Costa Rica Real Estate Law & Regulations

As mentioned on previous articles, Costa Rica is currently having a real estate boom and foreign businessmen and tourists from all over the world are flocking in this country to find gold on real estate.

Costa Rica Real Estate Law & Regulations: What you should know

Surely, you would like to join the bandwagon. However, before you do so – make sure that you are aware of the real estate regulations implemented in Costa Rica. Here are some things that you should know:

 • Land Ownership:

The land ownership by both local and foreign citizens in Costa Rica is protected by the country’s constitution and laws. Anyone regardless of race can gain ownership of a private land provided that there are no restrictions imposed on such. Restrictions will be made if that particular land must be acquired by the government for its programs. These particular lands may be sold to Costa Ricans and may not be acquired by foreigners until a certain time period has lapsed. Foreigners need not be citizens or residents of Costa Rica before they can purchase their own land.

 • Title Registration

Costa Rica’s Registro de la Propiedad or Property Registry has an extensive record of land titles and surveys of virtually every property in the country. This means that you are almost 100 percent assured that you are buying a legitimate property once it is present in the database. The requirements have been outlined on the previous article in order to guide you in purchasing your preferred property. It is easy to verify the legality of the property upon consultation with the registry. After a deal has been reached between you and the owner, a notarized agreement should be made in order to avoid duplicate purchase.

• Financing Options

An increasing demand for property acquisition due to the emergence of real estate boom made it almost impossible to avail of local financing options for acquiring a property in Costa Rica. This may be attributed to the growing population and several other factors such as high demand and competitive prices.

Zoning laws

The zoning laws and Costa Rica regulations are properly implemented. A local engineer (properly registered and licensed) is required to sign all subdivision and building plans prior to the review of the local municipal government, Housing Department and Ministry of Health.

• Real Estate Licenses

The Chamber of Real Estate Brokers usually recommends the real estate licenses and submits these for approval to the Ministry of Economy. In this way, there is a guarantee that the standards and regulations were properly met.

• Property Taxes

The property taxes imposed in Costa Rica is noticeably low compared to other countries. The rate ranges from half a percent to one and a half percent of the declared property value.

• Processing costs upon close of sale

After the deal has been made between you (the buyer) and the owner (seller), certain fees needs to be paid afterwards. These are: legal fees, stamp and transfer land tax. The price usually ranges between five and six percent of the sales price. Both the buyer and the seller usually divides the settlement of these fees.

• Law on Costa Rican currency (colón)

In terms of purchasing a property, you can now set up a purchase contract detailing the actual amount of the preferred land in dollars. This was not implemented before since it had to be in Costa Rican currency or in colónes. This will avoid confusion especially on times that the local currency will fluctuate against the dollar. With the currency in U.S. dollars, there’s no need to worry about that. The mortgages may possibly be written in U.S. dollars in the future.

• Beachfront property laws

There are existing regulations concerning purchasing beachfront properties located within the coastlines of Costa Rica. The government has implemented the fifty-meter limit. This means that fifty meters starting from the high tide line could not to be bought or acquired. Aside from that, no entity can acquire a beachfront property that will totally restrict access for others to use the beach in front of it. There are exceptions which you may refer with your lawyer.

The government has jurisdiction for over eighty percent of the coast – which is now labeled “maritime terrestrial zone.” Foreigners may need to be a resident of the country for five years to gain opportunity in leasing a percentage of the properties. It will be decided by the government in the end.