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The Law

For most people looking to purchase property in a foreign country the first and foremost question to answer is “Can I as a foreigner own land in Costa Rica?” One of the great aspects of property ownership for foreigners in Costa Rica, and perhaps one of the most important of the mitigating factors for the attractiveness of Costa Rica, is the security of land ownership.

Foreigners’ rights of land ownership are documented in the constitution of Costa Rica. The rights of a foreigner to land ownership are equal to that of a Costa Rican.

The National Registry

All legally transferable properties in Costa Rica are recorded in the National Registry. If the property can not be found in the national registry then it is not a legally registered property. The National Registry can be accessed via the Internet. Anyone with a computer and an Internet connection can enter the public registry and review details regarding property ownership, fiscal value, size, boundaries, and any registered liens, encumbrances (gravamines) or annotations. You can quickly find out whether there is cause for concern over the title to a property.

Title Insurance

The security of land ownership and the transparency of the National Registry are further acknowledged by the fact that three US based title insurance companies operate offices in Costa Rica and offer guarantees on title. The cost varies from 0.4% to 1.0% depending on the property and the package of services be utilized by the Title Company.

Costa Rican Companies

Most purchasers of Costa Rican property take title of their property in the name of a Costa Rican S.A. (Sociedad Anonimo) that they have created with the sole purpose of owning the property. There are a few advantages to this structuring, the primary advantage presently available is when one goes to re-sell the property you are selling a company and not a property and as such you avoid some significant taxes and government fees. The cost of a company ranges from $350 to $750 depending on the lawyer used to set up the company.

Property Types

The Maritime Zone - Understanding Concession Property

Concession property in Costa Rica is essentially all of the beachfront property. It is owned by the government and is governed by the Maritime Zone Law and other regulations imposed by municipalities and the Costa Rican Institute of Tourism. A concession is defined as the right to use a property located in the maritime zone for a pre-determined period of time, typically 20 years. The first 200 meters measured horizontally from the median tide line defines the boundary of the maritime zone.

The first 50 meters from the median tide line is considered public area and is not available for any type of ownership. Because this area is public, all people have the right to use it. Basically, there are no privately owned beaches in Costa Rica.

The next 150 meters is available for concessions to be granted. A concession is essentially a lease on the property with a 20 year concession period. The concession owner may build on the concession only what is permitted as per the zoning plan. All Maritime Zone property will be governed by a “Plano Regulador”, a Zoning Plan. New 20 year concession terms are granted so long as the Zoning Plan and all of its requirements have been observed.

Unlike fee simple property, foreigners cannot be majority owners of a concession property. However, if a foreigner wishes to have a concession property this is easily and legally done through the establishment of a Costa Rican S.A. and the appropriate structuring of the on paper ownership of shares of the company.

Understanding Fee Simple Ownership

Purchasing ‘non-concession’ property in Costa Rica is basically the same as buying property in the U.S., i.e., it is considered fee simple ownership. Fee simple ownership conveys the absolute right to own the property, and or sell the property, lease it, improve it, etc. Fee simple also means that if the owner is obstructed from his or her rights to the property, he or she has the right to be made whole, meaning to have the property restored in its original condition. Fee simple title owners enjoy the most rights under the law to use the property at their discretion.

Understanding Properties in Condominium

In the U.S., condominiums refer to residences in multi-tenant buildings. In Costa Rica, the Condominium Law benefits developers responsible for building many types of properties, including single-family homes, finished lot projects and condos. The law allows developers to regulate the development with By-Laws that can be registered in the National Registry to the individual lot, home or condo. The By-Laws outline the restrictions and benefits placed on individuals who purchase these properties and as well possibly the property itself. This is still fee simple ownership, but properties ‘in condominium’ come with additional restrictions that are generally intended to protect the integrity of the development’s physical ambiance. If you are considering purchasing a property that is “En Condominium” read the by-laws before you buy or have a professional do so for you.

Steps to Purchasing Property in Costa Rica

Reputable Realtor

The first thing that you should consider is who you should work with to help assist you in finding and purchasing your property in Costa Rica. Like any other investment you make involving a significant sum of your money the first thing you would do is look to get the advice and assistance from an experienced professional in the chosen field with a proven track record. You look for an expert that you can trust to give you accurate information, as well as all the information, so that you can make informed decisions. You should not approach purchasing property in Costa Rica in any other way. Get the results you want, work with proven professionals.

As we have been serving the local community since 1992, and having worked to assist more buyers in more transactions than any other broker in our area, we feel Century 21 At The Beach has the expertise to assist you. Not only that, we have developed a strong reputation as buyers brokers. We are here to protect your interests.

Be aware that there is no licensing of realtors in Costa Rica. Anyone and almost everyone is a “realtor” in some way shape or form down here. This is where misinformation, as well as bad information or advice can cause serious problems to a purchaser. As you would anywhere else, work with the best. Work with an experienced professional.

