Buying Property in Costa Rica?
The reality is, when working with the right team of professionals, the buying process is very quick and easy.
Foreigner Friendly Laws
Many countries around the world known for their pristine beauty, like Costa Rica, have strict and stringent laws regarding property ownership. Fortunately, this is not the case when buying property in Costa Rica. Foreigners and Costa Rican nationals share practically all the same rights to purchase and maintain land and homes in the “Pura Vida” nation. The only exception to this rule is when acquiring particular beachfront or concession property that may require a local partner; otherwise, all ownership rights do not deviate based upon citizenship. There is absolutely nothing to prevent you from purchasing property in your own name, but the majority of buyers form a corporation with the help of a reputable lawyer and then purchase Costa Rican property through that corporation. The reason for this is threefold. One - it may be more beneficial to have your income (from rentals) or capital gain (from the sale of the property) taxed within a Costa Rican company rather than having it taxed as personal income. Of course, this depends on the tax laws of the country from which you originate. Two - it allows for simplified estate planning, whereby you can give or will shares of the corporation that owns the property to members of your family. Three - if you ever decide to sell your property, you can avoid paying property transfer taxes a second time by simply transferring the shares of the corporation to the new owner.
The Real Estate Registry
Another plus for those buying property in Costa Rica is its central land registry which allows your lawyer to confirm that there is clear title to your property, as well as to discern if there are any restrictions on the property before the deal goes through. Further, if you would like to have the added protection of title insurance, the services of international title insurance companies such as Stewart Title are now available in Costa Rica. Also attractive are Costa Rica's very low property taxes - 1/4 of 1% annually. That means if you buy a condominium or home with an assessed value of $200,000 the property taxes per year would be $500.
How to Choose an Agent
The actual nuts and bolts of purchasing are similar to those in North America. Dealing with a real estate company you recognize can provide additional security, since international franchises are governed by standard rules and regulations. More importantly, work with a realtor with a good reputation. One of the best ways to find someone you can trust is simply to ask around. Given that most communities in Costa Rica are relatively small, it won't take you long to come up with some names of reputable Costa Rica realtors in the area. Also, you should secure your own lawyer to represent your interests in a property purchase. Your lawyer should check the title on your property in the central registry, and can also assist with forming corporations, opening bank accounts and doing other business related to land purchase.
How to Make an Offer on Real Estate
Like us, many foreigners who come to look at Costa Rica property have already arranged their finances so that they are ready to make an offer if they find what they are looking for. But what can you do if you happen upon the perfect property while on vacation? An offer can usually be written up with a small good faith deposit to be raised to 10% within a few weeks. Final closing would normally be anywhere from 30 - 60 days. If you need to borrow funds, it is far simpler and interest rates are usually lower in your home country. However, if your credit rating is impeccable, financing in Costa Rica may be available to you.