Frequently Asked Questions about Real Estate in Costa Rica
Is it safe to own Costa Rica Property?
First, rest assured that foreign citizens have the same equal rights under the laws of Costa Rica to buy and own property the same as a Costa Rican citizen does. Property can be purchased in your personal name or in the name of a Costa Rica corporation that you represent. If you choose to go he route of a Costa Rica corporation, this corporation can also be owned by a foreign corporation or LLC- limited liability company.
How do I know if the property is legal?
All legal property in Costa Rica is registered in the National Public Registry of Properties, this include condos, homes, lots, farms and ocean front .A Legally registered property will be identified by its Folio Real number, a number that corresponds to the specific property and a Plano Catastro number, this is the register property survey.
Who Holds the money?
By the laws of Costa Rica any funds being wired into the country over $10,000.00 has to go thru a legally registered “SUGEF” escrow agency. SUGEF is the Spanish Acronym for General Superintendence of Financial Entities; this is basically the Governmental Banking and Financial Regulatory Department of Costa Rica. This ensures that your money is protected while your property is in the due diligence stage of an offer contract. Your funds are fully protected by the laws. We at Tres Amigos Realty have worked with and know the best escrow service Companies to utilize.
Is there licensing for Costa Rica Agents?
Yes and NO. Yes there is licensing in Costa Rica for real estate agents, which all Tres Amigos real estate agents are required to achieve, but not all local agents choose to be licensed. The professional real estate agents in Costa Rica formed their own board over a decade ago; Costa Rica Global Associations of Realtors a government recognized professional organization that encourages everyone in the industry to join. All agents joining this association are required to take mandatory classes and continuing education classes. These classes are based upon the same requirements as NAR (National Association of Realtors) but geared towards the laws of Costa Rica and members must adhere to the highest standards of ethical practices.
To learn more about real estate agent licensing please read our page: Are real estate agents in Costa Rica licensed?
Is Title Insurance available?
The simple answer is no, but do not let that scare you. Title Insurance was available in Costa Rica for quite a while through well-known international companies such as Fidelity Title. Because of the National registry system a good attorney will investigate the property all the way back to the original ownership even if the ownership has been transferred fifty times and any problems would be discovered during this search. The title Insurance companies closed shop in Costa Rica because attorneys are doing exactly the same thing they offered, without the extra expense.
What are property taxes like?
Property taxes In Costa Rica are the same throughout the entire country and are very low. Municipal property taxes are only ¼ of 1% of the registered property value. For example a property with a registered valued of $200,000 pays $500 per year in property tax.
Can I own Beachfront Property?
Again the answer is a YES and a NO. Beach front property, known as concession land, is actually owned by the local municipality. This land is reserved for citizens of Costa Rica and foreigners that can prove five years of legally living in Costa Rica. You do not own the land but own a concession that grants you the rights to use the land for a twenty year period. Then the concession needs to be renewed. However there are some condo developments that are right on the beach and they are structured with a Costa Rica corporation with preferred and non-preferred shares. The preferred shares are for the owners of individual units. So yes you can own beach front property.
Can I get a Mortgage in Costa Rica?
Most Banks and private institutions do not give mortgages to foreigners for home purchases. Some do but the requirements are not easy to meet by the average buyer. However there is an option it called Owner Financing. What this consist of is a seller will to take a down payment, usually 30% of the agreed upon price and will carry a mortgage for a period of between 3-7 years. The interest rate could be anywhere from 4% to 7%. At the end of the agreed upon term a balloon payment is made and the property is free and clear. All time frames and percentages are a estimation and each deal can be different. Contact one of our experienced agents to learn more.
Do I have to be a resident to Live in Costa Rica?
Legally speaking yes you do have to be a resident to live in Costa Rica. If you plan to live in Costa Rica full time, meaning more than 90 days at any one given time, then you should be a legal resident. Citizens from most countries around the world do not need a special visa to enter Costa Rica, just a valid passport. The passport is basically the visa and is good for 90 days in country. Many people that own homes and live here part time for cold norther winter months will leave Costa Rica just before their 90 days are up travel to another country for a short vacation then return. Their passport will be stamped again upon entering and will have another 90 days to stay in Costa Rica.
What are closing costs?
Closing costs In Costa Rica are set by the government and are based on percentages of the value of the property being transferred. A good number to use when estimating what your closing cost will be is 4% of the cost or the registered value whichever is higher. Here is a short breakdown of the fees. 1) To legally transfer a property you will need a notary/ attorney to do so. In Costa Rica to be a notary you have to be a licensed attorney first. Notary fees will be from 1 to 1.25% of the either the registered value of the property or the sale price whichever is higher. 2) Real estate transfer tax is a tax paid directly to the Costa Rica Government and is 1.6%of the registered value or the agreed upon sale price, again whichever one is higher. 3) Documentary stamps are basically a tax and will be 1% of the registered value or the agreed upon sale price, whichever one is higher.
Do I have to have an attorney?
As a buyer yes you have to have an attorney represent you. The attorney will do the due diligence on the property to ensure that it is free and clear of all liens, mortgages, encumbrances and so on. The attorney will also be responsible for writing the deed and registering the property in the national property registry system under you name of corporation.
Can I own the property in my own name?
Yes you can own the property in your own name however if you do not plan on living here full time is better and safer to own the property through a Costa Rica Corporation. They are neither expensive nor hard to set up. The attorney you chose to represent you can handle all of this. For more information, you can find a full list of our highly experienced agents by navigating to the ABOUT US >> MEET OUR AGENTS page on this website and they will be happy to explain this in detail.
Are properties expensive?
Prices are relative to each buyer, each market any budget. We at Tres Amigos Realty have the ability to help you find the perfect property that fits your needs and budget; whether an ocean view lot to build your dream home for as low as $50,000 and up to a luxury mansion on a ridge top with expansive ocean view in the million dollar range. We have the inventory to assist every buyer’s needs. From studio apartments to three bedroom condos, to large tracks of land to development parcels you name it. If we do not have it in our inventory then we will do the work and we will find it. We work with every real estate company in the area and beyond.
Are there Home Owners Fees?
Yes and no, all depends if the property is in an established development or not. Some developments have lots of amenities that are shared amongst all owners and some do not. Most developments in the area have general common costs, as in road maintenance, security, common green space that needs cutting and landscaped, some have common area pools and so on. Home owner’s association fees can run as low $80.00 per month, which when considered is not that bad. It all depends on the service and amenities offered. If you decided to purchase a property that was no in a established development then there are no home owners fees.