Costa Rica Property Search


Frequently Asked Questions (FAQ's)

1.  Is it safe to buy Real Estate in Costa Rica as a foreign citizen?

Yes.  The constitution guarantees the same rights of property ownership of titled property to everyone, regardless of nationality.  This encompasses all property that is titled with the exception of beachfront property.  See FAQ #5.

2.  Can you purchase Title Insurance for Property in Costa Rica?

Yes.  Many international Title Insurance companies offer Title insurance in Costa Rica.  In addition, many of the title companies provide escrow and closing services.  Keep in mind that you should read your title policy carefully before you accept it.  The Title Insurance industry in Costa Rica is in its infancy that has not been subject to many years of scrutiny as is the case in the United States or Europe.

3.  Is financing available to foreign citizens to purchase property in Costa Rica?

The quick answer is yes, the long answer is more complicated.

Financing is available to foreign citizens through most of the financial institutions in Costa Rica.  As a foreigner, the requirements and financial information required as well as the time needed to secure financing is much more complicated than what you are probably used to in your home country. 

Over the last few years the public and private banks have become more sophisticated in trying to fill the demand for foreigner financing to the extent that private mortgage brokers have sprung up as well as the Title companies joining in to provide loans to foreigners and nationals alike. 

The key things to look out for are:  Be aware that there can be numerous up front bank, attorney and mortgage brokerage fees that can add up to a heavy up front load.  Try to opt for a simple mortgage attached to the property rather than a relatively more risky guaranteed trust arrangement preferred by most private financing companies.

Also, as of late, Sellers are willing to offer financing and that is on a case-by-case basis.  Ask your Realtor if the property you are interested in is offering financing.  Do not be afraid to make an offer with Owner financing - you might be surprised with the result.

4.  Are Realtors licensed and insured in Costa Rica as they are in the United States and other countries?

Contrary to popular belief, there is no officially recognized licensing body for Realtors and Real Estate Brokers in Costa Rica.  There are two organizations that have responded to the lack of licensing and formal training requirements and have made good progress towards educating the industry.  Both the Costa Rican Chamber of Realtors (CCCBR) and the Costa Rica Global Association of Realtors (CRGAR) have extensive memberships and sophisticated training programs. CRGAR is affiliated with the National Association of Realtors (NAR) in the United States even though CRGAR does not require its members to be legal to work in Costa Rica.  Interestingly, only the CCCBR requires their members to be able to legally work in Costa Rica.  Most reputable agencies require their agents to be legal to work in Costa Rica.

The bottom line is, in order to protect your interests in Costa Rica, you should deal with a well informed, well respected Realtor at all times.  Don’t be afraid to ask for references, credentials, or proof your Realtor is legal to work in Costa Rica.

5.  Can I earn rental income on my Costa Rican Property?

Most foreigners who own property in Costa Rica do not live here year round and attempt to rent their property to vacationers or on a long term basis.  If you work with a reputable rental and property management company as well as invest in a marketing effort to promote the rental of your property, you can expect to enjoy a decent level of rental income.  Much of the rental income success is a function of the attractiveness and appeal of your property as it relates to your rental market and the extent to which you successfully market the property.

6.  Can a foreigner own beachfront property in Costa Rica?

The short answer is yes.  The long answer is more complicated.

The Costa Rican government established the Maritime Zone Law in the early 1970’s.  The first sentence of the law shows the clear intent.  ‘This law is designed to protect the patrimony of Costa Rica – our Coastline’ (rough translation from Spanish).  Many experts have interpreted the law as an attempt to control the zoning of the coastline that Costa Ricans have quite intelligently understood to be their best asset.  Looking at the law in detail shows that indeed the usage Is controlled as is the form of ownership.

The brief summary of the Maritime law as it pertains to property use and ownership is as follows:  The Maraitime Zone is designated as the first 200 meters inland from the mean high tide as determined by the Costa Rican Geographic Institute.  The first 50 meters from the mean high tide is public and can contain no permanent buildings.  These first 50 meters are for the free enjoyment by the public to the extent that if the only physical access to the beach other than by sea is through private property or otherwise, transit to the beach must be allowed.  The Costa Rican Geographic Institute places physical markers (mojones) at the 50 meter line.

The land area between 50 meters and 200 meters from the mean high tide is held in the following ways:  An overwhelming majority of the property is controlled by the respective municipalities who in turn grant concessions for the use of the land.  Most concessions have 20 year terms and can be eternally renewed as long as you follow the rules of the concession and can be transferred or sold with the approval of the municipality and the Costa Rican Tourist Institute (ICT).  These Concession properties function much like long term renewable leases and have specific usage restrictions based on what type of concession has been granted.  Concessions can in theory have sub concessions (i.e., to sell individual condos on a single concession property).  Technically concession properties must have at least 51% Costa Rican ownership.  Costa Rican Attorney’s have devised ways in which foreigners can own concession outright.  There are many schools of thought on this issue and due diligence should be very detailed if you are considering acquiring a concession property.

There is a small minority of land area between the 50 meter and 200 meter mark that is titled.  These properties were titled prior to the enactment of the Maritime Zone law.  These properties enjoy the status of being titled but are still subject to the zoning laws of the Maritime Zone of their particular municipality or beach area.

7.  How much are Property Taxes in Costa Rica?

Currently property taxes in most municipalities are .25% of your property's assessed value per year.  If your property has an assessed value of $100,000 then your tax for the year would be $250.  Rarely does the assessed value of your property exceed the real value and in most cases the assessed value is much lower.  Each property owner is responsible for paying their taxes at their respective municipal office.  Most pay at the beginning of the year for the whole year in advance.  Concession property is taxed at a different rate (usually higher) varying by municipality.

