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So, you have decided that you not only LIKE paradise, you’d like to also own a piece of it!

Well, that’s pretty exciting!Depending on where you are coming from, you can get something cheaper and nicer than you could back home with the same money, unless you are in one of the boom town tourist traps or Gringo Gulches, such as Escazu, Rohrmoser, Santa Ana, etc.And even there, sometimes there all deals to be had, but you have to be alert!

In this chapter, we are going to show you many different aspects to the real estate business in Costa Rica, and possibly give you some guidelines or help along the way.

First, though, let’s start with some basics.

Foreigners, for example, can buy real estate in Costa Rica in their own name if they so desire.This contrasts with some other countries in the world where you either have to lease property only, or do it through a corporation only.

There is no special restriction for foreigners on what you can and cannot do with real estate here.Both natives and non natives are on an equal footing.

And the Public Registry, which records titles and deeds, has recently modernized and is now computerized.Unfortunately, the transition does not seem to be complete as of this writing.

Costa Rican’s laws and constitution protect private ownership of land and foreigners enjoy the same rights as citizens. There are almost no restrictions to ownership of private land, except that given or sold to Costa Rican citizens as part of government programs, which can be freely traded or acquired by foreigners only after the original owner has held it for a certain period of time. Neither citizenship, residence, nor even presence in the country is required for land ownership.

Costa Rica boasts of a safe form of title registration to protect buyers from hidden claims. It is centered in the registro de la propiedad (property registry), where both title documents and survey plats for every property are recorded. Any change in the status of a title or any claim that might affect it must also be noted on the title registry page, thus making it easy to verify.

Those who want to buy land in Costa Rica should get professional advice, which include a search of the title in the registry, so as to confirm that there are not liens on it, and to establish its proper ownership. Once the deal is completed, you should also secure documents from a lawyer to prove that the sale was registered, for your own safety and to present to somebody else.

If you would like, we can consult with you and refer you to the best real estate lawyers in the country.Knowing who to use is very important in real estate transactions in this country, and is crucial to a trouble free existence.

Stewart Title is offering title insurance in Costa Rica since 3 years ago. It is the biggest title company in North America. Stewart title is commonly used by many buyers to secure and insure clean title on all types of purchases in Costa Rica.

With most properties, owner finance is available at between 10–12% per annum. Finance can also be arranged with local banks at between 9.5 – 12%, if you are a permanent resident, otherwise, you may not be able to secure financing through banks here. 

Costa Rica Real Estate can provide its clients with access to U.S. mortgage loans as low as 7 % annual interest. For more detailed bank loan info click here.

Knowledgeable lawyers agree that zoning regulations in Costa Rica are reasonable and logical, although far less stringent than in other countries such as the United States. 

A registered local engineer must sign all building and subdivision plans and they also require approval by the local municipality, the ministry of health, and the government housing department.

The taxes paid on properties in Costa Rica are very low. Yearly property taxes vary from 0.5% to 1.5% of the declared value of the property. This declared value is a common law practice in that a property’s value according to the government is very low, almost always lower than the sales price.

Closing costs for a sale include a transfer land tax, a stamp tax, and legal fees. Closing costs typically run 5 – 6% of sales price and are usually split 50/50 between buyer and seller. The transfer and land taxes are assessed based on the declared value, while legal fees are charged based on sales price of the property.

When buying beachfront properties, one must be aware of the Costa Rican regulation that the coastline is all public. By law, the first 50 meters above the mean high tide line are inalienable public, defined by what is known as the 50 meter line. No one can restrict access or have a totally private beach. There are some exceptions, but they include port areas, old land grants, and some title prior to 1973.

On 80 – 85% of the coast, the next 150 meters are government owned lease and also known as the maritime-terrestrial zone (or just maritime zone). Restrictions on maritime zone land for foreigners are that one must establish five years residency to own more than 49% of the rights to a lease. Two loopholes include holding the lease with a corporation that is wholly owned by a foreigner, or by having a Costa Rican holding 51% of the lease in name only. Development of the maritime zone does not discriminate against foreigners. A regulation plan must exist for areas where the land is or just for the parcel itself.

