Purchasing real estate in Costa Rica is fairly simple and since the laws do not require residency for foreign investors, personal and property taxes are extremely low, and no capital gain tax, buying property in Costa Rica is a smart investment in your future. With our team of professionals, we take the guesswork out of the Real Estate process.
Let’s talk about the different types of property ownership.
Fee Simple ownership is the same for Costa Rican nationals as for foreigners and the concept is the same in Costa Rica as it is in the US, Canada and Europe. Fee simple ownership gives the owner the material right to own the property, use it, sell it, lease it and improve it.
Beach front property. The Maritime Zone Law regulates the land within the 200 meter zone of the ocean, which belongs to the government, with some exceptions where title was registered under Law No. 4558 that granted title within the 200 meter zone up to the 50 meter point. The first 50 meters from the high tide mark are considered public areas with very restrictive uses. The next 150 meters are subject to either titled, concession or leasehold rights granted by the local government with terms and conditions.
Concession property is defined as the right to use and enjoy a specific parcel of beachfront land for a pre-determined period of time (usually 5 to 20 years) and a pre-determined use of that land through zoning or master plan known as a Plan Regulador.
The Government grants this concession right by a private agreement between the buyer and the local municipality that is then recorded in the National Public Registry with an established yearly concession fee that is based on the appraisal performed by the government. 95% of beachfront property in Costa Rica is concession property which leaves only 5% of beachfront titled land.
Condominiums, typically known as apartment buildings or town homes, is a specific law in Costa Rica called Condominium Property Law. This type of ownership provides for the development of different types of properties, single family home projects, lot projects, vertical and horizontal condo projects. This allows a developer to regulate the conditions with its own by- laws to owners in the development. This type of ownership is fee simple but has additional restrictions set by the developer to maintain the integrity of the project, such as architectural guidelines or land use restrictions.
So, you have found your piece of paradise, what’s next? First and most important, retain the services of an attorney to perform the title search in the Public Registry and discuss acquiring the property personally or through a legal entity of a Corporation. In order to perform the title search, the attorney requires the property number called the Folio Real or Plano Catastro number and/or the name of the owner.
The Public Registry maintains an accurate database of registered properties and the title search will verify the identity of the owner, property size, and location and whether the title is free and clear of any encumbrances, such as liens, mortgages or pending legal actions. This is also the time to verify through the local municipality that the property taxes are up to date.
Property is acquired by a public deed or escritura publica that is issued by the attorney and Notary Public who is responsible in handling the closing on the property and registering the sale in the Public Registry which you want to follow up and make sure this is completed within 60 days.
Closing costs are approximately 4-5% of the total purchase price and include attorney/notary fees, property transfer fees and legal stamps. If you as the buyer would like additional assurances of the property you’re buying, you can retain the services of a Title Guaranty Company and purchase a title guarantee, which is now available in Costa Rica.
Purchasing Real Estate in Costa Rica can be a rewarding experience. With our team of professionals we will assist from start to finish in owning your own piece of paradise today.
Chamber of Realtors