FAQs

What are the Real Estate Closing Costs?

The Real Estate Closing Costs amount roughly to 4% of the property value. In detail:

• Transfer Tax 1.5%
• National Registry Stamp 0.5%
• Documentary & Fiscal Stamps 0.3%
• Notary Registration fees
  • up to 10 Mio. Colones 2%
  • on the next 5 million colones 1.5%
  • on the next 15 million colones 1.25%
  • on the remaining sum 1%

The percentages refer to the purchase price in the contract or the value indicated in the municipality’s register – whichever is higher.

Can foreigners buy and own property in Costa Rica?

Land ownership by local and foreign citizens in Costa Rica is protected by the country’s constitution and laws. Foreigners do not have to be citizens or residents of Costa Rica to acquire their own land, neither do they have to stay there permanently.

Do I really need a Realtor when buying a home?

In almost all cases it is just not true that you will get a better deal when buying directly from the owner. This certainly is the case if you’re a tourist or foreigner with limited knowledge of the market, the language and customs. You will most likely be better off if you choose a registered Real Estate Broker who will help you through the negotiations and the paperwork.

Who pays the Realtor fees when buying a property?

The broker commission is always paid by the seller.

How to make a property purchase?

1. find a good lawyer / notary (we can help you)
2. draw up a preliminary contract (Sale and Purchase Agreement, Opción de Compraventa) if necessary
3. make a down payment to an escrow account, to the notary or directly to the seller (usually 5-10% of the purchase price)
4. “due diligence”, i.e. checking the property rights and all other requirements for the purchase/sale (takes about 1-3 weeks). This is the complete legal investigation of the property to ensure that there are no liens, liabilities or legal issues and that ownership is absolutely unrestricted. Surveys, soil tests, home inspections and other studies if necessary. If the property is being sold with an existing business, investigation of the business for any legal problems will also be completed during the due diligence process
5. payment of the remaining amount to an escrow account or to the notary public
6. signing of the purchase contract: the closing (delivery of the deed) takes place in front of a Costa Rican notary who registers the property under the new company or owner
7. arrange for the transfer in the Registro Nacional. If the property is acquired together with an existing company, the shares of the company will be transferred at that time through a share transfer agreement. In this case, the Notary Public shall make the corresponding changes to the ownership of the company in the National Registry.
8. payment of the purchase sum to the seller

Real estate purchase as an individual or a company?

The decision of whether the property you buy in Costa Rica should be in your own name or in the name of a company is entirely up to the buyer. It is common to register the property in the name of a corporation; this can provide better asset protection and makes the transfer of ownership easier and cheaper. A valid passport for four representatives of the corporation (president, vice-president, secretary and treasurer – all can be foreigners) is the only requirement for a foreigner to incorporate a corporation in Costa Rica; the cost is between $500 and $1000 in most cases.

What are the options for immigration?

To obtain a residence permit, these are the most common options (all variants include spouses and minor children):

• Inversionista: A documentated purchase of a property worth at least 150,000 USD.
• Rentista: You must prove, through a document issued by your bank, that you will generate a stable and permanent income of at least 2,500 USD per month for a period of at least two years. This must be notarized or apostilled by the appropriate authorities.
• Pensionado: Prove by a document issued by a competent authority that you are receiving a pension for life, the amount of which must be at least 1,000 USD. If the certificate is issued abroad, it must be properly legalized and notarized or apostilled.
• Digital Nomad: A flexible job that allows you to telecommute from Costa Rica. Demonstrated income of more than 3,000 USD per month or 4,000 USD if traveling with your family.

What about beach properties?

The Law on the Maritime-Terrestrial Zone of 1977 regulates the registration and use of beachfront properties in Costa Rica.
The government owns the land (i.e. the first 200 meters measured from the high tide line inwards) and the municipalities administer it. This strip of 200 meter consists of two zones:
the Public Zone (Zona Publica): a strip of the beach 50 meters wide between the high tide line and the outer line of the Restricted Zone. This beachfront area is open to the public. Private possession or occupation of this area is prohibited.
the Restricted Zone (Zona Restringida): a strip of the beach 150 meters wide from the limit of the inland Public Zone.
The law allows the government to grant lease contracts called concessions for the occupation and use of the Restricted Zone (150 meters) in front of the beach for terms ranging from 5 to 20 years initially with the right to renewal by the holder of the concession.
The Restricted Zone is the land that homes or businesses along the beach can use for their own benefit. Concessions can only be granted, if there is a development plan (plan regulador) for this beach. This is why we advise to only buy beach property within the Restricted Zone only on beaches with a Plan Regulador!
The process of obtaining a concession has two steps: local municipalities grant and administer the concession; then the Costa Rican Tourism Institute (ICT) authorizes the lease. Finally the concession is held in the Concession Registry of the Public Registry in San José.
An annual concession fee (called “canon”) must be paid to the municipality.

How much are property taxes?

Normally there is 0.25% tax on the land and building value registered in the Municipalidad. In addition, there is 0.25% on the house if it falls in the “luxury segment”. Owners are required to report the value of their property to the relevant municipality at least every 5 years.