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Q&A – Buying Property in Costa Rica

Buying property in Costa Rica can have its challenges, but when you know the answers to your questions, and have a qualified realtor and attorney, it can be a relatively smooth and stress-free process. For the most part, the process is easier and faster than purchasing a home in most other parts of the world.

Buying Property in Costa Rica Questions

Can Foreigners own Property in Costa Rica?
Yes. Foreigners in Costa Rica can own property in their own names with the same rights as residents and citizens.  It is part of what makes purchasing property here so popular. Most properties we have for sale are owned in a corporation for liability purposes.  Beach front is a little different. For titled Costa Rica beachfront property (available in less than 10% of the country), foreigners can own property outright/fee simple. The only time special rules apply for foreigners is if they are purchasing concession property in Maritime Zones.

How much are property taxes?
Property taxes in Costa Rica are pretty low – only .25% of the registered property value, and they are reassessed every 5 years.  We have a client who forgot to pay his taxes for over year, and went all worried about the fines, and late fees – but his bill was still only $14.00USD! Yes, that’s fourteen dollars, no typo. Granted, he only has a little casita for a single couple on his large lot, but its in a gated community with a gorgeous river through his property! Go the complete polar opposite and you get a luxury tax – a handful of very large and luxurious properties are subject to this Tax but honestly, we have nothing for sale that would fall into that category. But just as an fyi, it’s based on a calculation that includes, but is not limited to, structure size and finishes, like imported tiling from around the globe and thousand dollar gold plate faucets. Our attorney would arrange for a luxury tax assessment if you owned a very large condo or home that was subject to it, and if you already own a home like this, we are happy to help you with the assessment, but presently we are not selling inventory in this range.

Is Paradise Management part of the Costa Rican MLS?
No.  Because currently, there is no nationally sanctioned Multiple Listing Service, and although there are a few listing ‘services’, nothing is complete or sanctioned by a governing agency. For the best deals in the local markets, find a good agent that will show you their own listings, as well as other agency’s listings if they need to broaden their search to help you find the right property.
UPDATE:  WE CREATED AN MLS!  In an effort to better help our buyers and sellers, we have created mlsincostarica.com where real estate professionals, agencies, brokers and even FSBO can list their homes for sale all over the country.  MLSinCostaRica.com !!!

How do I know if a property is titled?  Is there Title Insurance in Costa Rica?
All property in Costa Rica should be registered in the Public Registry, or the Registro as it is known here in Costa Rica. This includes Concessioned and Titled properties as well (beach). While we have stringent listing requirements at Paradise Management (now Blue Tierra Realty Group), and do a preliminary check of all our properties within the Registro, your attorney will be able to confirm the title chain and see if there are any restrictions, encumbrances or liens since the time of our initial listing.  Title Insurance is not presently supported by the government, because our Registry is so advanced.  So avoiding the purchase of unregistered property is strongly advised, and we will not take part in listings of that nature.

If there is no Title Insurance in Costa Rica, how do I know my property is clean and clear?
First, as mentioned above, we have an extremely dedicated and efficient Registry system for all properties in Costa Rica.  An attorney’s job at closing is to make sure the property is transferred and registered correctly to the new owner.  An attorney typically goes back about 10 years into a property’s history.  If you want your investment to be more concrete, you can purchase something called a “Non-Insured Title Statement”.

What is a Non-Insured Title Statement?
Pretty much exactly what it says.  This is through a company called Secure Title in Costa Rica – the same company that holds escrow for our clients.  What they do is a complete history of the property going back to when it was first registered.  They review all the roads, easements, water sources, etc. on the property AS IF they were going to insure it.  But since the CR government does not support or regulate Title Insurance, there is no way to issue the Title Search – so its just a search.  But this will tell you everything you might want to know about a property.  For a typical house sale we would not recommend it.  But if you are purchasing a hotel, large property with a varied ownership history, or planning on investing over a million dollars into a property, we would suggest doing this extended background check.

How much are closing costs?
Compared to several countries where closing costs can be astronomical, here in Costa Rica you will find they are quite low. And they are usually split between the buyer and the seller.  The same attorney is normally used by both parties – again saving on costs and time.  The attorney is required to make sure the property is legally able to be sold (doing the search we spoke of above, going back at least 10 years),  and they register the sale and taxes, etc.  They do not work for the buyer or seller, they work to make the deal correct, registered, and filed.  A good realtor will help with other transfers like utilities, and the negotiation process.

Here is a great calculator tool for your closing costs:


A rough guide of additional fees:

Escrow fees would apply if you use a third-party escrow.  An additional cost for the writing of the Option to Buy – this is the document that lays out the deal and all the legal info holding the buyer and seller together until due diligence is performed and the closing documents are prepared and signed.

Do I need my own attorney?
Not necessarily. The closings here are straightforward, and only a small percentage of closings use more than one attorney. Some folks choose to use an attorney from their home country to review the documents – but they know nothing of the laws here and what is needed.  Also, they cannot register the sale and the Documents need to be in Spanish. Really, the attorney who is going to aid you best is one from Costa Rica, who knows how to handle a real estate closing here with all the details required by the national laws here.  Our Agents attend every closing, to double check everyone’s work, and aid you in the process as well.  All our attorneys are bilingual and offer you the contracts in English as well as Spanish.

Can I borrow money from a Costa Rican bank?
Not easily, and not cheaply, and only if you are a resident or a citizen. Interest rates are high and reading through the requirements (in Spanish) could make you dizzy. Some homeowners offer owner financing for select buyers with great credentials, and this option is growing in the expat markets due to the lack of funding here. Most folks, however, finance their purchase through a mortgage or line of credit on their primary residence in their home country- and use the cash to purchase here.

What about squatters rights?
While Costa Rica does have laws to protect locals who have lived and cared for a property for many years, it is not typical in the more developed areas of the country. Even so, if you plan on leaving your property for long periods of time, we suggest you hire a management team, such as ourselves, to check on it from time to time and take action if necessary.  Many folks are happy hiring a local caretaker to check on it – but sometimes the language barrier can be difficult if you or they do not speak Spanish, and sometimes it is hard to know who to trust.

So you like Paradise Management/Blue Tierra Realty, but you saw some properties on other websites you want to see?  Or can’t quite find what your looking for?
Let us represent you, and lets go see those other properties! We work with all legitimate agencies and agents. We will watch out for your interests and  help you find your own slice of Paradise. And if you dare looking for something specific, let us know – things can come and go quickly and sometimes we know of properties that are not even listed.  If we know what you are searching for, you can be the first to know when we find it! Pura vida!