial appeal options on a tax debt are exhausted, the Collections Office would rely on "enforcement units" — teams led by a lawyer — deployed nationwide to notify debtors, investigate their assets, and directly execute precautionary measures.

The mechanism includes a 15-day window for taxpayers to reach a payment arrangement before a seizure takes effect. Assets Hacienda could seize include cash in bank accounts, a portion of wages and pensions, credit or debit card payments (up to 75%), movable and real property, business establishments, and other rights or receivables. A judge's involvement would be limited to cases requiring a property search warrant or claims filed after the seizure has taken place.

The government justifies the measure by pointing to the enormous backlog in the judicial system: nearly 760,000 pending collection cases that, as the Judicial Branch itself acknowledges, have become a bottleneck. The bill must now go through a legislative committee and would need 29 votes to pass (or 38 if it's determined to affect the functioning of the Judicial Branch).

While reforms like this aim to speed up tax collection, they also raise the stakes for keeping your tax obligations current and getting timely advice, since the window to respond to a debt could shrink considerably if the law is approved.

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