A practical FAQ manual for foreign buyers, property owners and investors
This Manual combines the firm's foundational legal FAQ with practical questions drawn from prior client communications. It is organized around the life cycle of a Costa Rican real estate investment: planning, due diligence, closing, ownership, rental operations, corporate compliance, residency and eventual sale or succession.
This manual explains common legal and commercial questions in plain English. Every transaction is different, and the applicable law, administrative criteria, fees and tax thresholds may change. Obtain transaction-specific legal and tax advice before acting.
Yes. Foreigners generally enjoy the same rights as Costa Rican citizens to own titled property registered in the National Registry, and prior residency is not ordinarily required. Special rules apply to concessions in the Maritime Terrestrial Zone. In Costa Rica, there is also beachfront fee simple titles along concessionable land. This means that foreigners are still able to buy beach front property as fee simple titles, as applicable.
The process normally includes an initial offer or reservation, a written Purchase and Sale Agreement (PSA), escrow onboarding, legal due diligence, satisfaction of closing conditions, execution of the transfer deed before a Costa Rican Notary Public, disbursement of funds, registration and post-closing compliance.
Yes. It is highly recommended that a Counsel reviews the proposed structure, title, seller, escrow arrangements and contract before funds become non-refundable. Direct deposits to a seller without a signed agreement and appropriate escrow protections are a common source of risk.
Usually. The contract calendar can often be aligned with travel dates, and closings may be coordinated in San Jose, the Central Pacific, Guanacaste, or another suitable location. Remote alternatives should be evaluated early.
No, physical presence is not strictly required. While buying directly in your personal name requires granting a special power of attorney on a Costa Rican notary protocol book, remote closing alternatives are fully available depending on ownership structure:
Personal Ownership: Requires a Power of Attorney executed before a Costa Rican Consul abroad or notarized locally with an Apostille.
Corporate Ownership (LLC / S.R.L. or S.A.): Can be completed through a power of attorney granted remotely via a shareholders' meeting minute, or signed by a designated manager/representative.
Yes. A foreign buyer may grant authority to a representative in Costa Rica through a document that satisfies Costa Rican formalities. The scope must be carefully drafted, and foreign signatures generally require notarization and apostille or consular legalization.
It depends on liability, rental plans, co-ownership, estate planning, financing and future resale. Personal ownership is simpler and avoids corporate maintenance (around $950 + VAT per year hiring ULB’s annual compliance package). An S.R.L. or S.A. provides an important level of liability/contingency protection against third parties which we highly suggest considering, as well as for confidentiality reasons, estate planning, and tax exposure management.
Acquiring the shares or quotas of the existing owner may reduce some transfer charges and can simplify registration, but the buyer assumes the entity's historical contingencies. A new company is generally cleaner because liabilities begin with the buyer, although the property transfer itself triggers transfer taxes and stamps. The saved transfer charges when buying the existing corporation are minimal (1.5% indirect transfer tax still applies) and are only recommended if the acquiring structure has an additional factor that makes it the best option to proceed with the purchase.
Corporate due diligence should examine tax debts, social security and labor exposure, litigation, accounting records, contracts, ultimate-beneficial-owner filings, powers of attorney, corporate books and undisclosed obligations. Some contingent liabilities may not appear in a registry search or in public records, avoiding the possibility to make a complete revision over the company’s history. This risk factor is eliminated when buying the title of the property directly into a new company.
It will depend on the way the PSA is drafted, but typically yes. However, the structure should be decided as early as possible. A late change may affect escrow onboarding, tax calculations, corporate approvals, lender documents, immigration planning and the identity of the final purchaser.
A complete review covers registered title, ownership, mortgages, annotations, usufructs, easements, cadastral information, municipal tax status, land use (Uso de Suelo), water availability, condominium matters, environmental restrictions, construction permits, occupancy status, septic/sewer systems, labor liabilities for caretakers or staff, rental operating records, seller disclosure of unpermitted improvements, litigation indicators, and insurance availability.
A title study reviews the National Registry record to confirm the registered owner, property description, encumbrances and recorded restrictions. It should be paired with cadastral, municipal and physical reviews because the registry alone does not answer every development or possession question.
A licensed surveyor can compare the cadastral plan with physical boundaries, occupation, access and neighboring properties. This may reveal overlaps, encroachments, missing access or inconsistencies that are not apparent from the title record. Some topographic companies also offer studies over existing trees and plants, river or well setbacks, between others. ULB will handle and coordinate this for you.
Yes. A physical inspection assesses the structural condition of improvements, furniture, appliances, visible defects, septic systems, and maintenance issues. It is distinct from legal due diligence and is particularly important when the property is sold furnished or has been used as a rental property.
Counsel may approve a transaction subject to defined pre-closing conditions, such as delivery of land-use approval, updated RTBF filing, payment of taxes, lender consent, labor releases, condominium confirmations, repairs or a negotiated addendum.
A property can have clean title but still be unsuitable for the buyer's intended project. A formal water-availability letter from AyA or the local ASADA is required for construction permits, while the municipal Uso de Suelo confirms permitted use, height, density and coverage.
The review may include protected areas, forest restrictions, river or spring setbacks, wetlands, coastal rules and requirements involving MINAE or SETENA. These constraints can limit construction even when the property is titled.
