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Ownership of Land Costa Rica laws and Constitution protect private ownership of land and
foreigners enjoy the same rights as citizens. There are almost no restrictions
to ownership of private land, except that given or sold to Costa Rican
citizens as part of government programs, which can be freely trade or acquired
by foreigners only after the original owner has held it for certain period
of time. Neither citizenship nor residence or even presence in the country
is required for land ownership.
Registration Costa Rica boasts of a safe form of title registration to protect buyers from hidden claims. It is centered in the Registro de la Propiedad (Property Registry), where both title documents and survey palted for every property are recorded. Any change in the status of a title or any claim that might affect it must also be noted on the title registry page, thus making it easy to verify. Those who want to buy land in Costa Rica should get professional advise,
which include a search of the title in the Registry, so as to confirm there
are not liens on it, and to establish its proper ownership. Once the deal
is completed, you should also secure documents from a lawyer to prove that
the sale was registered, for your own safety and to prevent to somebody
else.
Financing Practically no local financing at economically feasible rates is available
for property purchases. This is the result of high yields and rapid increase
in property value, due to a growing population and other factors. However,
this in turn makes up for the lack of leverage in Costa Rica, as do the
country’s stability and security, which makes its continued growth.
Zoning Knowledgeable lawyers agree that zoning regulations in Costa Rica are
reasonable and logical, although far less stringent that in countries such
as United States. A registered local engineer must sign all building and
subdivision plans and they also require approval by the local municipality,
the Ministry of Health, and the government Housing Department.
Brokers The Ministry of Economy issues real estate licenses on recommendations
from the Chamber of Real Estate Brokers, which is dedicated to raising
standards of both competence and ethics.
Taxes The taxes paid on properties in Costa Rica are very low. Yearly property taxes vary from 0.5% to 1.5% of the declared value of the property. This declared value is a common law practice in which a property’s value according to the government very low, almost always lower than the sales practice.
Closing costs for a sale include a transfer land tax, a stamp tax, and
legal fees. Closing costs typically run 5% to 6% of sales price and are
usually split 50/50 between buyer and seller. The transfer and land taxes
are assessed based on the declared value, while legal fees are charged
based on SALES PRICE of the property.
Currency Law Costa Rica has recently made a radical change, for the better, in the
currency law. While until recently sales negotiated in dollars had to be
written in colónes, it is now possible to have contract in dollars
give both buyer and seller a peace of mind previously unavailable. There
need be no worry with regard to serve devaluation of the colón,
for example, or other difficulties introduced by having to translate back
and forth between dollars and colónes. Another major effect is the
possibility of having mortgages in dollars. This mortgages are still seller-leveraged
more often than not, but can be written by another attorney and guaranteed
by the property. Once sellers understand the implications of being able
to offer this type of mortgage, it will likely become the most common type
of financing, tempered by the buyer’s desire to keep his property taxed
lower, as a mortgage will automatically raise the declared value of the
property to the amount of the mortgage.
Regulations for Beachfront Property When buying beachfront properties, one must be aware of regulations Costa Rica’s coastline is all public. By law, the first 50 meters above the mean high tide line are inalienable public, define by what is known as the 50-meter line. No one can restrict access or have a totally private beach. There are some exceptions, but they include port areas, old land grants, and some title prior to 1973. On 80% to 85% of the coast, the next 150 meters are government owned lease and also known as the maritime-terrestrial zone (or just maritime zone). Restrictions on maritime zone land for foreigners are that one must establish five years residency to own more than 49% of the rights to a lease. Two loopholes include holding the lease with a corporation that is wholly owned by a foreigner, or by having a Costa Rican hold 51% of the lease in name only. Development of the maritime zone does not discriminate against foreigners. A regulation plan must exist for area where the land is or just for the parcel itself. If one does not exist the developer must make one, then have it approved by ICT (the Tourist Board), INVU (the Urbanization Institute), and local municipality. Such a regulation plan will call for "zoning of land" includes public use areas, road, water, electricity and more. The other 15% to 20% of the coast is land that is title to the 50 meters line. That is to say that no maritime zone exists and the landowner may develop without inconvenience of filing a regulation plan. Tourist development must, of course, be approved by ICT, but almost anything else would require only building permits. |
