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Costa Rica Real Estate Information
Costa Rica
real estate has the potential to fulfill the dreams of many and so far has
proved to attract people from all over the world to a land of peace and natural
beauty. The warm weather, majestic mountain ranges, serene beaches, political
stability and the value of land have lured people all over Costa Rica.
Clearly, real estate transactions are at a peak compared to previous years. The
sustained growth of title transactions is making the economy stronger.
Since you are on this site, you are probably interested in the real estate
market in Costa Rica and are considering investing in property here.
However, before you do, you should know that successfully acquiring property in
Costa Rica and most foreign countries can be tricky at the best of times. You
may find language barriers, different laws from your home country and people who
might want to take advantage of you and your money. It is always wise to get
help from a respected real estate agency like Karen Real Estate which can
provide guidance, security, advice and above all, a professional service.
This article's objective is to provide guidance regarding real estate
transactions in Costa Rica to help you get through this process successfully and
hopefully make your experience a rewarding one. Pay attention to the following
tips:
1. Costa Rica ranks fourth in the world for foreign investments. Because there
are very few restrictions to foreigners owning land in Costa Rica, they enjoy
the same rights as citizens and do not require any special conditions to
purchase property here. The Constitution of gives the right to all to own
property in Costa Rica. Foreign nationals have the same rights as Citizens.
According to Costa Rican legislation, corporations, in any of their varieties,
can be completely owned or controlled by foreign entities or individuals. There
is no need for Costa Rica citizens to be members of the Board of Directors or
shareholders.
It is important to remember that if you are out of the country for an extended
period of time, you must protect your property in order to avoid problems with
squatters. To be on the safe side, you should not leave your property unattended
for more than 6 months. This is especially true for agricultural and rural land.
Remember, SQUATTERS HAVE RIGHTS HERE.
2. Even though Costa Rican law requires at least 2 persons to create a
corporation, it allows for one or all of the shareholders to transfer or sell
all of the shares (100%) to one individual or company. This means that even
though a corporation can not be created with just one person, after it has been
recorded and created, it can exist with only one shareholder.
3. Every property, house, building, etc, is subject to a property tax. The
municipal government is in charge of collecting the tax which amounts to 0.25%
of the property's value.
4. All Costa Rican properties are registered at the Registro de La Propiedad
(Property Registry) which keeps track of all title registrations. You can verify
the status of a title or claim associated with the property thru their webpage:
www.registronacional.go.cr if you know the Folio Real Number which is included
in the cadastre map of the property.If there are no legal problems with a property, acquiring clear title is fairly
simple process. The Title Registry system is fully computerized and one of the
most highly developed in Latin America.
5. Building and subdivision plans must be:
A. Signed by a registered local engineer.
B. Approved by the Health Department.
c. Approved by the Instituto de Vivienda y Urbanismo (INVU) (Housing and Urban
Development Department)
6. Costa Rica beaches can not be privately owned. The first 50 meters (164 ft.)
above the mean high tide line is public territory. No one can restrict access to
a beach or claim a beach is privately owned, exceptions being landholdings in
port areas, old land grants or by some agreement made prior to 1973. Along 80%
to 85% of the coastline, the 150 meters (492 ft.) after the first 50 meters (164
ft.) are called the Maritime Zone and are controlled by the government. A
foreigner must establish five years of residency to own more than 49% of a lease
in this zone. Take a careful look at the zoning laws before you start
development in any of these areas.
7. Property transfers require the buyer and seller to execute a public deed
before a Costa Rican Public Notary (whose concept is different than the one in
many other countries such as the US, Canada or the United Kingdom and is
required to formalize all transactions dealing with real estate.
8. In addition to the performance of a title search, when the property is owned
by a corporate entity, it is essential to perform a corporate search at the
Commercial Section of the public register. since only this step will allow to
verify that the entity transferring the property is in good standing as well as
that the proposed signatory of the transfer deed has sufficient authority to do
so.
9.Financing a property in Costa Rica is not quite as simple as in North America.
Although some developers are offering good financing, most purchases by
foreigners are still paid in cash. Certain Banks are offering up to 80%
financing, but usually require you be a legal resident to facilitate the
transaction.
10. Look out for people on the street selling properties like like taxi drivers
etc. They basically know someone who knows the owner or they just know the
property and they claim they can sell it. Most of the time these people can get
you in trouble and are not reliable. They will fight over their commission with
the owner claiming that you are their client even though they might have just
showed the property once but never followed up with you, helped you in the
process or given any legal or sales advice.
When buying Real Estate in Costa Rica, there should be a few things that you
should bear in mind.
Make sure you are getting advice from a competent person in the business. The
industry here in Costa Rica is not as regulated as in North America or the
Cayman Islands, so anyone can claim to be a "real estate agent".
These tips do not encompass everything you should know before buying real estate
in Costa Rica. If you need further assistance on the market here, please contact
us.