A complete legal guide for foreigners purchasing property in Costa Rica. Learn the requirements, key steps, and how Momentum Real State CR simplifies the process.
1. Introduction: Safe and Transparent Investment
Costa Rica is renowned for its political stability, natural beauty, and—perhaps most importantly for you as a foreign investor—its legal framework that protects private investment.
Unlike in some other countries, Costa Rican law guarantees that foreigners have exactly the same rights as nationals to acquire and register real estate.
However, the legal process, terminology, and the need for proper due diligence can raise questions.
At Momentum Real State CR, our goal is to demystify this process. This guide will provide you with the Legal ABC to ensure your purchase is smooth, secure, and free of surprises.
Your dream of investing in a property in Limón, San José, or Heredia is just a few legal steps away.
2. The Fundamental Legal Requirement: Equality of Rights
The foundation of real estate investment for foreigners in Costa Rica is equality before the law.
- No Residency Required: You do not need to be a resident, hold a special visa, or even have previously visited the country to purchase and register property in your name.
- Single Required Document: Your valid passport is the only essential identification document needed to complete the purchase.
While you can buy property as an individual, the most recommended practice—for tax and asset management purposes—is to do so through a Costa Rican legal entity.
The Recommended Route: Buying Through a Corporation
Most foreign investors choose to establish either a Limited Liability Company (S.R.L.) or a Corporation (S.A.).
Key Benefits:
- Easier Transfer: Selling the property in the future is simpler—you only transfer the company’s shares, not the property deed.
- Estate Planning: Facilitates inheritance and intergenerational asset transfer.
- Limited Liability: Protects your personal assets from potential liabilities related to the property.
3. Key Steps in the Purchase Process
The process is carried out under the supervision of a Public Notary, who has the authority to draft the public deed and register the property at the National Registry.
Step 1: Offer, Acceptance, and Promise of Sale
- The price and conditions are negotiated. Once accepted, an Option to Purchase-Sale Agreement or Promise of Sale is signed.
- Earnest Money Deposit: A deposit (usually 10% of the price) is required and held in an Escrow Account managed by a notary or trusted agent (your attorney or Momentum’s legal team).
Step 2: Due Diligence
This is the most critical step, and where Momentum Real State CR’s legal team is essential.
- Title Study: The notary reviews the National Registry (Folio Real) to confirm:
- The seller is the legitimate owner.
- The property is free of liens or encumbrances (mortgages, seizures).
- Exact boundaries and measurements of the property.
- Land Use: Ensures that the municipal zoning aligns with your investment purpose (residential, commercial, or tourism).
- Utilities and Taxes: Confirms that public services are current and there are no outstanding municipal tax debts.
Step 3: Closing and Transfer of Title
- Once due diligence is satisfactory, the Transfer Deed is signed before the notary.
- Funds are released from the escrow account to the seller.
- The notary submits the deed to the National Registry, which officially legalizes the transfer.
4. Closing Costs and Tax Procedures
It is crucial for the foreign investor to budget for standard and mandatory closing costs in Costa Rica.
| Item | Approximate Percentage | Paid by |
|---|---|---|
| Transfer Tax (Government) | 1.5% of sale price | Buyer |
| Fiscal Stamps & Registration | ~0.5% of sale price | Buyer |
| Public Notary Fees | Negotiable, usually 1.25% – 2% | Shared between Buyer & Seller |
Estimated Total Cost: Closing costs generally range between 3.5% and 5% of the sale price, depending on the notary and transaction complexity.
Post-Purchase Tax Considerations
- Property Tax: A small annual municipal tax (typically 0.25% of the registered property value).
- Corporate Tax: If purchased through a corporation, an annual Legal Entities Tax must be paid.
5. Your Trusted Partner in Costa Rica: Momentum
Although regulated, the purchasing process requires guidance from local experts. Momentum Real State CR offers:
- Bilingual Advisory: A team that understands the needs and expectations of international investors.
- Trusted Network: Direct connections with notaries and attorneys specialized in real estate law to ensure rigorous due diligence.
- Verified Portfolio: We only offer properties with clean titles and proven investment potential—whether serviced lots in the Central Valley or rental properties along the coast.
Don’t let legal uncertainty hold back your investment!
🔑 Contact a Momentum advisor today for a free consultation about the purchase process and to discover properties that have already passed our strict legal review.