Most of us spent a large portion of 2020 shopping online and traveling vicariously around the world. We would check out real estate sites and dream of living somewhere else—anywhere besides the place we were quarantining.
Before the pandemic, we dreamt of the possibility of staying home for a few days to relax and stop running the rat race. Then when we found ourselves trapped at home, we desperately wanted out. You were not alone in these feelings. Millions of people searched “living in Costa Rica” and hundreds—if not thousands—are now in the process of buying property in paradise.
Which raises the question, is it really possible for a foreigner to own property in Costa Rica? The simple answer to that question is yes. A foreigner that has not established residency has the same right to own property here as Costa Rican citizens. Ownership rights are guaranteed by law and apply whether the property is in the name of an individual or a corporation. Even if you are living in Costa Rica on a tourist visa (and leaving the country every 3 months) you can own property.
Consult an Expert – Due Diligence is Key
Although a real estate broker or realtor is not required to purchase property, it is always a good idea to have an expert guide you through the process. Especially when you have little or no experience purchasing property outside your native country. That is especially true when you are not familiar with the process and terminology involved in transacting business in a foreign land.
A title or deed is called an escritura. The first thing you are going to want to find out about a property is if the title is properly registered and free of liens. This is extremely important because it is common in Costa Rica for properties to have been in a family for years. Often these properties were never properly registered or have had the taxes paid. To do a title search, you (or your lawyer) will take a copy of the survey plan to the Public Registry of Properties in the city of Liberia. They will check their records and provide you with current information about the desired property.
The process of transferring the title must be prepared by and executed before an attorney or notary. In North America, a notary only authenticates signatures, but in Costa Rica the role is much more expansive. To be a notary in Costa Rica you first must be an attorney, then go to school for 2 more years and pass more exams to become a “Notario” or notary.
How much can you expect to pay in closing costs? The custom in Costa Rica is for the buyer to pay the costs; however, this can be altered by agreement. The closing costs will be about 4-5 percent of the purchase price. The seller typically pays the realtor’s commission.
One Type of Property Foreigners Cannot Own
There is only one type of property that a person who has not been a legal resident of Costa Rica for 5 years cannot buy outright, and that is beachfront property. The first 200 meters inland from the high tide mark is called the Maritime Zone and can only be leased by a concession from the local municipality. This land is not titled. Concessions can be granted for 5 to 20 years, the latter being the more common.
The lease could be purchased through a legal shell corporation in which a Costa Rican citizen is the majority shareholder. Keep in mind the first 50 meters from the high tide mark is considered a public space and cannot be built on. There are strict requirements for building on the remaining 150 meters, so you will want to do all sorts of due diligence BEFORE deciding to purchase the concession.
There are so many beautiful properties in the Playa del Coco area just waiting for you to customize and call home. What a relief it is to know that you can own it without being a resident…although once you live here you will never want to leave!
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