Costa Rica Country Guide from channel4.com/4Homes

The most stable country in Central America, Costa Rica’s cabana charms and low taxation regime are luring second-home escapees in their droves.
By Laura Henderson

1. The Market
2. More on the Market
3. Buyer's Guide

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The Market

The Costa Rican expression “pure life” or pura vida is not just for visitors. A country that continues to live by its peace-loving philosophy, wherever you go, you’re likely to buy in to the what-will-be blueprint. Modernising fast, the country’s character retains distinct local cultures, from the Afro-Caribbean beach haunts of Cahuita and Puerto Viejo, to the traditional Latino values embodied by the sabaneros (cowboys) of the northern Guanacaste province.

Bordered by Nicaragua and Panama, the tiny republic has sidestepped the political and economic turmoil that has characterised much of Latin America, the last rumblings of conflict stamped out in 1948 and replaced by a stable democracy with a strong growth economy.

Thanks to a decades-old policy of offering tax incentives and other perks to attract English-speaking retirees, the country has also pioneered a popular economic development tool for emerging Caribbean basin markets like Panama and Belize; the drip-feed of a high-spending empty-nester class looking for a casita under the palms. “Overseas residents number around 200,000,” confirms Richard Bexon of Costa Rican Holiday. “Most are from the States, but UK investor interest has also picked up, many buying ahead of retirement, so they can ease themselves gently into the sunshine lifestyle. Infrastructure and communications in urban areas are excellent and the cost of living is minimal - £600 a month comfortably covering your outgoings.”

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Retirees contribute significantly to the £800m a year in direct spending by overseas visitors - the multiplier effect in terms of salaries in health care, construction, retail and other services bolstering both public and private sector growth. The grey market wave is moreover synergistic: early pensionados having invested in second careers; running start-up businesses and B&B establishments, now attracting more of the same.

Montezuma Beach

Resident status is secured in a number of ways - the two most common “entry” channels as a pensionado or a rentista (a foreign property owner): “Neither pay taxes on money earned outside of Costa Rica,” adds Bexon, “although retirees need an income stream of at least £300 a month from a qualified pension scheme or retirement account, £500 in the case of rentistas.”