Buying a Property in Costa Rica Legal Guide for Foreign Investors

VOA LAW – Lic. Gonzalo Víquez

Introduction

Costa Rica offers a secure and attractive legal framework for real estate investment. Foreign investors enjoy the same ownership rights as Costa Rican citizens, supported by a transparent National Registry system. Understanding the legal process, ownership structures, tax obligations, and compliance requirements is essential to ensure a secure investment.

Foreign Ownership Rights

Foreign individuals and entities can legally own property in Costa Rica. Most properties are held under fee simple title and registered before the National Registry. Restrictions apply only within certain Maritime Zone areas (beachfront concession property).

The Legal Purchase Process

A properly structured transaction includes legal due diligence, execution of a purchase agreement, use of escrow services, closing before a Costa Rican Notary Public, and registration of the property transfer. Post-closing steps include updating tax records, utilities, and corporate compliance if applicable.

Ownership Structures

Property can be owned personally or through a Costa Rican corporation such as an S.A. or S.R.L. Corporate ownership provides advantages including asset protection, estate planning flexibility, and simplified ownership transfers.

Closing Costs and Taxes

Closing costs typically range between 3% and 4% of the purchase price. These include transfer tax (1.5%), registration and stamp fees (approximately 0.8%–1%), and notary fees (approximately 1%). Property owners must also pay annual property tax of 0.25% of the registered value.

Residency Through Investment

Foreign investors may qualify for Costa Rican residency under the Investor Residency category by investing at least USD $150,000 in qualifying assets such as real estate.

Maritime Zone Regulations

Beachfront properties within 200 meters of the high tide line are regulated under concession law. The first 50 meters are public land, and the next 150 meters are concession areas.

Due Diligence and Risk Management

Legal due diligence verifies title validity, zoning compliance, environmental conditions, and condominium regulations. This process protects investors and reduces risk.

Remote Closings

Property purchases can be completed remotely through escrow services and Special Power of Attorney, allowing foreign investors to close transactions without being physically present.

About VOA LAW

VOA LAW provides full legal support for foreign real estate investors, including due diligence, closing coordination, corporate structuring, and compliance management.