Buying Real Estate in Costa Rica

Many people have asked me if buying real estate in Costa Rica is the same as buying real estate in the US. My answer to them is in many ways yes but in some ways no. One of the main reasons why I am investing in Costa Rican real estate is because of some very key similarities that it has to buying real estate in the US. The most important similarity to me is that real estate is fee simple, where the owner has the right to control, use, and transfer the property at will without the use of a trust or trustee. You don't have to be a resident of Costa Rica to own property and you're entitled to the same ownership rights as citizens of Costa Rica. Ownership of real estate is fully guaranteed by their constitution to all including foreigners.

Below are my recommendations when buying real estate in Costa Rica and explains the basic process involved.

Make sure that you have a current and valid passport as this will be a necessary document in order to buy real estate in Costa Rica.

Hire a good real estate broker and real estate attorney. In Costa Rica, real estate brokers do not need to be licensed. That means anyone can set up shop and sell real estate which means there is little regulation and you do not need any qualifications, training or experience whatsoever to call yourself a "broker".

When you find a property you want to buy, work with your attorney to obtain a registered plot map (plano catastrado) from the National Registry (Registro Nacional). The National Registry is the government organization that it is responsible for receiving and recording all documents that relate to real estate transactions. The plot map should clearly show the details of the property so that you can confirm what you are buying matches what is recorded. It will indicate the property size and boundaries in relation to surrounding properties so you can see its exact location. It is also not a bad idea to spend a little extra money and hire a topographer to re-survey the property and have the new plot map recorded in the Map Registry (Catastro) department which is located in the National Registry.

It is highly recommended you use a reputable international title company like Stewart Title. They can help you obtain the registration number of the property in the National Registry and help do a complete title search which includes ownership, property location, boundary lines, recorded survey, liens, declared value of the property and any other issues that might be recorded on the property. We currently are using Stewart Title exclusively for all our clients buying in our developments. All our buyers obtain a title guaranty to protect them by guaranteeing the property is free from any liens that could affect the purchase and rights to the property from a fraudulent transfer of title.

Before closing on the property, the transfer deed (esctritura) is drawn up and signed by the seller, buyer and notary.

The deed is recorded in the notary's record book with a copy given to the National Registry for registration under the new owner's name.

Payment is made of all due taxes, stamps and notary fees.

After you close on a purchase of a property in Costa Rica, it is important to obtain a copy of the closing documents signed by the National Registry naming you, or your company, as legal owners. I recommend getting an Anonymous Corporation (SA), itself registered in the Costa Rican Registry of Corporations to hold title to your property. This will provide some form of privacy and, when selling the property, there are no capital gains tax paid in Costa Rica when selling a corporation that owns the property. Also, inheritance taxes in Costa Rica are high, but an anonymous corporation's assets are never included, and the corporation never dies. Most all of our clients purchasing properties in our developments purchase the property using a Costa Rican corporation that we help setup.

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