All you ever wanted to know about Costa Rica real estateMay 21, 2018
Answer your questions about Costa Rica real estate with this short guide to buying a home or property in Costa Rica.
A lot of us dream of owning a vacation home in some exotic location where the sun shines brighter, the people are friendly, and the weather is always warm. Or moving to a place like that fulltime.
Living in a tropical paradise like Costa Rica is a dream come true for many expats. Besides being one of the top places in the world to retire, the country is known as one of the best places to live for a healthy, comfortable lifestyle. People from all over the world invest in Costa Rica real estate for vacation homes or to live permanently.
Political and economic stability, great weather, friendly people, high quality healthcare, and beautiful nature are just some of the reasons that make the Central American nation so attractive. Even though Costa Rica is not as cheap as some other places with respect to daily living costs, real estate is still considerably cheaper than in North America and Europe. Property taxes also are very low. And well-established infrastructure makes it easy for expats to move here.
People always have lots of questions about buying a home or property in Costa Rica. Following is a short guide to all you ever wanted to know about Costa Rica real estate.
You can legally buy property in Costa Rica as a foreigner.
Foreigners enjoy the same rights as nationals for owning real estate, with a few exceptions. Beachfront property in the maritime zone (within 200 meters of the mean high tide mark) is one.
The first 50 meters from the high tide mark is public property and is not available for ownership or permanent development, which is why there is no such thing as a completely private beach in Costa Rica. The remaining 150 meters of land is available for concession (a lease) from the municipal government. Concessions must be in the name of a Costa Rican or a Costa Rican corporation (controlled by a Costa Rican or a legal resident). Only foreigners with more than five years of legal residency in the country can own up to 49% of a concession.
Costa Rica real estate is typically owned by a corporation.
In Costa Rica, most people don’t buy homes or properties in their own name like in the U.S., but rather in the name of a corporation. A buyer can either form his or her own new corporation, or buy the company that owns the property already.
This is always a surprise to first-time real estate owners in Costa Rica, but is a common practice to protect the property from any individual liability — debt, legal action, etc. And if you aren’t a legal resident of Costa Rica, the corporation can open a bank account and obtain utility services for the home, while a non-resident foreigner cannot. Another advantage is that a family can purchase real estate together as a joint asset, listing the different family members as legal representatives of the corporation.
The two types of non-commercial shell corporations most often used for property titles in Costa Rica are an S.A. (Sociedad Anonima), like a C corporation in the USA, or an LLC (Limited Liability Corporation). An S.A. has a board of directors, whereas an LLC only has managers (as many as you want).
It costs about $500 to $600 to set up a new corporation, and the newly re-instated corporation tax (2017) is about $120 a year for inactive companies.
You can get Costa Rican residency by buying real estate.
If you invest in buying a house, piece of land, condo or apartment that is valued at $200,000 or more, you qualify for Costa Rican residency as an investor. Be sure to use a reputable immigration lawyer when applying for residency.
Property taxes in Costa Rica are relatively low.
Property taxes in Costa Rica are calculated at 0.25% of the value the property has in the public registry. Taxes are collected by the corresponding municipality. There is an additional annual luxury tax, paid in January, if your house, condo or apartment is valued at ¢129 million colones (approximately $230,000 USD) or higher.
Do your due diligence.
Definitely hire a reputable, experienced real estate lawyer and notary to: do a title search on the property in the Costa Rica National Registry to ensure there are no liens or attachments or other legal issues; prepare an official contract to be signed by you and the seller, which must be notarized; and submit the paperwork to the national registry to change the title of the property after the sale closes.
You should verify that zoning laws and other land use restrictions comply with your needs. Additionally, you should get an official land survey to check the property boundaries. There have been cases of expats buying properties that ended up being much smaller than they thought when official plans were checked.
Ensure the availability of water, electricity and other public services.
While public utility services are usually readily available, in rural areas water access may be an issue. It may be necessary to drill a well, in which case a concession from the Environment Ministry is required. Check to see what is available with any home or property you are considering purchasing.
Inspect a home or property for quality and issues before you buy.
Buyer’s remorse is unfortunately a common occurrence in Costa Rica for people who rush real estate purchases.
You should always try to arrange for an inspection of the home or property lot by a reputable third-party contractor to check for any undesirable issues, like problems with the electrical or plumbing systems, or drainage, etc.
If you are buying in a gated community or a brand new project, get details on the developer and construction company as to their reputation and quality. Visit the home or property lot both when it is sunny and when it is raining, turn on all the lights, open and close the doors, turn on the faucets, and pay attention to all details.
Don’t be too impulsive.
Many people fall in love with Costa Rica the first time they visit. And it is not uncommon for expats to buy real estate impulsively.
While it is fine to fall in love with Costa Rica, like any love affair, things always work out better when you take the time to get to know one another well. Patiently investigating where you want to live and what you want to buy will generally save you great heartache in the future.
Ready to live the dream of international living in Costa Rica?
The extraordinary eco-development of Portasol Living is a Costa Rica real estate investment you should investigate. Located in the coastal rainforest between the Central Pacific and Southern Pacific regions of Costa Rica, Portasol Living is minutes from beautiful tropical beaches and close to the famous Manuel Antonio National Park and the Ballena Marine National Park.
You’ll be amazed at its beauty: 1,300 acres of always green rainforest, a private nature reserve, waterfalls, streams, and abundant wildlife due to its connection with an important regional biological corridor.
Award-winning for its environmental and social responsibilities, Portasol Living is a sustainable gated community with impressive Costa Rica properties for sale with rainforest and ocean views, and exceptional Costa Rica vacation rentals.