Costa Rica has long captured the hearts and investments of foreign buyers, thanks to our breathtaking landscapes and political stability, as well as Costa Rica real estate laws that provide robust legal protections for property ownership.
But if you’re new to this market, understanding Costa Rica’s unique real estate laws is critical. Don’t consider this a comprehensive guide – it’s not (real estate attorneys make an entire career out of these laws and regulations) – but it will serve as a great introduction to navigating the complexities of purchasing property in this paradise.
Please note that all information contained in this post is updated, as of original publication, but may change at any time, due to local legal updates.
Foreigners Have Full Property Ownership Rights in Costa Rica
Let’s start with the good news: Costa Rica real estate laws allow foreign nationals to own property outright. Whether you’re a resident or a non-resident, you have the same property ownership rights as Costa Rican citizens. That means you can legally purchase and fully own titled property – a huge draw for international investors.
However, there are two exceptions:
- You cannot own 100% of property in a Maritime Zone (explained below).
- You cannot own INDER properties, which are agricultural lands donated to farmers for development.
These exceptions aside, Costa Rica offers a welcoming legal environment for foreign investors.
Maritime Zone Law: What Every Beachfront Buyer Should Know
Thinking about owning a slice of Costa Rica’s coastline? You’re not alone. But you’ll need to navigate the Maritime Zone Law (Law 6043), one of the most important Costa Rica real estate laws here at the beach, which governs all land within 200 meters of the high tide line. Here’s the breakdown:
- Public Use Zone: The Public Zone (where new real estate cannot be built) occupies the first 50 meters (~165 feet) from ordinary high tide, as well as all areas exposed during low tide, including mangroves, estuaries, cliffs, rocky outcroppings, etc.)
- Restricted Use Zone: The restricted zone occupies the coastline from 50-200 meters inland from ordinary high tide. Municipalities are responsible for their Restricted Use Zone, which they can concession out.
Important: If you’re a foreigner and you haven’t lived in Costa Rica for at least five years, you cannot own more than 49% of a concession property. The remaining 51% must be owned by Costa Rican nationals or residents.
So, what does this mean? Essentially, after 1977, all Costa Rican oceanfront is public and land use is restricted for 200 meters / 660 feet inland from the high tide mark. And what does that mean? Bottom line: Buying oceanfront and/or beachfront real estate is possible and commonplace, but you’ll want to understand titled vs. concession property in Costa Rica and how it applies to your purchase.
Despite these restrictions, concession properties remain a popular choice, particularly for beachfront developments. Just ensure your attorney performs due diligence to verify the concession’s validity and renewal terms.
Types of Property Ownership in Costa Rica
When it comes to Costa Rica real estate laws and property purchases, foreign buyers have several ownership structures to choose from:
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Titled Property (Fee Simple Ownership)
Titled property (also known as “fee simple,” in English-language real estate parlance) means that you have absolute ownership and recognized rights of possession. Titled property holds the greatest and most ownership rights when it comes to Costa Rica real estate. Notably, titled oceanfront or beachfront property is very rare in most of Costa Rica – it’s not as rare in our area of Tamarindo-Potrero-Langosta-Flamingo – due to the Maritime Zone Law.
Pro Tip: Only 5% of Costa Rica’s beachfront property is titled, making it rare and often more expensive.
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Concession Property
Let’s start with what you really want to know: Yes, concession property is a safe purchase. (Did you know that even the illustrious Four Season at Peninsula Papagayo is concession property? True story.)
The bottom line is, 95% of oceanfront property in Costa Rica is concession property. It’s common and, for more than four decades, has been the law of the land: The regulations are well known. The kinks are worked out. Concession property can be a great purchase.
Here’s how it works: Concession property is essentially a municipal lease, most often renewable in 20-year increments. More importantly, as long as you pay your annual dues/taxes and follow land-use permissions (based on municipal rules), then your concession should be renewable ad infinitum.
Key Caveat: Foreigners can own up to 49% of concession property if held in a corporation.
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Corporation Ownership
See below!
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Trust Ownership (Fideicomiso)
For properties in restricted zones, a trust arrangement allows foreign buyers to retain beneficial ownership while a local bank holds the title.
Owning in Your Personal Name vs. Corporation Ownership
When deciding whether to purchase property in your personal name or through a corporation, there’s one key consideration that often catches buyers off guard: the logistics of closing.
