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Costa Rica Real Estate FAQs

Finding a Property


Can I own property in Costa Rica?

Yes. With a few exceptions, as per the country's constitution, foreigners have the same rights to property titles here as do Costa Ricans. The exceptions are mostly with concessioned beachfront property.

Do I need a real estate agent?

Good question. And much like the question: 'Do I need a guide?' when traveling abroad. Some people are happy to take their chances and navigate the unknown foreign turf, while most would be better off with a guide.

There is no real estate license in Costa Rica--only a certification. Anyone can sell real estate, and get a commission from the seller. However, most people who are not certified, and/or do not have years of experience in the industry do not know the market, or sales history--or even laws governing the purchase and sale of real estate in this country.

Here's the deal: There are many fewer laws and people policing the real estate market in Costa Rica, and it's hard to educate yourself without years of time to dedicate. For most people, working with an honest, knowledgeable real estate agent will be the best decision they make. Not only does the agent have the connections and sources to be sure and cover the entire market, but also the history and knowledge to help guild a buyer when it comes to purchase price.

How do I know what a property is really worth?

There is no multiple listing service for Costa Rica, unfortunately, and no system of appraisals, either. This means that the only registries of past sales information are out in the public, primarily with the real estate companies that sold them. This information is not generally shared.

Each property has a 'declared' price at the local municipality. The declared value of a property is used for property taxes, and must be updated by the property owner every 5 years by a sworn statement only.

For these reasons, it's important to work with an experienced, honest, competent agent who can give you the sales history of an area, and who is better able to recognize the current values of property in the area.


The Purchase Process


How do I get financing in Costa Rica?

Financing for property purchase is not as readily available nor inexpensive in Costa Rica as many developed countries. Banks are more conservative with their loans, and charge higher interest rates (ie 8%+).

Because of this, sellers will sometimes provide seller financing for a small portion of the purchase price--but usually only in the short term (ie 1-5 years) and usually at similar interest rates to the local banks.

It is highly recommended that you secure your financing in your country of residence, as it will be easier, less expensive, and quicker.

Do I need an attorney?

Yes. Not only is it necessary to have an attorney prepare the deed transfer or share transfer documents, but it is also essential to work with a trustworthy attorney who will do the necessary due diligence on the property. We recommend not cutting corners when it comes to legal representation.

How much does an attorney cost?

Attorneys charge a set amount for the sale of a property, which amounts to 1.5% of the first $2,000 and 1.25% of the remainder. Usually, the due diligence necessary for a property is included in these fees, but most attorneys will bill by the hour for extra work.

What are the costs associated with buying a property?

One-time Fees:

Attorney fees = 1.25%
Transfer fees = 3%
Title insurance = 1%
Holding corporation = $500

Yearly Fees:

Property taxes = .25% per year (of declared value of property)
Corporation tax = $400 per year (for holding corporation)

Can I get title insurance in Costa Rica?

Yes. There are a number of prominent title insurance companies in Costa Rica, including Stewart Title and Chicago Title.

Can I get homeowner's insurance in Costa Rica?

Yes. There is a single government institution called INS (Instituto Nacional de Seguros) which provides all types of insurance in Costa Rica, including health and life insurance.


Property Ownership in Costa Rica


What taxes am I liable to pay in Costa Rica once I own a property?

Property taxes: Property taxes amount to .25% of the declared value of the property.

Capital Gains taxes: There are no capital gains taxes in Costa Rica, so if you make a profit by selling your property you keep it!

Corporate taxes: There is a yearly corporation tax in Costa Rica which costs approximately $115 for non-active holding corporations.

Income & Sales taxes: As per the law in Costa Rica, if you rent out your home or condo for profit you must also have it registered as a local business, and pay both income taxes (approx. 10%, depending on the income level) and sales taxes (13%).

Municipal Business Permit: If you rent your property out, you must also pay for a yearly municipal business permit. The cost depends on the declared amount of income, but runs $100+.

What is the Luxury Home Tax?

The luxury home tax (Impuesto Solidario) 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 colones (about $200,000 at the current exchange rate). The tax is based on a sliding scale and depends on the property value. A home valued at $200,000 is taxed at .25% percent of the property value, and a $1.5 million dollar home is taxed at .40%.

How do I manage my property when I'm away?

If you are an absentee owner, you will need to have a property manager whether or not you rent it out. Properties in Manuel Antonio require regular cleaning and maintenance, regardless of whether or not they are inhabited. Luckily, there are many options for property managers and vacation rental agencies in Manuel Antonio, including our own sister agency:

What else do I need to know now that I have a property in Costa Rica?

Whether your goals are to find a retirement hideaway, diversify your wealth through land ownership, or find an income-producing property, be sure to find the opportunity to enjoy it! Life in Costa Rica is a laid-back, but there is plenty to do. Live deep and suck out the marrow of life!