Our RE/MAX team has many years of experience working with buyers from around the world. We've compiled this list of frequently asked questions about Costa Rica real estate to help you to understand the purchase process. Just CLICK ON THE QUESTIONS to find the answers. If you have a question that's not listed here, please contact one of our knowledgeable agents.

How do I get started in my quest to own Costa Rica real estate?
Do I need a lawyer to buy property?
As a foreigner, what are my property rights in Costa Rica?
Can I own property in my own name?
Is Title Insurance available?
How about Escrow Services?
How much are Property Taxes?
How much are Closing Costs?
How do I know if my Property is Titled?
What are Folio Real Numbers and Plano Catastrados?
Can I get financing?
Do I need to worry about squatters?
What is the Maritime Zone?
How is the Maritime Zone divided, and what part of the Maritime Zone is considered concession property?
Can foreigners lease concession property?
Can concession properties be registered in the National Registry?

How do I get started in my quest to own Costa Rica real estate?

Buying Costa Rica real estate can at first seem intimidating. However, with a little education, and the assistance of a reputable realtor and attorney, you can safely and easily purchase property in Costa Rica.

Your real estate agent should be able to help you to focus your search on property that suits your lifestyle and goals, and also educate you as to values, locations, and other investment considerations. Our experienced team of Re/Max real estate agents knows the Costa Rica market intimately. As a result, they can assist you with narrowing your search, show you the best properties in your chosen location and price range, and also help you to negotiate a fair price.

Do I need a lawyer to buy property?

You need a lawyer (Certified Public Notary) with a solid reputation to perform a study on your property in the National Registry, and also to register the property in your name, or in the name of your company or corporation. Though some buyers use the attorney of the seller to execute these duties, we strongly recommend that you have your own lawyer represent you in any transaction so that you have legal counsel looking out for your personal interests. In addition to making certain that you will have legal title to your property, your lawyer can also assist you with the financial aspects of the purchase.

As a foreigner, what are my property rights in Costa Rica?

Unlike some other countries, foreigners do not need to purchase property with a partner or through a trust. Costa Rica's laws and constitution, founded on over a century of democratic principles, are also extended to foreigners. There are almost no restrictions placed on the ownership of land in Costa Rica (with the exception of some kinds of beachfront property - please see the Maritime and Concession Real Estate section). Costa Rica welcomes foreign investment, and its property laws reflect this.

Can I own property in my own name?

Yes, you can own Costa Rica real estate in your own name, or in the name of your corporation or company (S.A. or L.L.C.). Setting up a S.A. or L.L.C is not difficult, and can be arranged with the assistance of your lawyer for a reasonable fee. Purchasing via and S.A. or L. L. C. is more popular with Costa Rica property buyers than purchasing in their own names for three reasons:

(1)First, depending on the tax laws of your home country, it may be preferable to have rental income and capital gains (there is no capital gains tax in Costa Rica) recognized in a corporation or company rather than in your personal name. Further, there may be flow through benefits from an L.L.C.

(2)Second, it can make estate planning less complicated, since you can transfer or will shares of your corporation or company to your family.

(3) Third, it can cut costs when selling your property, since you can transfer the shares of the S.A. or L.L.C. to the new buyer, which eliminates certain government fees during the transaction.

Is Title Insurance available?

There are several international Title Insurance companies in Costa Rica, including Stewart Title.

How about Escrow Services?

Escrow services are common and recommended in Costa Rica. Most often, escrow is with a title company like Stewart Title, an established bank, or your lawyer.

How much are Property Taxes?

Costa Rican property taxes are very low, only .25% of the registered property value. That means that annual property taxes on a purchase of $200,000 would be only $500.

How much are Closing Costs?

Closing costs to transfer title of the property from the seller to the buyer total approximately 3.5% of the registered value. About 2.25% goes to the government in the form of Real Estate Transfer Taxes and Documentary Stamps, and about 1.25 % to your lawyer for their services. When purchasing directly from a developer, the buyer usually carries the closing costs. However, when purchasing from a private seller, a split of closing costs may be negotiated. If the purchase is by means of a transfer of shares rather than title, the closing costs would be less than 3.5%.

How do I know if my property it titled?

