- Can foreigners or non-residents own property in Costa Rica?
- Does Costa Rica have a central Multiple Listing Service (MLS)?
- Should I use a real estate agent?
- Do I need a lawyer?
- I found an online listing I love. What next?
- Once I decide on a property, what are the steps to buying a home in Costa Rica?
- Can I get financing in Costa Rica?
- How much are closing costs?
- Does Costa Rica collect property taxes?
- What is the luxury home tax and to whom does it apply?
- How much is the agent commission, and who pays it?
- Are home inspections common?
- Can I purchase title insurance?
- Can I buy homeowners’ insurance?
- How is the title transferred?
- Should I list the property in my name, or under a corporation?
- Will Costa Rica charge me capital gains tax?
- What regulations govern beachfront property?
- Are electricity and water available in rural areas of Costa Rica?
- What is concession property?
- What’s a better deal: buying or building?
- What does it cost to build a home?
- Can I have a home built in Costa Rica to North American standards?
- Does Costa Rica have zoning laws?
- How can I find a good builder?
- Are squatters a problem?
- Can I hire a property manager while I’m away?
- How can I find the ideal property for my needs?
- Will I be able to hire household help?
Yes, according to the Costa Rican Constitution, foreigners and non-residents have full legal rights to purchase and own property.
There is no central MLS in Costa Rica. Several websites advertise an MLS search, which is usually a collaboration between several real estate agents to list their properties in one location.
A real estate agent can help you navigate the Costa Rican real estate market and the language barrier. However, bear in mind that agents are not required to be licensed or pass a test, so anyone can legally advertise himself as a real estate agent.
A lawyer is an important aspect to purchasing real estate in Costa Rica. Find a lawyer who speaks your language and answers questions promptly; this will ensure the smoothest transaction possible. Your attorney will help you through several steps of your purchase, including a title search, contingency releases, distribution of funds, title transfer, and more. 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 $2,000 and 1.25% of the remaining sale price.
Since there is no central MLS, only the agent listing the property is authorized to show it. Contact your real estate agent, or, if you do not have one, contact the listing agent.
Begin the process by making an offer of purchase. Have your lawyer draft up the purchase agreement, and make sure you’re clear on all the details. When the seller accepts your offer, you will make a deposit on the property. Now it’s time to order a survey of the property, run a title check and, if desired, purchase title insurance and hire a home inspector. When you’re ready to proceed, your lawyer will help complete the sale and make sure all legal requirements are fulfilled.
Bank financing is very complicated due to local laws and bureaucracy, and interest rates are high – usually around 10-12%. However, many sellers offer partial financing, usually with a down payment of 40-50%.
Typically, the buyer and seller share the closing costs, which are calculated as a percentage of the property’s value; registration fees, notary and attorney fees, documentary stamps and transfer taxes will amount to no more than 6% of the property’s declared value. Though it used to be common practice to artificially lower the property’s declared value, this is a dangerous game that could cause future repercussions.
Costa Rica collects property taxes, though they are very low compared to taxes in the United States. Typically, properties are taxed at 0.1% of the property value.
The luxury home tax is collected by the Finance Ministry and is not related to existing property tax. The tax applies to anyone with homes valued at more than 106 million CRC (about $212,000 at the current exchange rate). The tax is based on a sliding scale and depends on the property value. A home valued at $212,000 is taxed at .25% percent of the property value, and a $1.5 million dollar home is taxed at .40%.
Per Costa Rican law, real estate commissions may range from 3-10% of a property sale price. Unless the buyer agrees to split the costs, the seller is legally responsible for paying the entire real estate commission.
They are not common, but they are extremely useful. We highly recommend contracting an experienced home inspector, or at the very least a trusted contractor, to examine your potential purchase from top to bottom and provide a quote for necessary repairs.
Yes, several companies provide title insurance in Costa Rica; most are backed by U.S. title insurance companies. The cost is calculated at around 3% of the property purchase price.
Homeowners’ insurance is available for a very reasonable rate. You may choose various options and add-ons, such as earthquake or theft insurance.
Your lawyer will help prepare the title transfer, also known as a conveyance deed (“escritura de traspaso”), which will effectively transfer the property to your name.
The benefits to purchasing a property in a company name include greater options regarding taxes and liability.
The Costa Rican government does not collect capital gains tax.
Costa Rica’s Maritime Zone Law protects the first 200 meters of land stretching inland from the ocean. If a potential property is located within 200 meters (about two blocks) of the beach, check public records for a municipal lease. Without a lease from the local municipality, any existing or future structures may be illegally located.
This largely depends on the location, but most properties have electricity and water brought to the property boundary. It is the responsibility of the owner to connect those utilities on the property itself.
Concession property is beachfront land leased by the local municipality, and must be approved by the Costa Rican Institute of Tourism (ICT). Concessions generally last for 20 years, at which point they may be renewed for another term.
That depends on what you want. If you find your dream property already built, chances are you can negotiate a great deal. However, purchasing your ideal land and building can also prove an amazing value, so it all depends on your preferences and needs.
In most cases, new construction runs $40-$100 per square foot ($430-$1,076 per square meter). Very simple construction starts around $30 per square foot ($315 per square meter), while luxury homes can climb to more than $200 per square foot ($2,152 per square meter).
There are numerous Canadian and American builders and architects that work in Costa Rica and build homes using U.S. standards. Many have adapted their building methods to take advantage of local building materials and labor.
Yes, there are zoning laws in Costa Rica, although San Jose is the only area with prominent zoning.
Recommendations and references are extremely important in Costa Rica. Ask around, check with friends, and inquire on online forums and message boards for good recommendations. Your embassy may also be able to help.
According to Costa Rican law, a squatter can acquire rights to a property if the property owner allows that person to use or maintain possession of the property for more than a year. Once the property has been acquired it cannot be taken away, except for reasons such as eminent domain, and then only with proper compensation. To guard against this possibility, hire a caretaker to live on the property.
Yes, caretakers are affordable – generally less than $500 per month plus lodging – and offer excellent protection for your property.
We have both commercial and private properties for sale and lease; just let us know your preferences, price range and location and we will do our best to locate the right property for your lifestyle and budget.
Household help is very affordable. Housekeepers, who often double as nannies and cooks, earn $2-$3 per hour. Handymen and gardeners charge about the same.