Frequently Asked Questions

Common Questions from Buyers

Costa Rica allows foreigners to buy, sell and own titled property using only their passport. One of the biggest advantages to buying in Costa Rica is that they’ve implemented many policies that help foreigners invest here. The biggest detractor for most expats are the typical difficulties of buying in Central America – lawyers can be unresponsive, bureaucracies do not function efficiently and procedures can be archaic.
But with expert guidance and experienced legal counsel, expats from all over the world can enjoy fee simple ownership of titled property here. The exception to this rule is any property located within 250 meters of the high tide line, called the maritime zone.
The vast majority of property within that radius is non-titled and only available through a lease, or concession, that must be renewed every 20 years. The arrangement rightfully scares many people away from the absolute beachfront, though a concession owner mainly needs to pay their assessed taxes and keep their paperwork up to date to ensure they can continue to lease the land. There are a few titled properties within that area, that are extremely expensive because of their privileged legal status.

Click to watch Matt’s recent video discussing whether or not buyers should incorporate to purchase property.

Generally speaking, Costa Rica is a cash market for real estate. There really isn’t any bank financing for foreigners available locally and US/Canadian banks will not lend toward the purchase of a foreign property. Occasionally there are owner financing options. The typical expectation is 50% down with a rate in between the U.S. and C.R. and a term of two years. With that said. 99.9% of buyers buy with cash and when they need financing they take a loan against an IRA, pension plan, annuity, stock portfolio, equity loan against an existing property, etc.

Click to watch Matt’s video on this topic.

Step-by-step procedure for closing on a property in Costa Rica:
  1. The offer: After we determine all of the details of your offer, you submit your offer as a signed option to purchase contract (OTP) with the full terms & conditions for the sale, including the names of the attorney responsible and escrow service, timelines for the deposit and closing, etc. If the sellers counter-sign to accept, we move to step #3.

  2. Negotiations: Most often, “verbal” negotiations follow step #1, as the sellers either counter, reject or accept the offer. Once negotiations have made the acceptable terms clear, we finalize your last formal offer, you re-sign and the sellers can accept by counter-signing.

  3. Offer accepted: we contact the attorney that you have selected to handle the transaction – it’s your right to choose as the buyer and only one attorney submits a transfer deed to the national registry. The seller can have additional legal help at their own expense. We also contact the escrow service agent (when applicable)

  4. Deposit/1st deadline: The escrow agent will send you the necessary forms for them to legally and transparently handle your funds. They are simple but you must first present all the information before the escrow agent sends you the details for the first deposit. From the date the contract is signed by both parties, you usually set a 5-10 business day timeline to make escrow. Sending your wire confirmation number to the agent by the deadline is enough. The deposit amount is most often 10% but this is variable. Costa Rica’s laws demand a higher level of scrutiny for international financial transactions than you might see elsewhere,

  5. Due diligence: The deposit remains refundable during the due diligence period, which typically is set for 15-20 days. Costa Rica’s national property registry – accessible to anyone – makes the information very easy to access. I work with a contractor named Doug Stern, whom I wholeheartedly recommend for any kind of inspection. He will always do a thorough inspection, but whereas most contractors charge a ton and then send a huge report of meaningless pictures and details, Doug will give you a condensed report with recommendations and follow up with a phone call to talk about his findings.

  6. Regarding repairs/inspection resolution: You can add clauses insisting on certain repairs, and we can add any conditions you would like. But most offers do not include a concession by the seller that they’ll fix anything that an inspector might find. In Costa Rica you are largely buying in “as is condition” and a seller is only expected to make minor, obvious repairs in most cases.

  7. Approval of due diligence: Once your lawyer has given the green light and you feel comfortable with any inspections, you approve due diligence, the deposit becomes non-refundable and we are working towards a closing as soon as convenient for all parties.

  8. Closing: 80-90% of closings happen between 6-10 weeks from the OTP signing date, and we can define the length of time in your offer. Even the best attorneys here, the ones that are truly trustworthy and diligent about their work, have a far different response time than foreign buyers can expect. The CR national ministries also can create all manner of delay. Luckily it sounds like a longer timeline in the OTP is what would be best for everyone involved.

Click here to watch the first of Matt’s four videos on the purchase process.

Here’s a quick overview of the costs you can typically expect to pay as a buyer in Costa Rica. These are all subject to negotiation, and there are different approaches:

  • 2% of the closing price for legal/notary fees, transfer taxes and stamps – the total of these costs for a typical real estate transaction is around 4% of the total price, and it’s customary for buyers and sellers to split these costs 50/50.

  • 0.125% of the closing price for half of the escrow fee, with a $300 minimum on your side – the total fee for the service is 0.25% of the closing price with a floor of $600, so you have to pay 50% of either 0.25% or $600

  • ~$1,000 to establish your new corporation and also register it for taxes, a service which the legal firm will provide in one fell swoop

  • ~$500-1,000 miscellaneous legal costs – just to set a realistic expectation, there are always a few little costs that come up (you may need to do a power of attorney or have the lawyer create an extra legal document for your side of the transaction)

So, as an example, let’s say you buy a $100,000 property; here is an overview of what you would pay with the standard contract of splitting all closing costs with the sellers:
  • $2,000 for your share of legal/notary fees, transfer taxes and stamps

  • $300 for your half of the escrow; they would charge the $600 minimum in this case since 0.25% of $100k total purchase would only be $250

  • $1,000 for your corporation

  • $500-1,000 for misc. legal fees

  • =$3,900-4,400 total closing costs as buyer of $100k property, again, if you split the closing costs

Click to watch Matt’s informational video on Closing Costs and Commissions.

