Country Guides Country Guide: Costa Rica

Date Published:

22/06/2009

Purchase Process

Locals and foreigners have the same rights and restrictions to buying property in Costa Rica.

A Maritime Zone, which is 200m along the shoreline, is state-owned. The Public Zone, which is 50m from the shore, is protected from any development. Leases cannot be granted to foreigners with less than five years of residency in Costa Rica to own a property in a Restricted Zone.

On choosing a property, it is transferred from the seller, or the developer, to the buyer by executing a transfer deed (escritura) before a Notary Public, who drafts the transfer deed and register the sale in the Public Registry (Registro Nacional). The notary is independent. You should also appoint a solicitor to represent your interests. See the Law Society website at www.lawsociety.org.uk for a list of international solicitors. After the transaction has been completed the title transfer should be registered at the Public Registry.

Purchase Costs

Based on a buying a £100,000 new property you should budget between 4-7 per cent and expect to pay the following:

Exit Costs

Good news. If capital gains are not derived from habitual transactions (ie making a business of it), they are tax exempt. Otherwise, capital gains are taxed at the standard progressive income tax rates from 10 per cent to a maximum of 25 per cent in Costa Rica.

Mortgage Status

Mortgage finance for non-residents is not easily come by in Costa Rica. You may be able to secure a 70 per cent LTV mortgage through a US bank, but it may be an arduous process. It’s probably best to raise finance in the UK and buy with effective cash.