If you choose to buy in your personal name, you must be physically present in Costa Rica to sign the closing documents. If you’re not able to be present, you’ll need to grant someone a power of attorney (POA) before leaving the country. Otherwise, the alternative involves traveling to the nearest Costa Rican consulate in your home country, assuming one exists, to have your signature notarized – an often tedious and time-consuming process requiring an appointment.
This is one of the main reasons many buyers opt to purchase property through a corporation. It streamlines the process, making it much easier to manage the legal requirements, even from afar.
What Does it Mean to “Own” a Corporation?
Similar to many countries, there are several types of “corporations” out there – that is, if we’re going by the dictionary, rather than legal definitions.
In Costa Rica, the word sociedad refers a company or partnership, which many people translate as “corporation.” There are several types of sociedades, from general partnerships (una Sociedad en Nombre Colectivo) and limited liability partnerships (una Sociedad en Comandita) to the more common limited liability corporations (una Sociedad de Responsabilidad Limitada) and standard corporations (una Sociedad Anónima, commonly referred to as an S.A., pronounced essay-ah).
With this in mind, there are three commonly cited reasons to own a Costa Rican corporation:
- You won’t be in Costa Rica to make your purchase and you don’t want to leave a power of attorney (POA), so your only remaining option is to purchase in a corporation;
- You plan to do business in Costa Rica and a corporation will help you legally form your business, so you can meet goals and conduct business either alone or with partners; and
- You need to separate personal assets from business assets.
Today, a corporation will not insulate you from liability. For example, if you were to cause an accident and get sued as a result, assets in a corporation are not kept separate from a lawsuit.
Additionally, for resale purposes, transferring a corporation was once considered easier than transferring property. Some expats also put their real estate into corporations for inheritance purposes. And still others opened a corporation in order to fast-track their path to bank accounts, phone/internet, and other public services. But again, that was decades ago and today, new laws have changed this once reality.
Today, the primary reason to open and own a corporation remains: you plan to own a business in Costa Rica.
Due Diligence: Safeguard Your Investment
Purchasing property in Costa Rica isn’t just about signing on the dotted line. While there are strong Costa Rica real estate laws, proper due diligence is essential to ensure a secure investment. Here’s what you (and your real estate attorney) need to do:
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Verify the Title
Use the National Registry (Registro Nacional) to confirm the property’s legal owner and check for encumbrances, liens, or disputes. Ensure that the seller is the rightful owner and has clear title to the property.
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Verify Zoning Regulations
As discussed above, Costa Rica’s zoning laws dictate how land can be used. Consult with the local municipality to confirm whether the property is zoned for residential, commercial, or agricultural use.
Tip: Request a copy of the catastro or plano catastrado, a.k.a. the cadaster plan (survey map), which outlines boundaries, zoning restrictions, and setbacks from rivers or forests.
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Get a Property Inspection
Conduct a thorough physical inspection to identify any potential issues, from structural problems to environmental concerns.
That said, know this: Home inspections in Costa Rica don’t work like you’re used to. You don’t need to throw out everything you’ve ever learned about home inspections in X country but you may have to adjust your expectations, if only a bit.
For example, there is no technical “home inspector” profession here. Instead, we typically look to civil engineers, who are well qualified to review construction and identify problems. That said, the final product is similar: A comprehensive report that provides a breakdown of any major and minor issues, if they exist.
And, lest the absence of an official Home Inspector license steer you towards uncertainty, know this: From personal experience, we can assure you that there are really excellent engineers/home inspectors out there.
Don’t Rely on Riders
Costa Rica real estate laws regarding transactions differ significantly from those in, say, the United States, particularly when it comes to the absence of riders, addendums, and disclosures that U.S. buyers might expect. Here, most property sales are considered “as-is.” (This is why a home inspection is so important!)
While this doesn’t mean you can’t negotiate repairs or specific terms, it does mean that transactions typically lack the additional layers of documentation common in U.S. real estate—like lead-based paint disclosures, environmental riders, or other addendums that often accompany contracts in most states.
So, while “back home” you might be looking at a specific maximum % that the seller would cover, here you’re looking at contract negotiation. At Blue Water Properties, our offers typically include a contingency regarding your home inspection: If the inspection turns up a serious issue, you can negotiate the repair. If the issue is more than you’re willing to handle, you can cancel your contract and get your money back.
