Costa Rica Real Estate Transactions and Process

Real Estate Attorneys
Just like in many parts of the United States, in Costa Rica real estate transactions are through attorneys. Title companies may conduct the closing or may provide title insurance. Real Estate Attorneys perform the actual title research and coordinate the closing process.

Foreigners are welcome and encouraged to own titled land in Costa Rica (which is not the case in some other Latin American countries). Titled land in Costa Rica is similar to fee simple ownership in the United States.
Title insurance is available in Costa Rica and can be purchased through Latin American subsidiaries of well known companies such as Stewart Title.
All Costa Rica real estate properties are registered in the government centralized database at the "Registro Nacional". With a property's registration number or "folio real" you can look up a title over the internet if you know some Spanish.
Title is transfered through a transfer deed which in Costa Rica is called the "Escritura de Traspaso" which must be signed in the presence of a Notary Public. In Costa Rica the "Notary Public" is an attorney with an additional year of training to achieve this qualification.

When buying property in Costa Rica, you have several options to choose from on how you take title.
You can take title of the property in your own name individually, jointly with a spouse or other person or in the name of a corporation.
The most common practice in Costa Rica is to form a corporation and then hold title to your real estate in the name of the corporation. This is done for two primary reasons:
1- When properly structured, transferring ownership to the corporation can protect the property from liabilities which may be incurred by you in the future, as an individual. Costa Rican courts generally respect the corporate entity, as separate from the individual and with limited exceptions, will not pierce through the corporation to get at the individual.
2- When you sell property in Costa Rica, the transaction is subject to a transfer tax of 2.5% of the registered value of the real estate or sales price, whichever is greater. This tax becomes obsolete by simply selling your corporation which holds the property, to the the buyer. This will reduce your closing costs and increase your profits on the resale of your property.

Closing Costs

The actual costs to close a transaction will vary, depending on the specifics. Costs may include real estate transfer taxes, documentary stamps, notary fees, title registration, title insurance. If the transaction involves the formation of a corporation this involves additional costs.