Buying and owning real estate in Costa Rica is almost identical to purchasing property here in the US, Canada, or Europe. That is, ownership is fee simple, the highest right of property ownership there is.
Here are some answers to a few of the most common questions we get:
- It says ‘almost identical’ above. What is the exception? There are restrictions on the ownership structure of beachfront property. This is called Concession, land within 200 meters to the coastline. No one can own this public land outright.
- What currency is used to purchase? All real estate transactions are executed in US Dollars.
- Can I live in Costa Rica? Your real estate purchase can serve as a vehicle to Costa Rica’s residency process. Residency status can be “Pensionado (Retired)”, ”Rentista” status that provides proof of monthly independent income, or “Inversionista” status, which comes with the purchase of Costa Rican real estate.
- How do I find a property? There is no official Multiple Listing Service (MLS) like the US, although some brokers will use this term for their listings. This makes finding comparable listings difficult and often impossible. Additionally, there is no licensing body that regulates the sale of Costa Rican real estate. That’s why the team you employ to locate and purchase property is crucial.
As with any big purchasing decision, due diligence is strongly advised. Your trusted team can coordinate a discovery/scouting tour or series of tours to give you an idea of the full range of offerings to suit your lifestyle and investing objectives, and make sure you have competent legal representation to protect you throughout the process. Do NOT rush into any purchases, Costa Rica is booming, but there are plenty of opportunities!
- How do agent commissions work? As in the US, the seller will pay broker commissions and they are split between the seller’s and buyer’s agents.
- What about Title Search? Your broker/lawyer will locate the “Folio Real” Identification Number and conduct a title search. This will provide details on the property, its area, location, exact size/boundaries, ownership history, tax status, liens and other details.
- How do I protect my money? Once your offer is accepted by the seller and their representatives, funds will be placed in an escrow account to protect you and ensure you get what you are buying. Any money the seller would receive from you would only get released after certain conditions are met. Your lawyer will ensure that all transactions are handled appropriately, giving security to your purchase and your money.
What are property taxes like in Costa Rica? They are quite low compared to the US. As of this writing, municipal property taxes were .25% on properties valued $200,000 and below. An additional luxury tax of .25% is assessed on properties above $200,000.
