Costs & Fees
Last Updated: Apr 26, 2012
You've done your research, found the perfect home and purchased your dream property. Congratulations! Costa Rica's exotic allure, from active volcanoes to palm-lined beaches, is now yours to enjoy. What will you do first? Will you visit Sarchi for beautifully handcrafted wood furniture, or dig your toes into the warm sands of the nearest beach? Or will you hike through a nearby cloud or rainforest, searching the treetops and paths for interesting wildlife?
One of the many advantages to living in Costa Rica is the comparatively low cost of living. For homeowners, this translates into low property taxes and legal fees based on property value. Closing costs – registration fees, notary and attorney fees, documentary stamps and transfer taxes – will amount to no more than 6% of your total purchase price. Real estate commissions and mortgage fees, if any, are additional.
Property Transfer Taxes
Transfer taxes (impuestos de traspaso) are determined at 3.1% of the declared property value. In Costa Rica, the declared property value is always lower than market value (your purchase price). It is your right to register the property at either the declared value or the sale price. Though registering the declared value will net you lower property transfer fees in the short run, this practice may have certain risks. It is important to talk with your lawyer to determine which method is best for you.
Government Taxes and Fees
Along with property transfer taxes, your notary must pay on your behalf a registration fee (0.5%) and purchase a combination of agrarian, hospital, municipal, Bar Association, National Archive and fiscal stamps called the derechos de traspaso (0.55%). Both are calculated as a percentage of the declared property value.
Attorney and Notary Fees
In Costa Rica, notaries are highly-trained lawyers with additional legal duties. Your real estate lawyer should also be a notary, so he or she can help you throughout the entire home buying process. Your notary will purchase the documentary stamps, affix (anotar) the stamps to your property documents, and register them (inscribir) on your behalf.
At closing, request that these documents be registered in either your name or the name of the corporation you established for property ownership. This process should take no longer than 60 days. Your attorney should also provide you with a document receipt that proves you have paid all legal fees, that the property deed (escritura) has been transferred to you, and that all property registration documents have been paid for and property stamped.
All lawyer and notary fees are assessed as percentages of the sale price, not the declared property value. Attorney fees amount to 1.5% of the first $1.750 (one million colones) and 1.25% of the remaining sale price. For example, a $100,000 home purchase would be taxed at approximately $1,300.
Per Costa Rican law, real estate commissions may range from 3-10% of a property sale price. The percentage commission will depend on the type of property, realtor and, possibly, your negotiating skills.
Mortgage Registration Fees
In Costa Rica, the borrower is required to pay all mortgage drafting and registration fees. A mortgage may be issued at the time of sale by adding a mortgage addendum to the transfer deed. This type of mortgage registration is assessed at approximately 0.25% of the sale price plus 0.53% of the sales price in documentary stamps. An additional 0.5-1.25% of the mortgage amount is due in notary fees.