Why are so many Americans and Europeans searching Costa Rica Real Estate Listings for Costa Rica Real Estate for Sale, Land and Properties?

The answer to this question may vary in accordance to each specific case, nevertheless many if not all aspects that motivates your decision are basic; Costa Rica is a small country full of wonders around each corner. Costa Rica is well known for its rainforests, private reserves, volcanoes, mountains, beaches; well, you name it and we have it.

Costa Rica gives an opportunity that other countries don’t, and this is diversity of locations and properties to choose from in a moderate traveling time. There is a simple principal you should follow: “A piece of land can be compared to gold, meaning that its value will increase in time. Real estate is a worthwhile investment if all the correct legal steps are taken in consideration.”

Land Ownership
Any foreigner can own land in Costa Rica. You are not required to be a resident to purchase property. You can also purchase land through a corporate name. You may constitute a Costa Rican company (Sociedad Anonima (Anonymous Corporation (or Sociedad de Responsalidad Limitada (Limited Liability Corporation)) to record the property in a corporate name. The benefits of constituting a corporation to hold your Costa Rican assets are numerous.

Our laws and constitution are based on Democracy and freedom, protecting the basic rights for the private ownership of land. Such laws are of equal conditions to any foreigner as per to any resident or citizen.
 
Sales and Purchase Agreement (SPA)
In most cases you will need time to organize your portfolio or funds in order to purchase the land you have fallen in love with. What can you do to tie the property or take it off the market? A SPA can be signed between the Seller and the Buyer; this agreement will serve as a legal instrument that will bind you to buy and bind the Seller to sell, as per all terms and obligations will be drafted set forth before closing. A guarantee deposit of good faith is customary to render upon signature, there is no percentage stipulated by law nevertheless it is recommended a percentage not exceeding 10%, yet it will depend on each particular negotiation.

National Registry (property recording entity)
Costa Rica has one or perhaps the best recording procedure for land ownership of Central America; almost all the land in Costa Rica is duly recorded. This gives security when you plan to purchase a property. In almost all cases you can track down the origin of the property starting from the “mother property or property of orgin”. Such documents are public and are easily found by microfilmed and recorded documents. Any movement or transaction regarding the property is duly annotated on time upon its presentation; property movements are updated every day, facilitating the detection of any anomaly.

Those who wish to purchase property in Costa Rica should seek legal counsel and/or professional advice. A real state attorney and Notary Public is the person who will draft all closing documents or “escritura de traspaso”. The Notary Public is the professional in charge to search the title (measurements, boundaries, location and current owner) in the National Registry, to confirm if there are any existing liens or encumbrances, annotations, restrictions or easements, and to establish its proper ownership. Once the closing has been done, the Notary Public will be solely responsible to pay all transfer taxes and stamps on behalf of its client or purchaser and file the “escritura de traspaso” or deed for recording in due time.

Municipal or Property Taxes
Property taxes in Costa Rica are based on the declared value of the property. The Costa Rican Revenue Department or Tributacion Directa as per the corresponding Municipality has a recorded value of the land lower than the purchase price in some cases, if not all.
 
Closing Costs
Closing costs for a purchase include: a) land transfer tax, b) stamp tax or “timbres de traspaso”, (a and b total around 2.5% aprox.) c) and attorney fees (1.25%). Transfer & stamp taxes as per legal fees are calculated upon the real purchase value.
 
Can a foreign investor obtain financing?
In many cases, Banks or Financial Institutions in Costa Rica may finance a percentage of the sale price. Being a legal resident may facilitate financing with local Banks. Nevertheless each case in particular will be studied by the corresponding applicant entity.
 

Title Guarantee
You can obtain title guarantee through a US Title company, STEWART TITLE. The cost for title guarantee is 1% of the sales price. There are Attorneys-Notary Publics who are authorized representatives and members of Star System, Stewart Title that could handle all legal closing documents as per all title guarantee documents at the same time in Costa Rica. Title guarantee is optional in Costa Rica.
 
 
Beachfront Regulations
In Costa Rica the corresponding municipalities have the obligation to administrate beachfronts. With out a doubt these properties are the most desirable of all. Beach front properties are located in what is known as the maritime zone; a 200 meter strip starting from high tide, divided into a 50 meter strip closest to the shore known as the public zone and the remaining 150 meters that can be applied for concession in the corresponding Municipality.

If you plan to purchase beach front property, you need to take into consideration certain aspects. The first is to understand that these properties are given a concession for certain periods of time, renewable in most cases. This does not reflect true title, but a permit to manage and administrate such property. Because of this, you need to keep in mind that in some areas there are regulatory plans or special zoning; meaning that you have to make sure that the property you are applying for concession has been designated or granted the specific zoning you are looking for. If there is no regulatory plan you will have to proceed with patience and hiring professionals to complete this procedure is highly recommended. With adequate organization and a professional working group you can accomplish your goal to obtain a concession land or beach front property in due time.

*The above stated information is a brief introduction to some of the relevant aspects to consider upon the purchase of a property in Costa Rica. If you have further questions please feel free to contact the author: LIC. GONZALO VIQUEZ JR. at gonvicar@racsa.co.cr or costaricanlegaladvice@gmail.com Phone 506-816-1681.
NOTARY PUBLIC, ATTORNEY AT LAW & AUTHORIZED REPRESENTATIVE FOR STEWART TITLE, VIQUEZ OREAMUNO & ASSOCIATE

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