Counsel should update title and corporate searches shortly before signing to confirm that no new mortgage, embargo, annotation, transfer, power, manager change or other filing has appeared during the transaction.
In a condominium, the buyer owns a subsidiary property (finca filial) together with a percentage interest in common areas and is bound by registered bylaws. In an open residential area, ownership is generally independent, and neighborhood contributions may be voluntary unless another legal structure applies.
Review restrictions on rentals, pets, noise, construction, facade changes, parking, commercial use, occupancy and penalties. Also examine meeting minutes, budgets, reserve funds, insurance, pending special assessments and owner delinquency.
Yes. Ordinary and extraordinary assessments imposed under the condominium regime are generally binding. Unpaid fees can affect closing and may expose the property to collection measures.
It depends on the registered bylaws and valid assembly decisions. Short-term rentals should be expressly permitted or at least not prohibited, and the owner must also comply with tax, invoicing, ICT, and municipal requirements.
The ZMT generally covers the first 200 meters inland from the ordinary high-tide line. The first 50 meters are public and inalienable; the next 150 meters are usually a restricted zone administered through concessions, subject to local planning and special ownership limitations.
Special restrictions apply. A non-resident foreigner generally cannot control more than 49% of a concessionaire entity unless statutory residency conditions are met. The exact concession, municipal plan and ownership structure must be reviewed individually.
Titled property is registered ownership (fee simple title). A concession is a time-limited right of use granted by the State through the municipality, typically subject to fees, renewal, zoning and compliance conditions. A concession should never be described as ordinary fee-simple ownership.
The agreement should identify the parties and property, price, deposit, escrow, due diligence period, closing conditions, allocation of costs, representations and warranties, default remedies, possession, included assets, tax proration and the selected ownership structure.
A regulated or properly supervised escrow provider holds funds while compliance and closing conditions are completed. Funds are released according to written instructions after the required documents are executed and the closing team confirms disbursement conditions.
Requirements commonly include identification, address, source-of-funds evidence, bank statements, tax documents, contracts, entity documents, beneficial-owner information and wiring records. International transfers should be planned early because compliance review can delay closing.
A holdback is part of the seller's proceeds retained in escrow after closing to secure a pending obligation, such as repairs, tax payments, payment of open utility bills, condominium confirmation or delivery of a document. The release conditions and deadline should be precise.
Yes. Current statements are usually obtained and periodic charges allocated between buyer and seller as of closing. Outstanding amounts may be paid before closing or deducted from the seller's proceeds.
Government transfer tax, registry stamps and notarial fees are often estimated in the range of approximately 3.5% to 4% of the declared or applicable transaction value. Customarily, the Buyer pays closing costs; however, if not agreed upon, both parties share closing costs on a 50/50 basis.
No. A share or quota transfer avoids the direct real estate transfer deed, but it creates corporate indirect transfer taxes (1.5%), legal due diligence expenses, and potential tax consequences. These savings are minimal and must be weighed against inherited liability risks.
Yes, when properly documented. Escrow instructions may direct payment of mortgages, municipal balances, condominium fees, taxes or other agreed obligations before net proceeds are released to the seller.
The general municipal real property tax is 0.25% per year of the municipal registered value. For illustration, a registered value of US$500,000 generates approximately US$1,250 per year, billed quarterly by the local municipality.
Clients repeatedly confuse these two taxes. Below is a comparative breakdown of their key features:
| Feature | Municipal Property Tax (Impuesto Territorial) | Luxury Home Tax (Impuesto Solidario) |
|---|---|---|
| Taxable Base | Total registered value of land and improvements. | Value of construction & permanent installations (if above threshold; land value added once threshold met). |
| 2026 Threshold | Applies to all titled properties regardless of value. | ₡143 million (~US$280,000) of construction value. |
| Tax Rate | Flat 0.25% per year. | Progressive rate scale from 0.25% to 0.55%. |
| Filing Frequency | Declaration every 5 years to the municipality. | Declaration every 3 years (Form D-179); annual payment. |
| Annual Deadline | Quarterly payments (March, June, Sept, Dec). | Filing and payment deadline is January 15 each year. |
For higher-value homes, a formal engineering appraisal helps determine whether the construction value meets the ₡143 million threshold and supports the triennial Form D-179 declaration filed with Tax Authorities.
Owners should budget for property tax, condominium or community fees, insurance, electricity, water, internet, maintenance, landscaping, pool service, property management, corporate compliance and any Luxury Tax.
| Cost category | Condominium | Standalone home |
|---|---|---|
| HOA/community fee | US$130-US$700/month | US$200-US$550/month in gated communities |
| Electricity | US$80-US$350/month | US$120-US$350/month |
| Water | US$10-US$100/month | US$40-US$100/month |
| Internet | Approximately US$80-US$90/month | Approximately US$80/month |
| Insurance | US$250-US$1,000/year | Estimated per US$100,000 of construction value |
| Property management | US$100-US$150/month or more | Varies by scope |
| Pool/landscaping | Often included in HOA or separate | US$50-US$120 / US$80-US$300 monthly |
Alerta Registral is an automated monitoring service that notifies the owner or legal counsel of any filings or modifications affecting registered title or corporate entities in real time, serving as a critical anti-fraud tool.
Costa Rica | Updated Version 2.0 - August 2026 · Prepared by Unique Law and Business
