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If you can’t afford to buy a house in the South of France or Spain, prices of decent homes in Costa Rica begin at around $50,000 with financing available for new homes if you become a resident.
You do not have to be a resident of Costa Rica to own property and you are entitled to the same ownership rights as citizens of Costa Rica.
Ownership of real estate in Costa Rica is fully guaranteed by the constitution to all foreigners. This means your purchase here can be fully secured and safe. The value of beach property has skyrocketed over the last decade due to the country’s increased popularity. Many people want to realize their dream of owning a beachfront lot in a tropical paradise. For most foreigners the main beach development areas that are worth considering for retirement and/or vacation homes can be found in Guanacaste areas such as Coco, Flamingo, Junquillal, and Tamarindo. The Central Pacific beach areas around the towns of Jacó Beach, Quepos and Manuel Antonio are also attractive. Unlike Mexico, some beachfront property may be purchased. However, the 200-meter strip of land along the seacoasts is owned by the government and for public use. It is prohibited to build anything within the first 50 meters of the high tide line. This zone is for the public and cannot be turned into a private beach. Also, you can no longer build within the next 50 to 200 meters of the high tide line—this is called The Maritime Zone, or Zona Marítima, — unless there is existing housing or a new tourism project involved. If this is the case, you can lease the land from the municipality, which is overseen by the Costa Rican Tourism Institute. In theory foreigners cannot lease this land, but there are loopholes in this law. One of the ways to circumvent this regulation is by obtaining a lease through a corporation that is owned mainly by a Costa Rican. Check with a lawyer to find out how this works. For your information, beach front property is being bought-up fast, and the price of this and other prime real estate is soaring. Due to Costa Rica’s increasing popularity and improving infrastructure, beach property can be an excellent investment. Besides homes and beach property there are also condominiums, farms, lots and ranches for sale at reasonable prices, depending on their location. You will be pleased to know that no capital gains taxes on real estate exist in Costa Rica, so it is an excellent investment. You do have to pay yearly taxes, but they are low by U.S. or European standards. Purchasing property in Costa Rica is very different than making a similar purchase in your home country. The laws of Costa Rica and property registration process can be somewhat confusing to a foreigner. Your best bet is to work with a broker or real estate consultant when looking for property. When you find a property your broker can help you negotiate the price and explain your financing options. If you decide to buy real estate, an attorney is absolutely necessary to do the legal work. We strongly recommend that your lawyer do a thorough search of all records before you make your purchase and make sure there are no encumbrances (gravámenes) on it. One of the biggest errors made by foreigners buying real estate is not properly researching the title for liens. You can obtain information about property at the Registro de Propiedades (like our land title office) in the suburb of Zapote, about five minutes from downtown San José by car or taxi. You can also find the status and ownership of a piece of property and get any title documents and surveys you may need at this office. If the property is registered in the name of a corporation, the legal representatives must be verified, since they have power of attorney to make the saleIf the property appears free and clear of encumbrances, the lawyer can then proceed। Your lawyer should then draft a transfer deed or escritura to move the ownership from seller to buyer. In Costa Rica the buyer and the seller usually share the closing costs which normally run about 4-5% of the total purchase. A small real estate transfer tax or 1.5% of the actual value is included, a registration fee, stamps, notary fees, which vary and depend on the price of the sale. Title insurance is optional but advisable. It is common practice with many lawyers in Costa Rica to lower the actual amount paid on a sale to a much lower sum on paper to reduce land transfer tax. Buying and registering a property in a corporation has many advantages, mainly, asset protection in the event of a divorce or a lawsuit. When a corporation owns the property, the sale or purchase of the company can be negotiated so you don’t have to pay property taxes or stamp fees. All you have to do is change the Board of Directors, the legal representatives of the corporation and transfer the shares. Do not hire the same lawyer used by the seller of the property. Also, don not forget to check that you are buying the land from its rightful owner. Don’t forget to see if you need special permits to build. Be sure to check the comparative land values in your area to see if you are getting a good deal. If you are thinking of living in a remote area, check to be sure that roads, electricity and telephone service are available. Make sure to buy where it’s easy to rent or sell your home or condominium in case you change your plans or in the event of a personal emergency.
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