Here at the beach, one of the most frequent questions we field regards titled vs. concession property in Costa Rica: What are the differences? Is concession property a safe buy? How hard is it to find titled land or real estate? Is there a big cost differential?
For most international buyers, the idea of concession property is a foreign concept: Essentially a municipal lease, concession property entitles you to restricted land use for a specific (and renewable) period of time. And while that may seem like it should set off warning bells, you should know that concession property is very commonplace in Costa Rica and is considered a safe purchase. (As always, hire seasoned professionals and complete your due diligence.)
Titled property, on the other hand, is yours free and clear. But it’s only 5% of all oceanfront property in Costa Rica, making it hard to find and more expensive to purchase.
With that said, let’s break down the titled vs. concession property in Costa Rica debate into its relevant details:
Costa Rica’s Maritime Zone Law
In 1977, Costa Rica passed the Maritime Zone Law (Law 6043, la Ley sobre la Zona Marítimo-Terrestre), which defined the country’s maritime zone as the first 200 meters (about 660 feet) inland from high tide. Specifically:
- Public Use Zone: The Public Zone (where new real estate cannot be built) occupies the first 50 meters (~165 feet) from ordinary high tide, as well as all areas exposed during low tide, including mangroves, estuaries, cliffs, rocky outcroppings, etc.)
- Restricted Use Zone: The restricted zone occupies the coastline from 50-200 meters inland from ordinary high tide. Municipalities are responsible for their Restricted Use Zone, which they can concession out.
So, what does this mean? Essentially, after 1977, all Costa Rican oceanfront is public and land use is restricted for 200 meters / 660 feet inland from the high tide mark.
And what does that mean? Bottom line: Buying oceanfront and/or beachfront real estate is possible and commonplace, but you’ll want to understand titled vs. concession property in Costa Rica and how it applies to your purchase.
Titled vs. Concession Property in Costa Rica: What’s the Difference?
In Costa Rica, oceanfront real estate is divided into two categories: titled property (5% of all beachfront property) and concession property (95% of all beachfront property).
Titled property (also known as “fee simple,” in English-language real estate parlance) means that you have absolute ownership and recognized rights of possession. Titled property holds the greatest and most ownership rights when it comes to Costa Rica real estate. Notably, titled oceanfront or beachfront property is very rare in most of Costa Rica – it’s not as rare in our area of Tamarindo-Potrero-Langosta-Flamingo – due to the Maritime Zone Law.
Concession property is essentially the right to use and enjoy, for a specific time period (usually, 20 years), any property located within the public Maritime Zone. Essentially, concession property is a lease. As mentioned above, Costa Rican law dictates that all oceanfront (50 meters inland, as measured from high tide) is public land; land from 50 to 150 meters inland (200 meters, in total), as measured from high tide, is concession property.
Notably, foreigners have full and equal ownership rights to titled property and most concession property. The only caveat is for concession property held in a corporation: Foreigners may not own more than 50% of the shares in that corporation.
Concession Property in Costa Rica
Let’s start with what you really want to know: Yes, concession property is a safe purchase. (Did you know that even the illustrious Four Season at Peninsula Papagayo is concession property? True story.)
The bottom line is, 95% of oceanfront property in Costa Rica is concession property. It’s common and, for more than four decades, has been the law of the land: The regulations are well known. The kinks are worked out. Concession property can be a great purchase.
Here’s how it works: Concession property is essentially a municipal lease, most often renewable in 20-year increments. More importantly, as long as you pay your annual dues/taxes and follow land-use permissions (based on municipal rules), then your concession should be renewable ad infinitum.
Pros of Concession Property in Costa Rica:
- Greater Inventory: As 95% of all oceanfront property is concession property, in most areas of the country, you’ll have more choices, if you extend your search to concession property.
- Lower Prices (Sometimes): Concession property is typically priced lower than its titled equivalent but, that said, as oceanfront real estate is already so valuable, concession property is still some of the most valuable real estate on the market.
Cons of Concession Property in Costa Rica:
- Annual Tax/Dues: Concession property carries its own annual dues, which means that your annual taxes on concession property are higher than they would be on an equivalent titled property.
- Use Restrictions: One of the biggest differences between titled vs. concession property in Costa Rica is what you can do with it. While titled property is yours, free and clear, concession property is restricted to municipal regulations on what you can build, how you can use the land, etc.
- Residency Requirement: To purchase concession land, you must either have residency for 5+ years or hold your property in a corporation, for which foreign ownership can only account for 49%. (A buyer’s attorney often holds the majority share in the corporation, without signing power.)
- Cannot Serve as Collateral: Concession land cannot be used as loan collateral. However, as loans are difficult, if not impossible, for foreigners to secure, this is a moot point for most international buyers.
Titled Property in Costa Rica
While concession property is very common and well regulated, there’s no real contest in the debate of titled vs. concession property in Costa Rica: If and when possible, titled property is preferable to concession property.
Pros of Titled Property in Costa Rica:
- Very Valuable: Because inventory is so low, titled beachfront retains its value (and a higher value) than its concession equivalent. You will never have trouble selling your titled oceanfront property.
- No Restrictions: Because you own titled property, free and clear, you can do with it as you please – no permissions required.
- Non-Citizen Ownership: You do not need to be a citizen or even a long-time resident of Costa Rica to own titled property.
- Lower Taxes: Because there are no concession taxes to pay, your annual taxes will be considerably less than a home or land held in concession.
Cons of Titled Property in Costa Rica:
- Low Inventory: Only 5% of all oceanfront property in Costa Rica is titled. That means that it can be very difficult to find titled land or titled construction, making it even harder to find your “ideal” real estate – a needle in a haystack, in a field full of haystacks.
That said, titled property is fairly common in our area of Tamarindo, Potrero, Langosta, and Flamingo. Anecdotally, I (Becky Clower, owner of Blue Water Properties) represented buyers here for over 15 years and only this year negotiated my first concession beachfront property. And I’ve sold a lot of titled oceanfront!
Oceanfront Hopes and Dreams? Let’s Discuss Titled vs. Concession Property in Costa Rica
You have questions, we have answers! Whether you’ve already scoped out your perfect slice of paradise or are just digging into the topics of oceanview vs. oceanfront, titled vs. concession property in Costa Rica, we can help you explore the wide world of purchasing real estate on the Pacific Coast.
At Blue Water Group, we’re committed to you. Not to selling you a property or spamming you with all the options, but to helping – genuinely and with good intent – to match you to the perfect property for your needs and wants. We thrive on relationships and promise the fastest communication and best services in the industry.
At Blue Water Properties of Costa Rica, we’re proud to offer some of the best Costa Rica real estate. We have both condos and homes, land, and businesses for sale, including titled property.
Go ahead – try us. Give us a chance to show off our expertise – and wow you with the possibilities! We look forward to it.