Costa Rica Real Estate Laws

Once you’ve made the decision to buy property in Costa Rica and you’ve negotiated a sales price and the offer is accepted, you will need to start the legal process and the procedures to transfer title ownership.

Title Transfer
The transferring of property title from the seller to the buyer is done by something called an Escritura, which is a property transfer deed. This is done before a Notary Public, which in Costa Rica has powers to act on behalf of the state. He or she is an Attorney and is capable of interpreting legal documents as well as certifying the authenticity of documents.

Upon closing of the property, the parties involved must choose a Notary that will draft the deed. Once this is done, the sale must be registered in the Public Registry (Registro Nacional), which is the centralized property registration office where all documents and deeds executed in Costa Rica are registered.

A piece of property can be purchased in an individual’s name, with another person, or by a corporation name. Most people choose to register the property in the name of a corporation, but the decision should depend on one’s particular situation. You should always consult your attorney.

It is always necessary to follow up with your attorney to make sure that the transfer deed has been presented and registered properly in the Public Registry. They must make sure that all taxes and stamps are paid for the title to be registered.

Clear Title
The law in Costa Rica indicates that property title must be registered in the Public Registry under the Property Section. You can search for a property by the Folio Real number which is the Titled registration number, or by name. Information such as name of the title holder, tax appraisal, recorded easements, mortgages, liens, boundary lines, and other technicalities related to the Title. Anyone in the public can search the Public Registry, but it is always a good idea to have your own lawyer do a title search to investigate the property and any make sure there are no encumbrances left uncovered.

Costa Rica Real Estate Financial Info
Closing Costs Closing costs include Government transfer taxes, registration fees, Notary Legal fee, and mortgage costs.  Usually, the buyer and seller share these costs 50/50, although other arrangements can be negotiated.

Transfer Tax
A transfer tax equal to about 2.44% of the property’s real value is collected by the government. This covers the cost of the stamps included below. A transfer deed will not be registered in the Public registry until the transfer taxes and documentary stamps are paid.

Documentary Stamps
Stamps must be affixed to the deed before it can be registered.

Notary Fees
Mandated by law, the notary or attorney who created the contract and conducted the closing receives a fee which can vary from 1%-1.5% of the purchase price depending on the amount of the same.

Mortgages
Buyers can find Costa Rica financing services through a few different sources such as Stewart Mortgage Brokerage (of Stewart Title), Costa Rica Mortgage company, and Chicago Title. The person who is receiving the mortgage services pays this fee and is usually part of the closing procedure. Coldwell Banker has a very strong network in Costa Rica that will facilitate the process to obtain financing for purchasers of real estate under the current financial conditions.

Beachfront Property
There exists a special beachfront property law in Costa Rica, which is called the Maritime Zone law designed to protect the first 200 meters of beachfront property. Starting at the high tide marker, the government controls possession of the first 50 meters which are known as the public zone. The remaining 150 meters can be leased by an individual or corporate entity from the government in what is known as a concession. When considering the purchase of beachfront property, one must always be aware that there are certain restrictions for foreign ownership under the Maritime Law, so a careful examination of the property is critical. Also, note that it is only possible to get a concession in the maritime zone if the area where the property of interest is located has an already existing and approved zoning plan issued by the corresponding municipality and ratified by the Costa Rican institute of tourism.