Foreigners
are permitted to own property outright in Costa Rica. Foreigners have the same
property rights as Costa Ricans. Private property is protected by the
Constitution of Costa Rica. It is no different than owning real estate in the
US or Europe. Costa Rica is definitely a beautiful country to live, invest
and retire.
There are no restrictions that specifically apply to foreigners when purchasing property in Costa Rica. A Costa Rican partner is not required to buy land in Costa Rica Procedures to buy a Costa Rica property 1. After you have found the right property with your Real Estate Agent, have them submit an Offer to Purchase (also known as a Letter of Intent) to the Seller or the Seller’s listing agent in order to agree upon the sales price and basic terms of the deal. 2. Once the Offer is accepted, you take it to your Costa Rica attorney and they draft the formal Sale and Purchase Agreement. This document is a legally binding document, and it clearly states all conditions necessary for the transfer of the deed. 3. The period of Due Diligence, which is the complete legal research of the property to insure there are no liens, contingencies, legal issues, and that it has absolute fee simple title. Surveys, soil tests, home inspections, and other studies requiring professional services are included in this period. If the property is being sold with an existing company, then the research of the company for any legal contingencies will also be completed during Due Diligence. 4. The Closing (conveyance of the deed) occurs before a Costa Rican Notary Public, who will register the property under the new company or owner. Alternatively, if the property is being purchased with an existing company, then the shares of the company are transferred at this time by a Shares Transfer Agreement. In this case the Notary Public will make the corresponding changes to the company’s ownership in the National Registry. 5. Declaring the property before the corresponding Municipality for property tax purposes by filling out a simple form and presenting it along with the some other documents either yourself or through your attorney. Foreigners and locals can acquire a property under their personal name , however, it is more common and recommended to acquire the property through a corporation in order to separate potential personal liabilities, facilitate the closing procedure, and allow for easier transfer to relatives in case of casualty. The Costa Rica holding company will also make it easier to obtain services such as electricity and cell phones, as well as, opening a bank account. Although recommended, there is no need to be present to sign for the transfer of the deed at closing. The closing can be executed through a Power of Attorney with a third party in Costa Rica that you trust. This Power of Attorney can be specifically for the sole purchase and signing the closing document. Another option is to DHL or FedEx the documents after signing them in front of a licensed Notary Public at your nearest Costa Rica Consulate. Considering the cost of the shipping and the distance to the nearest Costa Rica Consulate, many buyers fly down and sign in person. Taxes, legal fees, and closing expenses Transfer Tax: This is a national tax of 1.5% of the purchase price that is paid (by your lawyer) to the National Registry. Legal Fees: for the purchase of property in Costa Rica are 1% to 2% depending on the sales price, complexity of the transaction, and the allotted time spent by the attorney on the deal. Additional legal costs may include the formation of a Costa Rica corporation of around $600 USD; drafting of any supplementary contracts or Seller Financing Agreements and registering of such contracts; and translation of contracts into your native language. The Buyer and Seller typically pat for the separate attorneys. |