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How To Buy Property In Costa Rica

The good news is that US citizens can buy most property in Costa Rica without restriction. The main exceptions are in certain areas known as Maritime Zones, which are directly onto beachfront areas, and considered public land.

how to buy property in costa rica

Buying property in Costa Rica is a fairly transparent process. However, as with business transactions anywhere in the world, it is important to do your due diligence and work with professionals. The information below can help you to understand the purchase process, and our team of dedicated and knowledgeable RE/MAX Costa Rica agents is also available to answer your questions and streamline the experience should you decide to go ahead with buying real estate in Costa Rica. Please feel free to contact us for information without obligation.

Unlike some of the other countries, foreigners have the same rights when purchasing land in Costa Rica as locals do. You can own property outright in your own name or in the name of your corporation. You do not need a local partner, except in cases of beachfront concession property, where special rules apply. 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 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 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 - to not have personal liability for any debt than can occur and shield its owners from personal liability for accidents or bodily injury on the property.

Another plus for property purchasers 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. 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.

The actual nuts and bolts of purchasing are similar to those in North America. Dealing with a Costa Rica real estate company you recognize can provide additional security, since international franchises are governed by standard rules and regulations. Also, find out if your Costa Rica real estate agent lives in the community where he or she is working. Do they know the local market? Are they owners themselves? These are important questions as there are some large databases operating in the country run by individuals that don't even live in the country. Ask yourself if you want to be represented or advised by someone who is largely ignorant of your target market, and who cannot advise you of pricing, deals, lifestyle and issues peculiar to that location.

Also of importance in the process is to 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.

Many foreigners who travel here come specifically with the intent of buying property in Costa Rica. Others travel to Costa Rica on vacation and decide on the spur of the moment to make a financial or lifestyle investment. Whatever your situation, dealing with professionals can simplify the purchase process.

Once buyer and seller have come to an agreement and have signed the contract, a deposit (usually 10%) is expected. The normal time period for receipt of deposit is two weeks, but this time period may be negotiated according to the buyer's circumstances. All funds should be held in a SUGEF or government registered escrow account. It is common for buyers and sellers to use third party companies such as Stewart Title Latin America (STLA) for escrow purposes.

The laid-back lifestyle and gorgeous tropical weather of Costa Rica attracts tourists and expats like a magnet. Real estate in Costa Rica is much more affordable than in most parts of North America and getting to live in paradise makes the deal even sweeter.

On the whole, rental yields for residential rental properties are fairly healthy in Costa Rica, shifting from 5.6% up to 8.6% depending on the province. An investment property in Costa Rica can also be an excellent opportunity for rental income.

The great part about Costa Rica is that foreigners and locals have the same ownership rights when buying property in Costa Rica. As far as Costa Rican law is concerned, someone from a foreign country can purchase property on a tourist visa without the need for residency or citizenship.

In Costa Rica, any property located within the first 50 meters of the high tide line is considered public land. This means it is protected and cannot be titled. The next 150 meters up from this zone is called the Maritime Zone or Concession Land.

First, you can begin your property search on your own or with the help of a real estate agent. Buying a house in Costa Rica often involves a bit more footwork than the usual internet scrolling most of us are used to.

As we mentioned before, the country has no MLS so shopping for property is a little different. Many towns have real estate offices where you can browse listings in the area or look for the right real estate agent to consult with.

There are some resources to browse the property market online, but not all properties for sale will be listed. Costa Rica real estate prices can be harder to compare because of this. Most of us are used to being able to see all property types in all areas at the click of a button. In Costa Rica, real estate transactions are far less public.

Taking advantage of the amazing weather and open foreign buying laws creates a great opportunity for investment or a new life in paradise. We hope this information helps you find your dream property!

Súper helpful article! Thank you! We are interested in a home on an acre of property, some of which is in the maritime zone. We are in the process of narrowing down a vetted agent and attorney but my question at the moment is can a non-citizen purchase a home without a title due to the maritime zoning? Is a citizen partnership required to make any home purchase on maritime zone land or is the partnership specific to gaining maximum land ownership of beachfront property? Thank you for any insight you can share on this topic.

One important tip on real estate agents: As a profession, real estate agents are not as regulated as in other places, like North America and Europe. They can be licensed, but it is not legally required. So you will find some real estate agents that have little to no experience or training. This makes it extremely important to talk to some locals in the area you want to live to see who they have used and if they had a good experience.

Just like in real estate transactions elsewhere in the world, the first step when buying a house in Costa Rica is to make a formal offer (also called a letter of intent). This is just a basic letter that gives your intent to purchase the property from the seller.

Q. How much are property taxes in Costa Rica? A. Property taxes (municipal tax) throughout Costa Rica are very low when compared to the North American countries or Europe. The municipal tax is applied at the municipal level and varies throughout the country. Paid quarterly, the property type, location and other factors contribute to the calculation of this tax.

Q. Do foreign buyers have to pay capital gains tax in two countries - their native country and Costa Rica? A. A nice incentive for foreign investors is that Costa Rica has no capital gains tax. The Costa Rican government will not tax property owners on their profit from the sale of their property as long as this is not undertaken as a means of business. However, foreign buyers would be obligated to pay taxes on any declared earnings being brought back to their country of citizenship.

Q. Who pays the sales commission? A. Typically, the seller or owner pays the commission to the realtor or broker at closing. The buyer does not have to pay any commission when buying property in Costa Rica, unless he specifically agrees to do so as part of the transaction.

Q. How can a foreign buyer ensure that he has clear title to the property? A. To ensure clear title, it's important that the necessary steps are taken to properly register the property, and more importantly, be assured that the property in question is free of all liens.

The Registro de la Propiedad (Property Registry) is located in San Jose - Zapote, where all property documents are recorded. A title search at the Registry would confirm good title and proper ownership. In the event that adjustments were made to any given title, these alterations must have been recorded at the Registry.

The Public Registry report (informe registral) provides detailed information on the property, including the name of the title holder, boundary lines, tax appraisal, liens, mortgages, recorded easements, and other recorded instruments that would affect title. Title insurance further ensures that a real estate purchase can be fully secured.

Q. Are there regulations regarding beachfront properties? A. When buying property located on Costa Rica's beaches, buyers should be aware of the following: building a home adjoining beach areas falls under a category known as the Maritime Zone Law, the first 200 meters of land measured from the high tide line. 041b061a72


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