Costa Rica is the number one retirement destination in the world this year. It is also one of the few countries around the world that does not restrict the foreign ownership of property. As such it should be no surprise that thousands of expats own retirement or investment property in Costa Rica.
So, if you want to own your piece of Costa Rica then your first consideration is not to leave your common sense at home. The key to all successful real estate transactions in Costa Rica is to have your own real estate attorney representing solely your interests and conducting due diligence on the property you want to purchase.
Once you have agreed with the seller on the terms and price of the property then you need to put it all in writing in the form of a real estate purchase agreement. This contract should be as detailed as possible since it will guide the transaction from start to finish so do not leave anything open for interpretation.
To protect your deposit make sure it’s held by a third-party escrow instead of delivered directly to the seller. That way it is easier to recover your deposit if something goes wrong.
On the date of the real estate closing, you will gather at the office of the notary public. In Costa Rica the notary must also be a licensed attorney and they serve as the recording agent/title company for the government recording office. Generally, at closing, the funds are exchanged, and the transfer deed is signed simultaneously, and then recorded in the property section of the national registry recording office. There is one centralized recording office located in San José where all the deeds from the country are centralized.
As a buyer you can title your property in your personal name, jointly with your spouse, or in the name of a corporation. There are no restrictions to foreign ownership other than limited exceptions for land located in the maritime zone.
The closing costs in Costa Rica are set by law and involve government transfer taxes, recording fees, and the fee of the notary public that is handling the transaction. The total costs are around 3.5% of the value of the transaction.
Financing your purchase in Costa Rica can be tricky. Local banks will generally require that you have residence status before lending funds for property purchases. The typical bank mortgage loans are in the 9% range and terms up to 30 years. Owner financing is very popular where the seller will finance a portion of the sales price to the new buyer. Those looking for investment properties can use their Individual Retirement Account to invest in Costa Rica real estate.
Once your title is recorded in the national recording office you can purchase title certifications or a certified survey map for your property at any time, directly on their website. You will need to inform your local government office (municipality) of any title change so that they can update their title information for you as well.
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