8.  What are the tax laws regarding buying and selling property in Costa Rica.

There is a property transfer tax of 1.5% of the transaction value.  Currently there is no capital gains tax on property sales in Costa Rica unless it is considered a business activity.  Many property purchases change ownership through the sale of the shares of the corporation that owns the property, thereby avoiding the payment of the property transfer tax.  Many Attorneys do not recommend this since in effect you are taking on most likely a very low cost basis for your property.  In the event that a property gains tax is enacted, then when you sell you will have the additional gain due to your low cost basis.  It is a good policy to record the sale at the sales value and pay the property transfer tax.

9.  How much are closing costs?

Normally closing costs are a percentage of the selling price and are paid by the Buyer.  In some cases they can be shared between Buyer and Seller.  Notary fees (legal fees)  are usually between 1.25% and 1.5% of the purchase price, legal stamps 1% and transfer tax if applicable 1.5%.  Your Realtor can assist you in making the best deal for you when negotiating your purchase.  This is one more reason why having a good Realtor is so important and we at RE/MAX have the best agents in Costa Rica.

10.  What is the closing process?

Once you have decided on the property and the price has been established, legal due diligence has been completed and your legal counsel has given the green light, you and the Seller are ready to sign all the documents and transfer the funds to close the sale.  The main document you and the Seller will sign is the “Deed of Transfer”.  This is a very formal document printed in the Notary’s Protocol or legal book.  In this Deed the Notary will indicate all property information, Seller and Purchaser, type of transaction and the cost.  This document will be signed in Spanish.  The lawyer will translate it to you under oath ensuring everything read to you will be an accurate translation of the Deed.  The original document signed by all parties will remain in the Notary’s Protocol and a certified copy will be sent the National Registry to be recorded.  You will receive a copy of this document but never the original.

Once this is completed, usually at the Lawyers office, funds will be disbursed as agreed upon to all parties.  The transaction is considered to be closed and the property will be yours.  Your Lawyer will present the Deed to the National Registry for them to register you as the new property owner.   The Lawyer (Notary Public) is responsible for presenting the Deed in a timely fashion. You should check with your Lawyer for verification the transfer Deed has been presented as soon as possible following the signing.  Registration may take several months.  Once this is completed your Lawyer will present you with the certification of new ownership.

11.  How much are real estate commissions?     

Commissions for normal residential lots, condos, houses are usually 6% of the purchase price.  This 6% will be split between the Buying Agent and Selling Agent.   Costa Rica law mandates the payment of a 13% service tax on the commission paid.  This is paid by the Seller normally.     

12.  Corporations - What are the reasons people own property inside corporations?

Owning property or vehicles in a corporation is quite common in Costa Rica.  The corporation provides a certain amount of privacy for the owner and in case of any legal disputes in Costa Rica or elsewhere the property held by the corporation will be a separate entity and not subject to the litigation.  In addition, if the only asset of the corporation is the property and if you wish to sell the property, then you can transfer the ownership of the corporation very simply.  This transfer will avoid the 1.5% transfer tax as well.   This is all very legal but you must ensure you are using a good legal team - both lawyer and realtor.  They will help to ensure the process is completed properly and within Costa Rican laws.

 13.  Why should I buy a lot and build vs. Purchase an Existing home?

Very good question but one you will have to answer as there are pros and cons to both.  Buying a lot and building should be the cheaper of the two plus you can build the house you want with the finishes and touches you desire. However it will take time to build the house (up to 12 months) and it is imperative you find a good builder that you can trust and will deliver on budget and on time.  Again this is where a good real estate agent can really help you in finding a good builder.  They know the area and the builders that work in this area. 

Purchasing an existing home is certainly simpler and gives you the opportunity to enjoy your purchase immediately.    Normally you will pay a premium for a completed home but this premium may more than offset the stress that may come with building a home in a foreign country when you may be back in the US, Canada or elsewhere.  Building a home in your own country can be stressful and this stress can multiply when building in another country.  We at RE/MAX will be here to help you and point you in the right direction in finding a good builder.  Either way we will be here to help you out and make your purchase as painless as possible.

 14.  Why should I buy property in Costa Rica?

Costa Rica is a unique country – it is both beautiful and truly enjoyable to live in.  It is often called the “Switzerland of the Americas” due to its neutral political status and spectacular mountains that remind one of Switzerland.   Property ownership for foreigners is not a problem as there are no complicated partnerships like Mexico or the Caribbean Islands.  Foreign property owners have the same rights as native Costa Ricans. Property rights are protected by the Constitution and equally applied to all – Foreign or National.   Costa Rica has an excellent land registry system accessible by internet from anywhere in the world.

 15.  Is the government and economy stable in Costa Rica?

Costa Rica has a very stable government with no conflicts in recent times. The best kept secret of Central America is that Costa Rica is one of the oldest democracies in the Americas. Costa Rica has no military as it was abolished in 1948.  There are more teachers than policemen in Costa Rica.  The money spent by governments normally on the military is spent on education and health care.  Costa Rican literacy rate of 95% is the second highest per capita in the world.  Costa Rica has a very good public health care system and very good private health care system.  Why wait months or years for quality health care when you can have similar care to North American standards at 50-70%?

The Costa Rican economy is stable and very diversified with tourism one of the leading industries.  The Costa Rica climate offers a plethora of agricultural businesses from all types of fruit and vegetables farms to the growing and exporting of commercial flowers and plants.   The central valley has attracted a number of high tech industries such as Intel and Proctor & Gamble plus many other industries which make use of the educated workers in this area. 



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