Costa Rica Real Estate FAQ | Answers to Your Top Property Questions

Yes, foreigners can purchase property in Costa Rica under the same legal conditions as citizens. There are no general restrictions preventing non-residents from owning land, homes, or condominiums anywhere in the country. This openness makes Costa Rica an attractive destination for retirees, investors, and expatriates from around the world.

However, there are a few special considerations:

• Maritime Zone Regulations: The Costa Rican government strictly regulates ownership near the coast, especially within the Maritime-Terrestrial Zone, which extends roughly 200 meters inland from the high tide line. In this zone, ownership rights are limited, and usually, the government grants concessions rather than outright ownership to protect public access and the environment. If you are interested in beachfront property, it is essential to understand these rules thoroughly and work with experienced local professionals.
  
  
• Holding Structures: While many foreigners hold property directly in their name, some prefer to establish legal entities such as a Sociedad Anónima (S.A.), trusts, or other corporate vehicles. These structures can provide benefits in terms of liability protection, estate planning, and privacy. However, they also come with maintenance obligations and legal requirements. Consulting a qualified real estate attorney is crucial to determining the best ownership structure based on your goals.

Overall, the process is straightforward; however, due diligence is crucial to ensure a clear title and compliance with local regulations.

Closing a property purchase in Costa Rica requires several essential documents to protect both buyer and seller and to transfer ownership legally. Understanding these documents will help you navigate the process smoothly.

• Contrato de Compraventa (Purchase Agreement): This is the formal contract between buyer and seller, detailing the sale terms such as price, payment schedule, contingencies (for example, subject to title verification or financing approval), included fixtures or furnishings, and deadlines for closing. It establishes the buyer’s and seller’s rights and obligations during the transaction. While sometimes referred to as an “offer,” this document is legally binding once signed, so professional review is strongly advised.
  
  
• Title Search Report: Conducted by your attorney or a title expert, this document is a certified report from the Registro Nacional (National Registry) that verifies the seller’s ownership and confirms the property is free from liens, mortgages, lawsuits, or other claims. This report should also confirm that the property’s legal description matches the physical boundaries.
  
  
• Escritura Pública (Notarial Deed): The official deed executed before a Costa Rican Notary Public at closing. This deed formalizes the transfer of ownership and must be registered with the National Registry to complete the sale. The notary ensures all legal formalities are observed and that both parties understand the transaction.
  
  
• Municipal Tax Receipts: Proof that all municipal property taxes (Impuesto sobre Bienes Inmuebles) and fees are current. Outstanding taxes must be paid before or during closing.
  
  
• Identification: Valid government-issued IDs for both buyer and seller—usually passports for foreigners and cédulas for Costa Rican citizens—are required to authenticate identities.
  
  
• Proof of Payment: Bank transfer receipts or escrow confirmations demonstrating that the buyer has paid deposits and final purchase funds as agreed.

By ensuring all these documents are accurate and complete before closing, you reduce risks and avoid delays.

When budgeting for a property purchase, it’s essential to include closing costs, which typically amount to 2% to 4% of the purchase price. These costs cover taxes, legal services, and administrative fees and are separate from the actual property price. Here’s a detailed breakdown:

• Transfer Tax and Registration Fees: The transfer tax (Impuesto de Traspaso) is commonly 1.5% of the declared purchase price. This tax is paid to the Registro Nacional when the new deed is registered. Additional small administrative registration fees may also apply.
  
  
• Notary Fees: The Notary Public charges a fee for preparing and certifying the Escritura Pública (deed). This fee is usually on a sliding scale based on the property value and often amounts to less than 1% of the purchase price, though exact rates can vary locally.
  
  
• Legal Fees: Real estate attorneys typically charge 1% to 2% of the purchase price or a negotiated flat fee, depending on the complexity of the transaction and the scope of services, including due diligence, contract review, and closing coordination. If extensive title searches or negotiations are needed, additional charges may apply.
  
  
• Escrow or Fiduciary Fees: If you use an escrow service or attorney to hold funds securely during the transaction, there may be additional fees. These can be fixed or a percentage and are usually negotiable.
  
  
• Survey and Inspection Costs: Hiring a licensed surveyor to confirm property boundaries or a professional inspector to assess the condition of structures or septic systems can cost extra, depending on property size and location.
  
  
• HOA or Community Fees: For properties within gated communities or condominiums, there may be transfer fees or administrative charges imposed by homeowners associations (HOAs) or community boards.
  
  
• Municipal and Property Taxes: Property taxes in Costa Rica are relatively low but must be paid current at closing, and any arrears should be settled.
  
  
• VAT on Services: Legal, notary, and some professional services typically include Value Added Tax (IVA) at 13%, which should be included when budgeting fees.

Since costs can vary, your attorney should provide a detailed estimate early in the process to avoid surprises.

In Costa Rica, the Notary Public (Notario Público) is much more than a witness signing documents; they are a legally empowered attorney with public authority responsible for certifying the validity of critical legal acts. Their role in real estate transactions is crucial:

• Preparation of the Escritura Pública: The notary drafts the official public deed that transfers ownership from seller to buyer. This document includes all agreed-upon terms and is the formal legal instrument for property transfer.
  
  
• Verification of Legal Compliance: The notary ensures that all legal requirements for the transaction are met, including verifying the parties’ identities and ensuring that the title is clear and valid.
  
  
• Certification and Registration: After signing, the notary submits the deed to the National Registry to be officially recorded, making the buyer the registered owner.
  
  
• Legal Advice: While the notary’s primary role is certification, they also have a duty to ensure parties understand the transaction’s legal effects, providing a layer of protection.
  
  

Unlike in many countries where notaries are limited to witnessing signatures, Costa Rican notaries play an essential part in safeguarding real estate transactions.

Yes. Owning property in Costa Rica entails some ongoing costs:

• Property Taxes (Impuesto sobre Bienes Inmuebles): These are municipal taxes calculated annually at roughly 0.25% of the property’s registered value. This is relatively low compared to many countries. Property taxes are due yearly and must be current at closing. Failure to pay can result in fines or liens.
  
  
• Homeowners Association (HOA) or Community Fees: Many gated communities and condominiums charge monthly or annual fees to cover standard area maintenance, security, landscaping, and other services. These fees vary widely depending on community size, amenities, and management. Some developments may also charge a transfer or application fee when property ownership changes.
  
  
• Other Municipal Fees: Depending on the municipality, there may be fees related to garbage collection, water, or other local services.

When purchasing, it’s essential to ask for documentation showing that all taxes and fees are up to date and to understand the ongoing financial obligations for the property.

Yes, it is possible to buy property remotely in Costa Rica, but it requires careful planning and trustworthy representation.

• Power of Attorney (Poder Notarial): Many buyers grant a trusted attorney or representative a power of attorney authorizing them to act on their behalf to sign documents, attend closings, and handle registration. This allows buyers who cannot be physically present to complete the transaction legally. The power of attorney document must be drafted carefully, notarized, and sometimes apostilled, depending on the buyer’s country of residence.
  
  
• Remote Due Diligence: Buyers should ensure thorough due diligence is completed, including title verification, surveys, inspections, and contract review, before signing any agreements or authorizing transactions remotely.
  
  
• Secure Payment Methods: Using escrow accounts or fiduciary services is highly recommended when purchasing remotely to safeguard funds until all conditions are met.
  
  
• Site Visits: While remote purchases are possible, visiting the property and meeting with your legal team or agents in person when feasible is strongly recommended for peace of mind and a better understanding.

Remote purchasing can be safe and effective when supported by experienced local professionals who act transparently and protect your interests.