Costa Rica has long been a popular destination for expats seeking a new home, a second home/rental property. The allure lies in its warm climate and even warmer people. Not only is it a fantastic vacation destination, but it also serves as an excellent place to live. Understanding the intricacies of buying property in Costa Rica is paramount to a positive, successful experience. As suggested in the title, we have distilled these points into “5 Keys”.
Foreign Ownership Rights:
The good news is that both foreigners and ticos enjoy equal ownership rights in Costa Rica. Whether you’re eyeing a property as an expatriate or a local, ownership is accessible and enforceable. Most properties feature fee simple title, mirroring the general ownership structure found in the U.S., Canada and Europe. In addition, foreigners can purchase property on a tourist visa without the need for residency or citizenship. There is no minimum requirement for days spent in Costa Rica, as well. Some of our clients with rental homes only visit for two weeks per year because their calendar is full of renters (think- profits).
Finding Your Ideal Property:
Unlike the United States, Costa Rica doesn’t have an MLS database. However, as a veteran brokerage, we are connected with every real estate agent in the area. The WhatsApp group keeps us up to the minute with new listings, and our websites reflect the current inventory on the market. Working with Dominical Property ensures you’re in the hands of professionals who understand the market dynamics and can guide you to the perfect home or property.
Professional Representation is Crucial:
Whether you’re a citizen, resident, or non-resident, hiring a real estate attorney is indispensable. Language barriers can be overcome by engaging a reputable bilingual attorney, doubling as a Costa Rican public notary. This ensures effective representation, especially during the critical step of recording the purchase in the National Registry. We have a number of experienced and vetted lawyers on call to assist you. Also make sure to use a SUGEF (super intendant of finances) certified realtor that has permanent residency or citizenship and is allowed to work in real estate in Costa Rica. Also they should be registered with the Hacienda (tax authorities) and able to provide factura electronicas (electronic receipts) for their commission as active tax contributors. Only realtors with these requisites are legally allowed to broker real estate transactions and receive commissions from certified escrow companies.
The Purchase Process:
While the process shares similarities with the U.S. and Canada, there are nuanced differences. Once you’ve selected a property, your agent will draft a written offer. Following negotiations and agreement on the final price and terms, your real estate attorney will formalize the purchase-sale agreement. A deposit, typically 10% of the sale price, is then placed in escrow. Closing typically occurs within 30-60 days, which allows for ample time to set up your Costa Rican escrow account, make the money transfers, and review due diligence discovery.
Closing Costs, Commission, and Registration:
Although negotiable, closing costs (estimated at 4% of the total sales price) are typically paid by the buyer. This amount includes the fee paid to your lawyer, who’s duties include– registering the change of ownership/deed in the National Registry, applying the associated transfer tax, judicial stamps, and your diligence expenses (think- survey review, soil study, home inspection, etc.). Although it is legal to hold the property in your personal name, most lawyers will encourage you to hold it within a new Costa Rican corporation (think- LLC) that they establish solely for your property.
Commission payments are the seller’s responsibility, Similar to other real estate markets around the world, and the commission is split between the listing agent and buyer’s agent.
Closing with Dominical Property in Uvita:
For those intrigued by the Costa Ballena and its vibrant nature and community, Dominical Property stands ready to guide you. We leverage our network and time-earned expertise to ensure you have a positive and seamless experience.
For more information, contact us today!
