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Buying Real Estate in Costa Rica -

Guide for Purchasing Costa Rica Property

Can I Buy Costa Rica Real Estate if I'm a Foreigner?


One of the reasons we personally chose to buy Costa Rica real estate is that foreigners have the same rights when buying property as locals do. Due to the fee simple title, you are able to own property in your own name or in the name of your own company. You do not require a local partner, with some very rare exceptions such as beachfront concession or marina properties. Although there are no laws that prevent you from purchasing property in your own name, most foreign and local buyers buy property via a Costa Rican company – typically a Sociedad Anonima (S.A.) or Limitada (Ltda).

Forming a company is a simple process that generally costs US$1000 or less and is achieved with the assistance of your lawyer.  The potential benefits of owning your property in a company are that it may be more efficient to have your income from rentals or capital gains from the sale of the property taxed within a Costa Rican company.  Of course, this depends on your personal circumstances including the tax laws from your country of origin.  Another potential benefit of making your investment in Costa Rica via a company is that it facilitates estate planning since you can give or will shares of the corporation that owns the property to members of your family. 


Finally, if you ever decide to sell your property, government fees are slightly lower (about 1.6%) in the case of a share transfer than they would be for a property transfer (2.4%).  Share transfers are more common in lot or land sales where there would be less chance of liabilities in the company.

Does Costa Rica have an MLS?


Choosing your agent is an important step in your due diligence since there is no official MLS operating in the country and there is no national body that regulates the industry. That being said, there are several recognized national and international associations available to professional agents such as NAR (National Association of Realtors), CIPS (Certified International Property Specialist), CRGAR (Costa Rica Guanacaste Association of Real Estate) and CCBR (Costa Rica Real Estate Association).   All of these associations have basic professional requirements and education that will be useful to you as a Buyer or Seller.  Don’t be afraid to ask an agent if he belongs to one or more of these national or international associations.

As there is no Costa Rica MLS, it's vital that your agent be willing to show you listings of other agencies and developers in addition to his/her own.  Your agent should investigate any listings you find online and arrange tours on your behalf.  

Another important consideration is whether or not your agent is an expert in your target area. Does your agent actually live in the community where you want to invest?  How well does your agent know the local market? Is your agent an owner of Costa Rica real estate who has personally experienced the buying process ? 

Choosing an agent who works with a recognized company like RE/MAX and has experience selling Costa Rica property can also provide you with peace of mind, since franchises are governed by international rules and regulations and often provide training to agents in unregulated markets. Franchise owners in particular are subject to review and undergo an intensive education process.

Will my Costa Rica Property Purchase be Registered?  Titled?


Another reason we chose to buy Costa Rica property was that it has a central, computerized land registry - known locally as the Registro - where property titles are recorded.  Every titled and legal concession property (a property leased from the government for a fixed period of time) has a number associated with it called its Folio.  Using the Folio, your lawyer can search the Registro to check the title chain of the property and learn any important details such as restrictions on use or existence of liens.

Frequently the Buyer’s lawyer would also be responsible for doing the notarial work and recording the new owner in the Registro. Since your lawyer will be performing the title work in the transaction, a key step in your due diligence is finding a reputable lawyer who will look out for your interests.  Ask your agent and other property owners who they would recommend.

How Much are Closing Costs?


Investors always ask about the closing costs involved in buying Costa Rica real estate.  These are estimates and should be confirmed by your lawyer once the method of transfer (property versus share) and value of the transaction are established.

The closing costs usually total close to 4% of either the sales price or the registered price (whichever is higher) and vary slightly depending on whether you're purchasing via a property transfer or a share transfer. There are 2.4% government stamps and fees on a property transfer versus 1.6% on a share transfer - which happens when you assume the Seller's company. Closing costs also include notarial fees of 1.25% and escrow fees of approximately .35% depending on the transaction and escrow company. 


If you buy Costa Rica real estate directly from a developer, you may be expected to  pay all the closing costs.  In the case of a resale, closing costs may be split 50/50%. However, since the Buyer’s lawyer often performs all the notarial work in a transaction, closing costs may be shared as follows:

  • Buyer and Seller share equally the 2.4% property transfer or 1.6% share transfer fees

  • Buyer pays the 1.25% notarial fees since this work is done primarily on his/her behalf

  • Buyer and Seller share equally the escrow fees

  • Seller pays for his own legal representation


Can I Get Financing from a Costa Rican Bank?


Costa Rica primarily has a cash real estate market. Although some banks advertise loans for foreigners, we have only had two clients in twenty years successfully acquire a loan from a Costa Rican bank and these clients already owned property in the country.  If you are a foreigner looking to buy property in Costa Rica and you need or want financing, your best option is to find a Seller who is willing to provide owner financing. There are several legal structures in place that make owner financing safe for both Buyer and Seller.


What is Involved in Making an Offer?


Once you have decided on buying Costa Rica real estate, the first step is having your agent write an offer. The offer will be presented by your agent to the Seller or his agent, whether the Seller is a developer or private owner. The Seller will either accept the offer or will counter.  Negotiations will continue until the price and terms are agreed upon by both parties.

When the Buyer and Seller have come to an agreement and have both signed the Costa Rica real estate agreement, an initial deposit (usually 10%) is expected, normally within two weeks. This deposit and all ensuing funds should be held in a third party SUGEF/government registered escrow account on behalf of both parties. The escrow agent should be specified in the contract, along with a due diligence period that allows your lawyer to confirm title and fulfill any other requirements you have for making the purchase. Final closing on your property would normally take place anywhere from 30 - 60 days, though this can be accomplished sooner if you wish.

How Much are Costa Rica Property Taxes

The base rate for Costa Rica property taxes is .25% of the registered value.  If you own what is considered to be a luxury property, taxes will be between .4 and .5%.  Luxury property status is determined by an engineer's evaluation using government regulations.  Primary criteria of luxury property status include size, ceiling height and quality of finishes. 

Can I Rent my Property?

Many buyers of Costa Rica real estate intend to rent their properties at least some of the time.  Most projects have no rental restrictions and you are free to rent your property as much or as little as you please.  Since renting is so common, there are very reputable property management companies who will care for making reservations, cleaning and check-ins.  We would be happy to introduce you to the best property managers in your area.

Chris Simmons, Canadian CPA, Certified International Property Specialist, Co-Owner 3 ReMax Offices


Costa Rica real estate agent Chris Simmons, a Canadian CPA and Certified International Property Specialist (CIPS), wrote the above to answer common questions about buying property in Costa Rica.   Not only is Chris and investor himself, he has bought and sold Costa Rica real estate for 20 years. He specializes in Tamarindo Real Estate , Flamingo Real Estate and nearby properties on Guanacaste’s North Pacific Gold Coast such as Reserva Conchal, Hacienda Pinilla, and Langosta. Chris, is the co-owner of 3 Re/Max offices and belongs to the National Association of Realtors (NAR) and Costa Rica Guanacaste Real Estate Assocation (CRGAR).  Chris is happy to answer your questions and assist you with a purchase should you decide to go ahead with an investment.  Please feel free to contact him for more information.


Chris Simmons, C.A. Owner 3 Costa Rica Re/Max Offices

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