Newspaper article The Canadian Press

'Never Advised:' Manitoba Premier Penalized for Unpaid Back Taxes in Costa Rica

Newspaper article The Canadian Press

'Never Advised:' Manitoba Premier Penalized for Unpaid Back Taxes in Costa Rica

Article excerpt

Manitoba premier owed property tax in Costa Rica

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WINNIPEG - Manitoba Premier Brian Pallister has been penalized for taxes owing on his vacation home in Costa Rica.

Pallister said he failed to update the evaluation of his property as required by Costa Rica law, which meant he didn't pay a national tax on luxury homes.

"The valuations were supposed to have been, in hindsight, done every three years and you're responsible for doing them," Pallister told The Canadian Press on Friday.

"At the outset, we were never advised that we owed anything on this, and actually were told we were not in this (luxury) category, so we had no reason to believe ... that we would owe anything."

Pallister said he has paid what he owed -- roughly $8,000 in back taxes and penalties -- after going to Costa Rica last week to clear up the issue that has dogged him for months in the legislature and in the media back home.

Pallister was unable to provide documents Friday to show the amount owed and paid. He said he expected to receive them next week.

The premier and his wife purchased the property on a hillside in Tamarindo in 2008. The main bungalow measures 3,400 square feet, according to design plans, and has what Pallister calls a "small finished area" in the basement with a piano and TV room.

There is also a pool, a groundskeeper's quarters and a gym.

The year after Pallister purchased the property, Costa Rica brought in a national tax on homes with a construction value of 120 million colones -- about $275,000. The tax is in addition to local taxes, which Pallister says he has always paid, and its threshold rises each year roughly in line with inflation.

The luxury tax is complex. It is not based on market value or estimates filed for construction permits, but instead on the type of building material used in each room, the area covered by each material and other factors. …

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