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The other 15 – 20% of the coast is land that has title to the 50 meters line. That is to say that no maritime zone exists and the landowner may develop without inconvenience of filing a regulation plan.

Building costs generally range from $40 to $60 dollars a sq. foot. Average time for building permits generally ranges from 2 to 3 months time, but can take longer. Building materials and techniques are similar to that in the U.S.

The following information contains just few ideas and hints that you might want to use when purchasing real estate in Costa Rica.  Before anything elese, make sure that you are involved in the entire purchasing process understanding all the documents (translated), surveys, and procedures.  Use a reputable Notary/Attorney or Title Company.  Do not assume and ask questions.  As a result, you should have a good experience purchasing and owning real estate in Costa Rica.

Once you find the property that you want to purchase, you should reach an agreement on price and agree on where the property boundaries (survey "plano") are with the seller which can be either written or verbal.  There will be a final written document (in Spanish) called the "escritura" which is written only by a Notary/Attorney.

The Notary/Attorney can research and complete all legal functions and can write the final “escritura” that documents the transaction in the legal protocol book. 

If you are paying cash for the property, generally the buyer selects the Notary/Attorney, but this is not always the case.  Who pays for the closing costs and Notary/Attorney fees is negotiable and depends on price paid and agreement between the parties involved.  If each party selects to have their own Attorney representing them then each party would pay their own representation fees and who pays the closing costs would be negotiable.

Generally, the buyer's Attorney Researches Property Information. A thorough title search must be conducted on the property being purchased. 

All properties are registered at a the "RegistroPublico" in accordance with Costa Rican law.  Also, all documents relating to title or an interest in real property must be registered in the property section of the Public Registry. 

Properties have a title registration number referred to as the "Folio Real Number".Utilizing this number in a database search on the property, you will receive a report called the "InformeRegistral" which gives basic information about the property including owner/title holder, tax appraisal, liens, mortgages, boundary lines, recorded easements, and other records that may affect the title.  Other information to look for are encumbrances, escrituras, restrictions, and judgments.

There is other important information that should be checked as well that includes verification that property taxes have been paid and any separate services provided by the municipality (assessed separately), utilities (water, electric, telephone, cable, direct TV) have been paid. 

If there are any outstanding bills, especially on the telephone or other utilities, this MUST be paid before you close by the seller, otherwise you could end up on the hook for paying these past due bills to get service hooked up in your name.

Another document that should be included in the search is the catastro map, commonly known as the plot map (plano) or survey.  This map will define the property (size, location, boundaries).  It is important that you read the plot map and all of the notes that are included.  There may be discrepancies between the InformeRegistral and the catastro because updated transfer information in one document does not automatically require a change to the other.  Talk to your Attorney about any discrepancies which may only be due to delayed recording updates.  If your Attorney thinks otherwise, he may recommend that you obtain an independent topography survey to accurately define boundaries.  Any problems must be resolved before a final purchase.

When researching a property, it is extremely important that all property numbers and all plot map numbers referenced on any document be researched in detail as it might affect the title or possession rights of the property you are purchasing.  Also, research the adjoining properties in detail to see if they affect your land in any way especially regarding easements, legal title and legal possession.

Most experts recommend that you rent first in Costa Rica, or any foreign country, for 6 months to a year before you decide if you want to stay in the country, and if you want to buy a property here or not.

All rental terms by law are for at least 3 years, and any lease that says a term less than that is is still legally 3 years.  But the custom is many times for shorter periods, or even month to month.

Most rental contracts have an inflation clause in them, which can often be between 10-15%, especially if it is denominated in colons.  If it is denominated in US dollars, you should attempt to negotiate either no escalation, or a much lower figure.

A landlord may inspect the premises once per month, during normal business hours, or at a mutually agreeable time.  He may inspect more often in special cases.

Here is where this section of the rental law is online, although only in Spanish:

http://www.asamblea.go.cr/proyecto/15500/15586.doc