Costa Rica Real Estate - Legal Tips
It is our goal to provide our clients with the most professional and reliable legal services to help make your Costa Rica real estate investment decision as easy, quick and secure as possible.
Our team of experienced real estate agents are connected to the best legal experts in Costa Rica (law firms, notaries, legal consultants). They have a keen understanding of the real estate laws and regulations and they will help you planning your investment in Costa rica from start to finish.
You will find below some useful information and tips. Feel free to contact us if you have any question or concern about real estate laws in Costa Rica.The Lawyer`s Corner
In Costa Rica foreigners have the same rights as nationals when purchasing real estate and the constitution guarantees protection of such property ownership rights.
Purchasing real estate in Costa Rica is fairly simple, it is necessary to verify the credentials of the seller and the title to the property. An agent or a real estate office in the transaction may represent the seller. There are several internationally renowned real estate offices in Costa Rica such as Century 21, which offers a wide portfolio of beach properties located along the "Gold Coast".
Nevertheless, the buyer must be certain that the title being offered is exactly what has been bargained for. Consequently, the buyer should retain the services of a lawyer to perform a title search in the Public Registry and to recommend whether to acquire the property personally or through a legal entity. In order to perform the tile search, the lawyer requires the property number (Folio Real) and /or the name and identity number of the owner(s), whether it is a person or a company. The Public Registry mantains a very accurate database of all registered properties in the country. The title search will verified the identity of the owner`s, the property`s size, location and boundaries, the nature of use of the property, and whether the title is free and clear of any encumbrances, such as mortgage or pending legal action.
Zoning or other types of restrictions may affect the property. For example, if the property is a part of a condominium, some construction restrictions may apply. If the property is an environmentally sensitive area or includes a historical site, limitations of use may apply. The buyers' lawyer should research if any restrictions exist and consult with the corresponding local goverment agency to determinate the extent of such restrictions.
Property taxes in Costa Rica are very low when compared to the rates in North America and Europe. Before closing the sale, the buyer should request from the seller a certificate issued by the local authorities (municipality) assuring that there are no municipal and/or territorial taxes due.
Municipal taxes cover certain public services such as street lightning and garbage collection services. Territorial taxes are established by law and are determined by the size, location and value of the property, among other issues. These taxes can be paid annually, quarterly, or by semester. In addition, if the buyer plans to build an structure on the property.
The property must be acquired via a public deed (escritura publica) issued by a lawyer and Notary Public who is responsible for registering the sale in the Public Registry.
As a general rule, the Buyer selects the Notary in cash transactions. However, if the property is to be financed or mortgaged, the Seller selects the Notary.
Closing Costs are approximately 3-4% of the total purchase price. These costs include legal fees, property, transfer taxes and other common expenses.
If the buyer wants additional assurances of the title being acquired, one can purchase a title guarantee from world- renowned companies with offices in Costa Rica.
Purchasing property in Costa Rica can be a rewarding experience if you retain a reputable broker and an attorney to guide you through the purchase process.
