FAQs
Our Blue Water Properties team has
many years of experience working
with buyers from around the world.
We’ve compiled this list of
frequently asked questions about
Costa Rica real estate to help you
to understand the purchase process.
Please let us know if you have any
further questions – we’re happy to
help!
• Note: Click over the question and
the answer will be shown.
Do I need an Attorney to buy
property?
You need an Attorney (Certified
Public Notary) with a solid
reputation to perform a study of
your property in the National
Registry and also to register the
property in your name, or the name
of your corporation. Although some
buyers use the attorney of the
seller to execute these duties, we
strongly recommend that you have
your own attorney represent you in
any transaction so you have legal
counsel looking out for your best
interests. Your attorney can also
assist you with the financial
aspects of the purchase.
How do I get started in my quest to
own Costa Rica Real Estate?
Buying in your own country can seem
intimidating enough. However, buying
overseas can be a whole other story.
With a little education, a great
Realtor, and great Attorney, you
can safely purchase property in
Costa Rica.
Our team at Blue Water Properties of
Costa Rica is here to show you the
areas that fit your lifestyle and
goals, in your price range and with
the amenities that you desire. We
show not only our properties but
those of the competition, because
that is what a reputable Real Estate
agent should do!
As a Foreigner, what are my property
rights in Costa Rica?
Unlike some countries, foreigners do
not need to purchase property with a
partner or through a trust. Costa
Rica's laws and constitution,
founded on over a century of
democratic principals, are also
extended to foreigners. There are
almost no restrictions placed on
ownership of land in Costa Rica
(with the exception of some kinds of
beachfront property--please see the
Maritime and Concession Real Estate
Section below). Costa Rica welcomes
foreign investment, and its property
laws reflect this.
Can I own property in my own name?
Yes, you can own real estate in your
own name, or in the name of your
corporation or company ( or L.L.C.).
Setting up a or L.L.C is not
difficult, and can be arranged with
the assistance of your lawyer for a
reasonable fee. Purchasing via and
S.A. or L. L. C. is more popular
with Costa Rica property buyers than
purchasing in their own names for
three reasons:
(1) First, depending on the tax laws
of your home country, it may be
preferable to have rental income and
capital gains (there is no capital
gains tax in ) recognized in a
corporation or company rather than
in your personal name. Further,
there may be flow through benefits
from an L.L.C.
(2) Second, it can make estate
planning less complicated, since you
can transfer or will shares of your
corporation or company to your
family.
(3) Third, it can cut costs when
selling your property, since you can
transfer the shares of the or L.L.C.
to the new buyer, which eliminates
certain government fees during the
transaction.
Is Title Insurance available?
There are several international
Title Insurance companies in ,
including Stewart Title (http://www.stewarttitlelatinamerica.com/).
How much are Property Taxes?
Costa Rican property taxes are very
low, only .0025% (1/4 of 1%) of the
registered property value. That
means that annual property taxes on
a purchase of $300,000 would be only
$750.
How much are closing costs?
Closing costs to transfer title of
the property from the seller to the
buyer total approximately 3.5% of
the registered value. About 2.25%
goes to the government in the form
of Real Estate Transfer Taxes and
Documentary Stamps, and about 1.25 %
to your lawyer for their services.
When purchasing directly from a
developer, the buyer usually carries
the closing costs. However, when
purchasing from a private seller, a
split of closing costs may be
negotiated. If the purchase is by
means of a transfer of shares rather
than title, the closing costs would
be less than 3.5%.
How do I know if my property is
titled?
Property in should be registered in
the Registro Nacional, or National
Registry. Both fee simple and
concession properties can be
registered. The National Registry
shows property ownership, and if
there are any mortgages, liens, or
judgments against the property. Your
lawyer should perform a search of
the National Registry as part of
his/her duties during the purchase
process. Your purchase contract
should stipulate that, if any
problems with the title are
discovered during this due diligence
period, the contract would become
null and void, or you may wish to
renegotiate the contract or extend
it if the problem can be legally
remedied.
The fact that a property is
unregistered does not mean that it
does not qualify to be registered.
However, we strongly advise against
the purchase of unregistered real
estate.
What are the Folio Real Numbers and
Plano catastrados?
Each property registered in the
National Registry is assigned a
unique number, which is called the
Folio Real. This number is used for
identification, and is made up of
three parts. The first group of
numbers signifies the province where
the property is located, the second
group of six numbers is the actual
property number, and the last group
of numbers indicates how many
individuals own the property.
Properties require a Folio Real
number to obtain clear title.
Also accompanying each registered
property is a Plano Catastrado, or
survey plan that shows measurements,
size and location, as well as other
details, such as whether or not the
land is situated in an area with
restrictions (ie near a National
Park or in Private Development). The
Plano Catastrado must be recorded in
the National Registry in order for a
property to be transferred,
mortgaged, or purchased.
Can I get financing?
Technically, Costa Rican
institutions offer financing to
foreigners. To date, however, the
process has proved arduous and on
the whole unsuccessful. If you need
to borrow funds, it is usually much
simpler to do so in your home
country, and interest rates are
generally much lower. That being
said, more international
institutions, such as ScotiaBank and
H.S.B.C., are commencing operations
in and are working on financing
packages for foreigner. Please ask
your Blue Water Properties agent for
more details about financing at the
time of your purchase. You can also
inquire about developer and seller
financing, which may be available on
certain properties.
Do I need to worry about Squatters?
The Costa Rican government has
established certain laws to protect
citizens who have resided on and
maintained a property for many
years. These laws are commonly
referred to as “squatters rights.”
Problems with squatters are
extremely rare in developed areas,
since you and your neighbors would
quickly become aware of any
unauthorized persons dwelling on
your property. If you decide to
purchase land in a remote region, it
is recommended that you have a
responsible individual, such as a
caretaker, verify periodically that
nobody unauthorized is residing on
it.
What is the Maritime Zone?
The Maritime Zone is defined as the
first 200 meters measured
horizontally from the high tide
mark, and includes any natural
formation that overcomes the ocean,
such as islands, mangroves and
estuaries. The Maritime Zone is
divided into two different sections:
(1) The Public Area; and the (2)
Restricted Area.
How is the Maritime Zone divided,
and what part of the Maritime Zone
is considered concession property?
The first 50 meters is called the
Public Area. As its name suggests,
this area is for public use, so
property within Public Area is
cannot be privately owned. No form
of construction or development is
permitted within the Public Area,
with the rare exception of
specialized, government-approved
projects such as marinas. The result
of this zoning is that, in , all
people enjoy access to the beaches.
In about 5% of coastal areas (for
instance, much of Brasilito, Potrero,
Tamarindo and their surrounding
beaches), fee simple title begins
after the Public Zone, that is, 50
meters from the high tide mark. The
definition of fee simple property is
similar to that in North America and
: the owner has the right to use the
property, improve it and sell it.
The conditions for ownership of fee
simple property are the same for
both foreigners and Costa Ricans.
The next 150 meters after the Public
area is called the Restricted Area.
In 95% of the country, the
properties that fall into this 150
meters are available for concession
only. A concession is essentially a
lease that is granted from the
government to the buyer or “lessee”
for a specified period of time. The
lessee is allowed to build, improve
and even subdivide concession
property. As with all property in ,
permits to do so must be obtained
from the municipal government in
accordance with Costa Rican law.
Can foreigners lease concession
property?
When it comes to concession
property, foreigners and Costa
Ricans are subject to different
rules. Foreigners who have lived in
the country in excess of five years
may be allowed majority ownership of
concession property, while
foreigners who have lived in the
country for lesser periods are
generally only permitted minority
ownership.