Annual property taxes, charged by the municipality, are between 0.25-.55% of your property’s declared value, typically updated at the time of title transfer. If you establish a corporation to hold your property (a common practice here), you’ll also have to pay an annual tax of about $200. If you buy a property along a public road where waste management services are offered, you will automatically be charged about $30 per quarter, as an additional tax. You will be able to see whether this tax applies to any property during a due diligence period.

This chart shows the current

Property Valuation Amount (in Costa Rican Colones)

Percentage applicable

Over ¢133.000.000,00 and up to ¢335.000.000,00


Over ¢335.000.000,00 and up to ¢672.000.000,00


Over ¢672.000.000,00 and up to ¢,00


Over ¢,00 and up to ¢1.345.000.000,00


Over ¢1.345.000.000,00 and up to ¢1.679.000.000,00


Over ¢1.679.000.000,00 and up to ¢,00


Over ¢,00



HOA fees can be charged monthly or annually and typically cover pool and garden/landscaping maintenance, private road upkeep, security, and exterior building maintenance.

Click to watch Matt’s video on Gated Communities in Costa Rica. 

The maritime zone, known here as the ZMT – Zona Maritima Terrestre, is composed of two sections. The first 50 meters from the median tide line is the Public zone. This is an inalienable zone where anyone in the public has free access for it’s use. No constructions can be built here, ever. However, many put non-permanent and make shift palm frond roofed structures (small ones) or landscape this area as a part of their garden. The second area is the one that interests you most…the next 150 meters, which is the area where you primarily find concession ownership. Titled, beachfront property exists but is in short supply and extremely high demand. Expect beachfront realty prices to reflect this dynamic.
A concession is a lease to use government property that can be renewed over and over again. The leases can be between 12-20 years; when you renew it’s a simple process for which you have your lawyer present the right documents. That can cost ~$1,000 and you essentially have to prove you’ve paid your taxes and not violated the concession (by building an enormous hotel for example).
This is commonly known as lease-hold throughout the world and a good example would be the coastlines of Mexico.
Foreigners can’t technically hold the concessions. Foreigners work around this by holding the concession in the name of a corporation where a Costa Rican citizen is 51% shareholder. This adds to the complexity of foreigners purchasing concession property as they need a trusted family member or friend to be the primary owner while contracts can be put in place to avoid any improper action (i.e. sale) by the majority shareholder.


Click to watch Matt’s video explaining beachfront real estate in Costa Rica.

Tico Times article about Title vs Concession property.


If you live close to a town, your water will typically be managed by a local association called the ASADA. This organization is responsible for the maintenance of a community well and all pipes, the treatment and storage of procured water, and the distribution to paying subscribers. Water prices are set by the government.

Click this link to watch Matt’s video about water distribution and costs.

Common Questions from Sellers

The Costa Rican government passed new laws for capital gains tax in 2019 and all properties acquired after this date are subject to the 15% tax on the next sale. Sale prices are part of nationally registered data on all properties, and the old practice of under-reporting your property value to avoid taxes is both illegal and no longer used by attorneys.  However, some properties acquired before the July 1st 2019 date are registered with extremely low values so the government created a caveat allowing these owners a one-time adjustment tax of 2.25% on the “gain.” 

Click here to watch Matt’s video on the Capital Gains Tax.

Here is an overview of the costs you can expect to pay to sell your property here in Costa Rica:
  • 6% of the closing price for the total commission, split between brokers and referring agents or whoever is involved.
  • 0.78% of the closing price for tax on the commission; agents are obligated to collect this and pay it to the government
  • 2% of the closing price for a 50% share of closing costs and escrow fee – these costs, including the public notary fees, transfer taxes and stamps, total 4% and are usually split evenly between the buyer and seller but that can be flexible
  • 2.25 or 15% total closing price for capital gains tax – You will have to pay either 15% of the net gain between the price at which you registered your previous purchase vs. this sale, or you can pay 2.25% of the property’s total value at the time of the sale if that amount is lower. Most important is to see at what price your property is currently registered and what the difference would be.
To list your property you will need to provide us with:

  • Plano Catastrado (cadastral plot map of property)
  • Full name of your corporation
  • Your corporate I.D. number (3-101-XXXXX or 3-102-XXXXXX)
  • Name of President of the corp. as written on passport and passport number or cedula de residencia
  • Contact information of the lawyer you use in Costa Rica
The following will be needed for sale:
  • Property manager company name and contact information
  • Annual property tax base and copy of property tax bill paid to date
  • Year built and/or purchased
  • Water letter from local water providing authority
  • Utility contract numbers and copies from the most recent billing cycle
  • HOA dues statement showing fees paid to date (if applicable).
  • Copy of the ‘planilla’ of the Caja for any workers you may have

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