Property in Costa Rica should be registered in the Registro Nacional, or National Registry. Both fee simple and concession properties can be registered. The National Registry shows property ownership, and if there are any mortgages, liens, or judgments against the property. Your lawyer should perform a search of the National Registry as part of his/her duties during the purchase process. Your purchase contract should stipulate that, if any problems with the title are discovered during this due diligence period, the contract would become null and void, or you may wish to renegotiate the contract or extend it if the problem can be legally remedied.

The fact that a property is unregistered does not mean that it does not qualify to be registered. However, we strongly advise against the purchase of unregistered real estate.

What are Folio Real Numbers and Plano Catastrados?

Each property registered in the National Registry is assigned a unique number, which is called the Folio Real. This number is used for identification, and is made up of three parts. The first group of numbers signifies the province where the property is located, the second group of six numbers is the actual property number, and the last group of numbers indicates how many individuals own the property. Properties require a Folio Real number to obtain clear title.

Also accompanying each registered property is a Plano Catastrado, or survey plan that shows measurements, size and location, as well as other details, such as whether or not the land is situated in an area with restrictions (ie near a National Park or in Private Development). The Plano Catastrado must be recorded in the National Registry in order for a property to be transferred, mortgaged, or purchased.

Can I get financing?

Technically, Costa Rican institutions offer financing to foreigners. To date, however, the process has proved arduous and on the whole unsuccessful. If you need to borrow funds, it is usually much simpler to do so in your home country, and interest rates are generally much lower. That being said, more international institutions, such as Bank of Nova Scotia and H.S.B.C., are commencing operations in Costa Rica and are working on financing packages for foreigner. Please ask your Re/Max agent for more details about financing at the time of your purchase. You can also inquire about developer and seller financing, which may be available on certain properties.

Do I need to worry about squatters?

The Costa Rican government has established certain laws to protect citizens who have resided on and maintained a property for many years. These laws are commonly referred to as "squatters rights." Problems with squatters are extremely rare in developed areas, since you and your neighbors would quickly become aware of any unauthorized persons dwelling on your property. If you decide to purchase land in a remote region, it is recommended that you have a responsible individual, such as a caretaker, verify periodically that nobody unauthorized is residing on it.

What is the Maritime Zone?

The Maritime Zone is defined as the first 200 meters measured horizontally from the high tide mark, and includes any natural formation that overcomes the ocean, such as islands, mangroves and estuaries. The Maritime Zone is divided into two different sections:

(1) The Public Area; and the (2) Restricted Area.

How is the Maritime Zone divided, and what part of the Maritime Zone is considered concession property?

The first 50 meters is called the Public Area. As its name suggests, this area is for public use, so property within Public Area is cannot be privately owned. No form of construction or development is permitted within the Public Area, with the rare exception of specialized, government-approved projects such as marinas. The result of this zoning is that, in Costa Rica, all people enjoy access to the beaches.

In about 5% of coastal areas (for instance, much of Brasilito, Potrero, Tamarindo and their surrounding beaches), fee simple title begins after the Public Zone, that is, 50 meters from the high tide mark. The definition of fee simple property is similar to that in North America and Europe: the owner has the right to use the property, improve it and sell it. The conditions for ownership of fee simple property are the same for both foreigners and Costa Ricans.

The next 150 meters after the Public area is called the Restricted Area. In 95% of the country, the properties that fall into this 150 meters are available for concession only. A concession is essentially a lease that is granted from the government to the buyer or "lessee" for a specified period of time. The lessee is allowed to build, improve and even subdivide concession property. As with all property in Costa Rica, permits to do so must be obtained from the municipal government in accordance with Costa Rican law.

Can foreigners lease concession property?

When it comes to concession property, foreigners and Costa Ricans are subject to different rules. Foreigners who have lived in the country in excess of five years may be allowed majority ownership of concession property, while foreigners who have lived in the country for lesser periods are generally only permitted minority ownership.

Can concession properties be registered in the National Registry?

Yes. Concession property, like fee simple property, should be registered in the National Registry. Once again, avoidance of properties that are not registered is strongly advised. Your lawyer can determine whether your beachfront property is fee simple or concession, and whether or not it has been duly registered in the National Registry. For more detailed information about Maritime and Concession property ownership, please consult your lawyer.

Have more questions that we haven't answered here? Please contact one of our professional RE/MAX agents - we're happy to work with you throughout the entire purchase process!