Menu

Free 200+ Page eBook

Top 57 Places to Live & Invest in the Tropics

Quickly find out which country is right for you.
No-hype updates & resource guides. No Spam. Ever.
Limited offer. Instant Download.

Join More than 58,187 people who are breaking free


we value your privacy

Hot Real Estate Offer

Costa Rica Primary: Everything You Need to Know About Property Laws

You may have noticed that a lot of our recent articles and eBooks laud Costa Rica as a great place to invest or buy a home. Our biggest reasons for that include the country’s incredible natural surroundings, unsurpassed beauty, and unmatched quality of life.

However, there’s another, more practical reason we recommend it as a place you should consider for buying or investing in property.

Costa Rica has the most favorable property ownership laws in all of Central America. It also ranks 6th (behind the likes of Chile, Uruguay, and Brazil) out of Central and South America combined.

Buying and owning property overseas, as a foreigner, can certainly present its own set of challenges. However, in Costa Rica those hurdles are pleasantly lower. Here’s the lowdown on what you need to know before you buy Costa Rica real estate.   

All Costa Rica Real Estate Falls into One of Six Categories

To help narrow your focus when considering Costa Rica real estate, it’s important to know that every piece of property falls into one of these six categories, some much more common than others. Understanding the pros and cons of each type can help simplify your decision-making process when the time comes.

nosara-costa-rica-real-estate-04

 

1. Fee Simple Property

This type of property ownership is the one that North Americans are most familiar with, as it mimics what happens when you buy a piece of property in the U.S. With fee simple ownership, the buyer owns the property and has every right to use, sell, lease, improve, and enjoy the property, subject only to Costa Rican law.

Buyers who purchase fee simple property have the most rights, according to the law, to enjoy their property and use it however they see fit. And foreigners have exactly the same rights as Costa Rican nationals.

2. Concession Property

These classifications, set forth by the Maritime Zone Law, apply specifically to beachfront property in Costa Rica or, more specifically, the first 200 meters measured horizontally from the high tide line. Foreigners cannot purchase concession property as easily as fee simple.

In fact, they’re only permitted to hold a 49% share in a corporation with a native Costa Rican. That is, unless they’ve lived in Costa Rica for five years, in which case they are permitted to be a majority owner. Here’s how that 200 meters breaks down.

  • Public Area – The first 50 meters is considered a public area and, consequently, cannot be owned by anyone, including locals. Development is permitted only by approval. However, anything that’s built can be accessed by any individual who wishes to use it for enjoyment.
  • Restricted/Concession Area – The next 150 meters, after the public area, is available for concession (which essentially works like a lease). Both foreigners and locals can purchase Maritime Zone property through a concession, which allows them to use it for a specified length of time (usually 20 years). They can build or alter the property, but only after obtaining a permit.

3. Property in Condominium

No, this doesn’t mean a townhome-like residence or a single unit in a high-rise development. It just means a property has been developed according to “Condominium Law.”

These laws allow developers to regulate certain aspects of the development, according to a set of by-laws that spells out all the restrictions and limitations. It’s technically the same as fee simple ownership. However, the by-laws may restrict certain aspects in order to preserve the intended look and feel of the development.

playa-flamingo-costa-rica-04

4. Untitled Property

Properties in Costa Rica are required to be registered in the Folio Real at the offices of the Public Registry in San Jose. This registry contains information on the ownership, boundary lines, liens, etc.

That being said, there are some properties in Costa Rica that have never been registered. They may have been passed down through family generations, claimed by squatters, or maybe even never occupied by anyone. This type of property is not recommended for purchase due to the difficulty in proving where the boundaries are or that the “owner” even has a right to sell it.  

5. Time Share

While not common in Costa Rica, time share properties do exist. Similar to condominium properties, these offer owners the option to use a particular property for a specified amount of the year.

6. Frontier and Border Land

This category represents the only land in Costa Rica that can’t be owned, either by foreigners or locals. It’s essentially any land within two kilometers of any national frontiers or borders shared with other countries.

playa-hermosa-costa-rica-03

There Are Two Types of Purchasing Methodologies

You can purchase and own Costa Rica real estate in one of two ways. Here’s an explanation of each method.

Direct Transfer

This method is exactly what it sounds like. The buyer buys a property and takes ownership, registering it in their own personal name.

Corporations

Buying a property through a corporation is a common practice in Costa Rica. It’s a relatively simple process, with the help of a knowledgeable attorney, and allows the buyer to remain anonymous by registering the property in the name of the corporation.

Another variation of this method is for a buyer to acquire a property by buying shares in an existing corporation that already owns a property, in which case transfer taxes can be avoided since there’s technically no change in ownership of the property if the same corporation still owns it.

There are definite benefits to this method. However, there are also some risks. Namely that a buyer cannot be completely sure that the corporation they’re buying into has no other liabilities that might undermine its solvency.

Now You’re Armed With All the Knowledge You Need

So, that’s it. That’s the basics. Consider yourself ready to navigate the laws governing Costa Rica real estate. All that’s left to do is find the property of your dreams!

Up Next

7 of the Top Places U.S. Expats Are Living in Latin America (and Why)

New data shows where U.S. expats are residing all across the globe. Many of the top destinations are in nearby Latin America. Find out why. (Read It)

Central America's Best Real Estate Buy

Don't miss this up and commer. It has the tropical lifestyle, stunning beauty, and smokin appreciation potential. (Read It)

The World’s Top 10 Best Places to Put Your Money

Offshore banking isn't just for the super rich. But how does the average Joe decide where to put his money? Here are the world's top banking jurisdictions. (Read It)

Nosara, Costa Rica Everything You Need to Know. I Mean Everything.

Imagine a small, beautiful beach town surrounded by jungle and wildlife with a peaceful multicultural community and many of the comforts of home. That place, named by National Geographic as one of the top surf …

(Read It)
panama city panama real estate update

Panama City, Panama Real Estate Market Update

Today we have a guest post written by Kent Davis, owner of one of the most successful real estate brokerages in Panama City The Panama City real estate market may have finally taken a turn in …

(Read It)
costa rica websites

Top 133 Costa Rica Websites for Expats and Investors

Did you know there are dozens and dozens of great resources on Costa Rica for expats and investors? Sure, we have a ton of resources for Costa Rica on our site, and a whole bunch …

(Read It)

The Truth about Living in Costa Rica: The Good, the Bad, and the Muddy

It's easy to find tons of articles and information out there highlighting all the great benefits of living in Costa Rica. But it's also easy to read those blogs and marketing pieces and think, "Yeah, it …

(Read It)

Why Nosara, Costa Rica Is Not Your Average Surfing Town

A deeper look at Nosara and its history will quickly reveal that this long-time mecca for surfing enthusiasts offers so much more than just the sand and sea. The increasing interest in the area as a …

(Read It)

Expats Are Still Falling in Love with Nosara and Here’s Why

What was once the up-and-coming expat haven of Nosara, Costa Rica, has blossomed into one of Costa Rica's most established expat communities that continues to be ranked near the top of the list of most desirable destinations in the Latin …

(Read It)

One thought on “Costa Rica Primary: Everything You Need to Know About Property Laws

  1. Stafford Williamson
    1

    I am interested in a small building lot, not in a regulated community, in order to build a house into the side of a hill,electricity and water to proerty oine are designable sewage is optional- value for steady foundation and footage (that that can be cheap based on he amount of slope not the amound of sq meters) Can you help, me please. The Limon net nor far from the airport is appealing to me., Thanks,.

Leave a Reply

Your email address will not be published. Required fields are marked *