Frequently Asked Questions About Buying Property in Costa Rica

Buying property in Costa Rica can be an excellent option for living, vacationing, or investing. Below, we answer some of the most frequently asked questions.

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Can a foreigner buy property in Costa Rica?

Yes. In general, a foreign national can purchase titled property in Costa Rica even without having residency in the country.

The property may be purchased in the buyer’s personal name or through a Costa Rican corporation. The most suitable option will depend on the type of property, its intended use, and the buyer’s particular circumstances.

Properties located within the Maritime-Terrestrial Zone are subject to special regulations and should not be treated in the same way as titled properties registered with the Costa Rican National Registry.

 

Do I need residency in Costa Rica to buy property?

No. In general, temporary or permanent residency is not required to purchase titled property in Costa Rica.

A foreign buyer may appear personally before a Costa Rican notary public to sign the property transfer deed.

 

Which documents should be reviewed before purchasing a property?

Before transferring a significant amount of money, buyers should review at least the following:

• Property registry certification;

• Cadastral survey plan;

• Identity and legal authority of the registered owner;

• Outstanding municipal taxes;

• Water and electricity services;

• Zoning regulations and, in the case of land, official water availability;

• Construction permits;

• Condominium fees, when applicable;

• Liens, mortgages, easements, and registry annotations;

• Legal status of the owning corporation, when the property belongs to a company.

For land intended for construction, it is not sufficient to confirm that a water pipe is located nearby. Official water availability and the permitted use of the land must be formally verified.

 

What are the closing costs when purchasing property?

As a general reference, buyers commonly budget approximately 3.5% to 5% of the purchase price for closing costs.

However, the actual percentage may vary depending on the purchase price, the structure of the transaction, financing arrangements, and the professional services required. Additional expenses may include the incorporation of a new company, bank charges, and fiduciary or escrow fees when an escrow account is used.

 

How much property tax is paid in Costa Rica?

The standard annual property tax is generally 0.25% of the value registered with the local municipality.

For example, if the municipal value of a property is ₡100,000,000, the standard annual property tax would be approximately ₡250,000.

 

Is it better to purchase property personally or through a corporation?

Both options are possible.

Purchasing property in your personal name is usually simpler and may reduce future administrative expenses. Purchasing through a corporation may be convenient in certain circumstances, particularly when there are several investors, a commercial activity, estate-planning considerations, or a specific management structure.

However, a corporation also creates ongoing obligations, including maintaining corporate books, filing declarations, paying corporate taxes, updating company information, and covering possible professional fees.

 

What does it mean when a property is located within the Maritime-Terrestrial Zone?

The Maritime-Terrestrial Zone is a coastal area governed by special legislation.

As a general rule, it includes the first 200 meters measured from the ordinary high-tide line. The first 50 meters constitute the public zone, while the following 150 meters form the restricted zone, subject to the exceptions established by law.

In many areas within this zone, buyers do not acquire fully titled private property. Instead, there may be a municipal concession subject to a specific term, annual concession fees, authorized use, zoning plans, and other conditions.

Costa Rica’s Maritime-Terrestrial Zone Law establishes special restrictions concerning concessions, transfers, and foreign participation.

 

What is the usual process for purchasing property?

Although every property transaction is different, the process normally includes:

1. Selecting the property.

2. Presenting and negotiating an offer.

3. Signing an option-to-purchase agreement or reservation agreement.

4. Paying an initial deposit, preferably through a secure mechanism such as an escrow account.

5. Completing the legal investigation or due-diligence process with an attorney.

6. Confirming financing, when applicable.

7. Preparing the public transfer deed.

8. Paying the remaining balance and the agreed closing costs.

9. Signing the transfer deed before a notary public.

10. Submitting and registering the transfer with the Costa Rican National Registry.

The buyer should obtain independent legal advice before paying a non-refundable deposit or signing a binding purchase commitment.

 

How much is usually required as an initial deposit or down payment, and how does it work?

The amount of the initial deposit may vary depending on the property, the agreement with the seller, and the method of financing.

In a cash purchase, an initial deposit is normally required when the option-to-purchase agreement is signed. This deposit reserves the property and demonstrates the buyer’s commitment to the transaction.

In many cases, the deposit may represent between 5% and 10% of the agreed purchase price, although the percentage may vary depending on the negotiation.

The deposit is held until the due-diligence process has been completed. During this period, the matters specified in the purchase agreement are investigated and verified.

If the results do not comply with the agreed conditions or are not satisfactory to the buyer, the buyer may withdraw from the transaction and request the return of the deposit, subject to the provisions of the agreement.

However, if the due-diligence process is completed satisfactorily and the buyer later decides to withdraw for a reason not permitted under the agreement, the buyer may lose the amount paid as the deposit.

 

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Our services include assistance with property searches, coordination of property viewings and communication with property owners and the professionals involved in the transaction.

The information provided on this page is general and educational. It does not replace advice or review from an attorney, notary public, accountant, engineer, architect or competent authority.

Every property and transaction should be individually reviewed before making a purchase decision.