If
you are considering investing in costa rica real estate,
you are not alone. The combination of Costa Rica's shear
beauty and the peacefulness of it's people has made it one
of the most sought after international destinations for
land ownership by foreigners. Investing in real estate in
Costa Rica should be an enjoyable experience that brings
out the true meaning of pride of ownership. By following
a few simple guidelines and reviewing the information below,
you can make your search a safe, hassle-free process which
will bring you much satisfaction.
Ownership
of real estate in Costa Rica by foreigners is fully guaranteed
by the constitution. In addition, foreigners enjoy the same
ownership rights as Cost Rican citizens, regardless if the
property is placed in the name of a corporation or in the
name of an individual. The decision to have the property
under the name of a corporation is strictly up to the investor.
This is very common and can offer benefits of asset protection
and anonymity for the actual owner. A valid passport for
three representatives (president, vice president and treasurer-all
can be foreigners) is the only requirement for a foreigner
to form a corporation in Costa Rica; the cost is approximately
$400.00. When dealing with the maritime zone, a Costa Rican
citizen is required to hold at least 51% of the corporation
until the lease-concession is granted by the government.
Property
taxes throughout Costa Rica are very low when compared to
Canada and the United States. There are two forms of taxes,
the Municipal Tax and Real Estate Tax. The
Municipal Tax is administered at the municipal level and
varies throughout the country. Paid quarterly, the type
of property, location and other factors contribute to the
calculation of this tax. The Real Estate Tax in based on
the declared value of the propery, at a rate of 6%. This
tax is applicable throughout the country regardless of the
properties location.
A
nice incentive for foreign investment is that there is
no capital gains tax. You will not be taxed by the Costa
Rican government on the profit from the future sale of
your property as long as this is not undertaken as a means
of business. You would be obligated to pay taxes on any
"declared" earnings being brought back to your
country of citizenship.
It
is important that you or your attorney take the necessary
steps in order to properly register the property, and more
importantly, be assured that the property in question is
free of all liens and encumbrances. The Registro de la Propiedad
(Property Registry) is where all property documents are
recorded, thus a title search at the Registry would confirm
good title and proper ownership. In the event that adjustments
were made to any given title, these alterations must be
recorded at the Registry. This will show the name of the
legal owner and will disclose any liens or limitations against
the property. The arrival last year of Stewart Title Guarantee
further ensures that your purchase can be fully secured.
Check if all taxes on the property have been paid to date.
Also, ask to see an Official Registry Survey of the property.
If one has not been completed, which can be common when
purchasing a section of a larger parcel, request that any
deposit be held by the attorney until an official survey
has been provided. If this is the case, ask to review the
Official Registered Survey of the "mother" parcel.
Always
be sure to include any obligations promised by the owner
(water, road access, etc.) in the written agreement. If
the promised time for completion of these obligations is
considerable, request an amount of the purchase funds to
be held by the attorney until the obligations have been
met.
When
investing in property located inside the Maritime Zone,
the area that makes up the first 250 meters of beach front
property, you should be aware of the following:
Building
a home adjoining beach areas falls under a category known
as the Maritime Zone Law. The first 50 meters from the
mean high tide mark cannot legally be built on by anybody,
as it is public beach. From that point, the next 200 meters
is subject to the Maritime Zone Law (Concession), unless
you registered the property prior to to 73', in which
case it has full title and can be transferred as such.
Concessions, which is in effect a lease from the government
and local municipality, must be approved by the I.C.T(Tourism
Institute) and normally run for a period of 20 years.
At the moment of expiration, concessions can be renewed
for a similar period of time.
To
legally buy concessioned property the property much be
subjected to a Plan Regulador (a type of zoning and approval
plan). It is also required that you have a Costa Rican
partner that owns part of the company that obtains it.
Most importantly, keep in mind that when you buy concessioned
property you do not actually acquire title to the land,
but rather the right to utilize it for a specified period
of time.
Closing
costs normally run approximately 5% of the purchase price,
which includes a transfer land tax, legal fees, and miscellaneous
fees. For the purpose of lowering the property transfer
land tax, it is common practice to lower the gross amount
paid by declaring a much lower sum than the actual sale
price. Be aware that acting in this manner could cause problems
in the future. As always, it is recommended that you consult
a lawyer about closing costs.
Always
solicit the services of a reputable and well respected real
estate company. There are many "Street Realtors"
who are more than willing to show properties and ask for
a fee, yet lack the resources and knowledge necessary to
provide you with information critical to complete a legal
and successful transaction. The services of a professional
real estate company can prove to be invaluable both during
and after the purchase. Always be sure to meet with an attorney
who can speak your language and answer your questions before
depositing any funds or signing any documents. Many owners
of established businesses will be happy to refer the services
of a reputable attorney in the area.
Manuel
Antonio Real Estate
This site contains a listing of new
homes, beachfront properties, condominiums, building lots,
as well as some general information regarding Costa Rica
and Manuel Antionio National Park.
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