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Real Estate Laws in Costa Rica
Owning land
Foreigners have a constitutional right to own land in Costa Rica. The only restrictions on private land ownership is property that was sold or given to citizens as part of a governmental program. If the owner of this type of property has held it for a specific period of time, the land can then be acquired by foreigners.
Registering land
Title registration is required in Costa Rica to protect buyers from previous claims on the property they are buying. The title is held by the national property registry. Both land surveys and property titles are held at the registry. Changes in title status including property liens are recorded in the registry records.
It is highly recommended that you obtain the services of qualified professionals before buying property in Costa Rica. This individual will do a title search and make sure that there are no previous claims to the property. After finalizing the sale, you should also receive documents from your attorney that allow you to prove the sale was officially registered. This can be used at a later date if you decide to sell your property.
Title insurance
Title insurance may be backed by Stewart Title, the largest title company in the United States. This title service can ensure a more secure title, as well as clear ownership for all types of real estate purchases.
Real estate financing
Local banks often provide financing for 8.5 - 12%. Owner financing may also be available for 10-12% annually. It is also possible to use an equity loan on your home in the states to finance a purchase in Costa Rica.
Zoning regulations
Costa Rica's zoning regulations are not as stringent as they are in Canada or the United States. Subdivision and building plans must all be registered by a local engineer. Government housing authorities and the ministry of health also must approve changes.
Property taxes
Costa Rican property taxes are considered very low. Property taxes can run between .5 to 1.5% on the stated value of the property. A property's land value is usually low and often lower than the actual market value.
Real estate closing costs
Closing costs will generally be 5-6% of the sales price. Legal fees, transfer tax and stamp tax are included in the closing costs. The amount of the taxes is determined on the declared property value. The cost of legal fees charged depends upon the property sales tax.
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