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If you are ready to take tangible steps towards purchasing property in Costa Rica, then you need to have a basic understanding of the rules, norms, procedures and laws that can govern the situation. As is the case with any property purchase, a mistake can be costly, but if you make sure to handle every necessary detail, purchasing property in Costa Rica can be nothing but a positive and exciting experience.
Below are some of the basics you’ll need to understand as you move towards living in paradise:
One of the first questions that’s commonly asked regarding purchasing property in Costa Rica is whether or not foreign buyers have the same sorts of rights that native Costa Ricans enjoy. The answer is that yes, they do, which is one of the reasons that purchasing property in Costa Rica is growing in popularity.
After you’ve decided on a property, you need to work down a list of requirements to make sure that you avoid any unnecessary problems. The first issue you need to clarify is land use. Land use laws earmark certain properties for certain types of uses and prevent that property from being used for other reasons. You can work with an attorney to make sure that all regulations are being complied with, as both the municipal government and the Costa Rican government and their agencies may have use designations in place, but they can be found by exploring the proper channels.
Secondly, you need to decide on price. Although it’s not a regulation, it is common practice in Costa Rica to negotiate heavily on price, so feel free to make an offer you think is fair. After you’ve agreed on a price, you need to get your documentation in order. This documentation includes:
- Identification: This includes proof of residency, a passport or the proper incorporation papers if you’re buying the land as a business.
- Municipal Clearance Form: The municipality issues this document that states that the property is free of any encumbrances or other debts.
- Plan of Survey: This document lays out the exact plat of land.
- Public Registry: Almost 100% of all property in Costa Rica is registered with the government, and you need to be sure that your land is properly recorded.
When all the required documentation is in place, a document known as an ‘escritura’ is executed, and this is basically the equivalent of a transfer deed. Payment terms are also a relevant consideration, and the majority of property purchases in Costa Rica are paid in cash. However, there are financing options, many of which include a 50% down payment and the rest being financed. However, you do have options to finance, but the buyer in Costa Rica must pay the fees associated with the mortgage draft.
Finally, closing costs must be handled, and the Costa Rican government requires a 1.5% Impuesto de traspaso, or transfer tax to be paid. The percentage is based on the value of the property. There are other closing costs, and generally, these are split between the buyer and seller. You’ll need to be clear on the documentation as to who is responsible for which payments to avoid unforeseen assessments against the property in the future.
Basically, purchasing property in Costa Rica requires the following of several steps, but if you follow them and employ the help of qualified professionals, this should not be a stressful process. | |
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