Hire a Real Estate Attorney
In Costa Rica, real estate transactions are conducted via attorneys – and your attorney can make or break a deal, so it’s imperative to have a highly responsive attorney who has a proven track record of providing excellent service. Your real estate agent can help with this, as they’ll have an established relationship with a stellar attorney, and it’s often best to trust in this recommendation – provided you’ve hired a great, trustworthy agent – rather than try to find one on your own.
Importantly, according to Costa Rica real estate laws and practice, buyers are the ones who choose the attorney. This is your right! Take best advantage of it. An experienced legal advisor serves as your legal ally, ensuring that your decisions are well-informed and that your purchase remains secure.
Understanding Property Costs and Commissions
Costa Rica real estate laws govern most costs, as it’s essential to understand the financial aspects of the transaction.
Real Estate Commissions
The seller typically pays the real estate commission, which ranges from 5% in the Central Valley to 7% in coastal regions. Exclusive listings may incur lower commissions, depending on the marketing agreement.
Closing Costs
Closing costs in Costa Rica are divided into four main categories, mostly calculated as a percentage of the total property price. These costs are based on the higher value between the property’s contracted sales price and its registered fiscal value:
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Transfer Taxes (1.5%)
Calculated as 1.5% of the higher value between the fiscal valuation and the contract price.
Example: For a $300,000 property, transfer taxes would total $4,500.
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National Registry & Documentary Stamps
These fees include multiple elements, such as:
- National Registry Stamps (0.5%)
- Agrarian Fees (0.15%)
- Municipal Fees (0.2%)
- Minor charges like fiscal stamps and bar association fees.
Example: Approximately $2,410 for a $300,000 property.
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Legal Fees
Only a notario público (notary public, which is always an attorney in Costa Rica) can legally transfer property in Costa Rica. Legal fees are calculated on a sliding scale:
- 2% for the first ₡10 million (~$15,600).
- 1.5% for the next ₡5 million.
- 1.25% for ₡15-30 million.
- 1% for amounts over ₡30 million.
Example: Roughly $3,300 for a $300,000 property.
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VAT (13%)
A 13% value-added tax (IVA) applies to legal and escrow fees. For example, a $3,300 legal fee would incur $429 in VAT.
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Additional Costs
Escrow services, holding corporations, and due diligence may add under $500 each. While not part of official closing costs, they’re worth budgeting for.
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Annual Property Taxes
Property taxes in Costa Rica are low, at just 0.25% of the registered property value. However, luxury homes valued at over $200,000 are subject to an additional luxury tax.
Taxes and Residency: What You Need to Know
Owning property in Costa Rica doesn’t automatically grant you residency, but it can be a pathway to securing it.
Residency by Investment
Foreigners who invest at least $150,000 in real estate or other qualifying projects are eligible to apply for residency. This can provide benefits like tax breaks and simplified legal processes.
Costa Rica Real Estate Laws: Legal Protections and Dispute Resolution
Costa Rica’s legal framework provides strong protections for real estate investors. If disputes arise, you have several options:
Mediation and Arbitration
These alternative dispute resolution methods are quicker and more cost-effective than court proceedings. Many real estate contracts include arbitration clauses for this reason.
Judicial System
Costa Rica real estate laws provide a formal avenue for resolving property disputes. While the process can be lengthy, it ensures your rights are upheld.
Considering Purchasing Property and Have Questions about Costa Rica Real Estate Laws?
Buying property and moving to Costa Rica is often a journey that begins long before the plane touches down. For some, it’s years in the making. For others, it’s a decision made in a heartbeat. However your path unfolds, I’m here to support you every step of the way—from those first quiet thoughts of “Could I really do this?” to navigating the ins and outs of Costa Rica’s real estate laws and lifestyle.
Whether you’re still dreaming, just starting to explore, or already on the ground, I’m happy to answer your questions, share insights, connect you with the right people, and help you envision what life in Costa Rica could look like for you.
For me, this isn’t just about real estate—it’s about people. It’s about listening closely, understanding what matters most to you, and offering guidance that feels aligned with your goals. I don’t believe in pressure, and I don’t believe in pushing. My role is to provide clarity, to create trust, and to help you feel confident in every decision.
As a proud member of Blue Water Properties and the Costa Rica Global Association of Relators, I’m fortunate to work with some of the finest real estate opportunities in Costa Rica—from oceanview homes and investment condos to private lots and thriving businesses. But what I value most is the connection I get to build with you. Because helping you find the right fit isn’t just my job—it’s my passion.
So, whenever you’re ready, reach out. I’d love to hear your story.