Search in the National Registry

Most Costa Rica properties are registered in the National Registry with their own Folio Real (registration number) in a centralized database at the offices of the Public Registry in San Josť. The Folio Real is a unique number to each property for identification. A title search in the National Registry with the property’s Folio Real should be performed for any property under consideration. A search will show you the property area, ownership, boundaries, location, mortgages, liens, encumbrances and any annotation. Some properties are not listed in the National Registry yet. These properties would be “possesorial” properties that are not yet registered. Proving ownership of or acquiring ownership of a “possessorial” property will be more difficult. It is best to avoid these properties if possible.

Escritura de Traspaso (Transfer of Deed)

The Escritura de Traspaso contains all important information regarding the real estate transfer, including information about the buyer and seller, the property and any terms of sale, including contingencies, easements or financing. A Public Notary (attorney) prepares this document and records it at the Public Registry of Property and in his/her Notary Book (Protocolo). After the deed is signed at the closing, the attorney immediately records the deed at the Public Registry for annotation, which protects the property against any third parties. Secondly, the property is recorded under the name of the new owner.

Catastro Map (Survey Plan) for the Cadastral Office

The Cadastral Office holds all Costa Rica property surveys, and it operates separately from the Public Registry. Every property must show a survey recorded at the Public Registry for successful ownership transfer. Because the Cadastral Office often has outdated surveys on file, we recommend obtaining a new independent survey plan and registering it with the Cadastral Office before purchasing the property to eliminate potential disputes about property boundary lines at closing time.

Purchasing Options in Costa Rica

Purchasing a Property Through Direct Transfer

This process occurs when and individual or group of people acquire a property in their personal name(s).

Purchasing a Property Through a Corporation

It is common practice to purchase property in Costa Rica through a newly formed corporation or by changing the ownership of an existing corporation. Establishing a corporation in Costa Rica is not complicated, but does require the advice of an experienced real estate agent and attorney who are knowledgeable about Costa Rica incorporation protocols. The advantage of buying property through a corporation is that it protects the buyer’s identity so that the real estate asset is anonymous. The benefits of incorporation as well as the additional obligations, including annual tax declarations and other corporate responsibilities can be explained by your real estate professional.

Costa Rica Residency

If a family or individual plans to live in Costa Rica, or spend lots of time there, they will need to establish legal residency. Most financially successful Americans will seek residency as a rentista (a foreigner who has a guaranteed income) or as an investor. If you wish to simply enjoy your property as a vacation property you should seek advice as to whether you need legal residency status in Costa Rica.

Rentista status has three requirements:

  • The individual must have outside investments that guarantee $1,000 income per month for five years
  • The individual must change at least $1,000 a month into colones
  • The individual must live in Costa Rica for at least six months out of the year

Mortgage Financing

Mortgages are available to foreign buyers of property in Costa Rica. Not all banks offer mortgages to non-residents but a few do. The process is somewhat more cumbersome than that of the US. Additionally the cost of initially setting up a mortgage is high here in Costa Rica as are the annual rates if interest. Please contact one of our professional real estate agents to discuss current costs and rates. Costa Rican banks offer financing, but will only finance a portion of the appraised value of the property.

United States banks will not carry a mortgage on a property outside of the States.

The Closing Process


The most common means of getting the initial deposit and the balance of the money into Costa Rica to purchase a property in Costa Rica is by wire transfer. Typically, the Buyer through the advice of their real estate professional will use the services of an Escrow Agent and Escrow Account.

Options for Signing the Transfer Deed

There are three standard procedures for closing on a property being purchased in Costa Rica.

1. Buyer and Seller are Physically Present

The most common procedure for closing on a property is that both the Buyer and Seller are in the country and have decided on an agreeable location to meet and close. Typically, the Buyers lawyer will have prepared the transfer deed and it will have been reviewed by the Sellers lawyer. The deed will be read to and explained to the Buyer in their language of choice. Both Buyer and Seller will sign the deed. The Buyer will make payment via a “manager’s check” which is similar to a certified check. The notary will then register the new deed in the National Registry.

2. Limited Power of Attorney

If one or both the Buyer and Seller can not be in Costa Rica but have given a Power of Attorney to someone to legally represent them, then the same process noted above would take.

3. Out of Costa Rica

Though not a very common practice it is possible to close on a Costa Rican property outside of Costa Rica. If either the Buyer or Seller is unable to be in Costa Rica to close, and have not left a Power of Attorney, they can have a Costa Rican notary come to where they are and sign the transfer deed in the notary’s protocol book in the presence of the notary. The cost to have the notary perform this service is born 100% by the party that requires this service.

Closing Costs

As briefly mentioned above the closing costs to purchase a property in Costa Rica varies depending if you are purchasing a property by way of purchasing a Costa Rican S.A. with the property as an asset of the company, or a straight transfer of ownership from the Seller to the Buyer as an individual.

Standard closing cost for the transfer of ownership from the Seller to the Buyer as an individual will be 4.2% of the actual purchase price of the property. This fee is a combination of legal and notary service fees, as well as land transfer taxes and government stamp fees.

The cost to close on a property that is held by Costa Rican S.A. with the property being the asset of the corporation is 1.5%. This is the legal fee to change the “junta directive” (the board) of the company and the ownership of the shares of the company and to register these changes in the national Registry.