How to Buy Real Estate in Costa Rica: A Complete Guide for Foreigners

Buying real estate in Costa Rica is an exciting opportunity for those looking to invest in a tropical paradise. With its stable economy, welcoming expat community, and breathtaking landscapes, Costa Rica is one of the top choices for foreign buyers. However, purchasing property in a foreign country requires careful planning and understanding of the local laws. This guide will walk you through the essential steps to buy real estate in Costa Rica as a foreigner.

1. Can Foreigners Buy Property in Costa Rica?

Yes! Unlike many other countries, Costa Rica allows foreigners to own property with the same rights as locals. The country’s legal system ensures secure property ownership, making it an attractive destination for investors. The only exception is the Maritime Zone Law, which restricts direct ownership of beachfront properties within the first 200 meters from the high tide line.

2. The Property Purchase Process in Costa Rica

Step 1: Choose the Right Location

Costa Rica offers diverse options, from beachfront homes in Guanacaste to jungle retreats in the Nicoya Peninsula or luxury villas in the Central Valley. Consider factors like climate, infrastructure, access to amenities, and rental potential when choosing a location.

Step 2: Hire a Real Estate Agent

A reputable real estate agent familiar with the local market is essential. Look for agents affiliated with recognized international firms or those with solid track records in the area where you’re looking to buy.

Step 3: Conduct Due Diligence

Before making an offer, it’s crucial to perform due diligence on the property. Work with a real estate attorney to verify:

• Property title and ownership records.

• Any outstanding liens or encumbrances.

• Zoning regulations and building restrictions.

• Availability of utilities like water and electricity.

Step 4: Make an Offer and Sign a Purchase Agreement

Once you’ve chosen a property, your attorney will draft a Purchase Agreement outlining the terms and conditions. A deposit (usually 10%) is required to secure the property.

Step 5: Transfer Ownership via a Notary Public

In Costa Rica, real estate transactions must be conducted by a notary public, who acts as the legal representative. The property is registered under your name or through a Costa Rican corporation (commonly used for tax and liability benefits).

3. Costs Involved in Buying Property

When buying real estate in Costa Rica, you should budget for the following costs:

• Transfer Tax: 1.5% of the property’s value.

• Notary Fees: 1%-1.5% of the transaction value.

• Legal Fees: Typically 1%-2% of the purchase price.

• Property Taxes: Costa Rica has low annual property taxes (0.25% of the registered value).

• Homeowners’ Association Fees (if applicable): Varies by community.

4. Financing Options for Foreign Buyers

Most real estate transactions in Costa Rica are cash-based, as local banks offer limited financing options for foreigners. However, buyers can explore:

• Owner Financing: Some sellers offer direct financing with flexible terms.

• International Banks or Home Equity Loans: Some buyers finance their purchase through banks in their home country.

• Private Lenders: Certain financial institutions specialize in expat financing.

5. Benefits of Buying Property in Costa Rica

• Legal Protection: Strong property rights for foreign owners.

• Residency Options: Investing $150,000+ in real estate qualifies you for a residency visa.

• Rental Income Potential: High demand for vacation rentals in prime areas.

• Stable Economy: A politically stable country with no army and strong tourism-based growth.

6. Key Takeaways for a Successful Purchase

• Work with a trusted real estate agent and lawyer.

• Always conduct due diligence before purchasing.

• Be aware of closing costs and legal fees.

• Consider setting up a Costa Rican corporation for ownership.

• Explore residency options if planning to stay long-term.

Ready to Find Your Dream Property in Costa Rica?

If you’re considering buying real estate in Costa Rica, let’s connect! As a local real estate expert with deep knowledge of the market, I can guide you through the process and help you find the perfect property. Contact me today to start your journey to owning a piece of paradise!