Country Guides Country Guide: Costa Rica

Date Published:

22/06/2009

Does Costa Rica offer any chance of a future profit?

Costa Rica prides itself on its financial attractiveness and has a raft of incentives and inducements to maintain its appeal to foreign investment. Its government’s financial prudence and clever positioning has seen the economy grow, despite relatively high inflation (by Western standards), led by eco-friendly, ethical, high yield investments in timber commodities in locations where land has been zoned for development.

Investment Potential: Capital Appreciation

Capital gains of 100 per cent and more in the last decade would indicate there’s not much profit left in the local market – but that doesn’t appear to be the case. Improving infrastructure, better communications – particularly from North America – and fiscal stability look likely to see house prices continue to grow, driven by demand, albeit in single figures for the next year or two.

Investment Potential: Rental Yield

Gross rental yields of 6-8 per cent are reported by GlobalPropertyGuide.com in the cities preferred by expatriate residents in the province of San Jose, Alajuela and Heredia. The coastal provinces of Guanacaste and Puntarenas have the highest square metre prices in the country. Tax breaks are good too. Levied at progressive rates, from 10 per cent to 25 per cent, the first CRC2,599,000 (US$4,561) income is not taxed in Costa Rica. Holiday lettings website: http://holidaylettings.co.uk/ has a condo in Guanacaste that sleeps five, priced from £390 per week.