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Costa Rica Frequently Asked Questions
This Costa Rica FAQ is meant to answer common Costa Rica questions to give you a good background about Costa Rica real estate:
Costa Rica Property Rights:
- Foreigners have the same rights for owning real estate in Costa Rica as nationals except in the case of concession land (government lease land). A Costa Rican has to be on the board of directors for concession land in Costa Rica.
- Concession land is only found in some maritime areas that were not properly registered in the 1970s. Everything else is titled, fee simple land.
- Costa Rica Properties can be held in the name of individuals or corporations.
- It is often advisable to purchase properties in the name of corporations which can be purchased through an attorney.
- Sociedades Anonimas (SA's) are the equivalent of C-corporations.
- Sociedades Responsibilidad Limitadas (SRL's) are the equivalent of S-corporations.
- Both allow for the division of shares and a potential way of creating partnerships.
- The base property tax is .25% of the registered value annually.
- There is a luxury tax that is only applicable to high end residences. It is based on the cost to rebuild the home/condo in terms of materials. In practical terms, it applies to very large, recently constructed Costa Rica properties. You can ask if the luxury tax applies to a home you are considering purchasing.
- There is only one insurance provider in Costa Rica at this time, the Instituto Nacional de Seguros (INS).
- Residential insurance can run between $500 and $1500 annually for fire, earthquake, flood, etc. damage.
- Theft is a separate policy.
- Liability is a separate policy.
- Most deals start with an offer signed by the buyer.
- If accepted by the seller, a deposit is put down in escrow with a title company or attorney and due diligence starts.
- The attorney will study the title and also the corporation if that is to be sold as well and make a determination if they deal should proceed.
- If the green light is given, the buyer will proceed to wire the balance and the closing set.
- At the closing, the buyer and seller or attorneys with powers of attorney will sign off and complete the transaction.
- Residency is not necessary to own property.
- You do not need a visa to arrive in Costa Rica and will be granted a 90 day tourist visa upon arrival.
- A simple way to get residency is called rentista, wherein you establish that you are able to live off of your own means:
- You need to submit a criminal background check and birth certificate.
- You need to establish that you have $2500/month in outside support that can be converted into colones.
- You can also get a visa through marriage to a Costa Rican.
- Investor and business owner status exist in theory but are not generally granted.
- The currency of Costa Rica is the Colon, although prices on all large items including real estate are really in US dollars.
- There are national banks: Banco Nacional, Banco de Costa Rica, Banco Popular, etc.
- There are also many private banks: Citibank, Scotiabank, BAC San Jose, HSBC, etc.
- Most banks will allow you to keep funds in Dollars, Colones, or Euros.
- Wiring between accounts within a bank is typically free.
- Wiring to accounts in other banks is generally very cheap: $1-$2.
- You can pay most bills online via transfer or a direct interface with the service provider: utilities, insurance, credit cards, etc.
