Complete Guide to Foreigners Buying Property in Costa Rica

Direct answer: Yes, foreigners can buy property in Costa Rica with the same constitutional rights as Costa Rican citizens. Outside of certain coastal areas, there are no restrictions on foreign ownership.

This guide walks you through the complete buying process, from understanding your rights to closing the deal.

Can Foreigners Buy Property in Costa Rica?

Costa Rica’s constitution guarantees equal property rights for foreigners and citizens. You can purchase, own, and sell property in your personal name with full fee simple (absolute) ownership rights.

Unlike some Latin American countries that restrict foreign ownership or require special permits, Costa Rica treats foreign buyers the same as locals when it comes to titled property. The National Registry (Registro Nacional) is a transparent, centralized system that records all property ownership. Your name will appear on the title just as a Costa Rican citizen’s would.

The one major exception: Coastal property within the maritime zone has different rules (explained below).

Step-by-Step Buying Process

1. Find a Property and Make an Offer

Work with a licensed real estate agent who understands the local market. When you find a property you want, your agent presents your offer to the seller. Offers typically include:

Purchase price
Deposit amount (usually 5-10% as good faith)
Due diligence period (commonly 30-45 days)
Closing timeline
How closing costs will be split

2. Sign an Option to Purchase Agreement

Once the seller accepts your offer, both parties sign an “option to purchase” agreement (promesa de compra-venta). This is not the final sale deed, but a binding contract that gives you exclusive rights to purchase the property while you complete due diligence.

Your deposit (typically held in escrow by a closing attorney) becomes non-refundable after the due diligence period ends, assuming no title issues are found.

3. Hire Your Own Attorney

This is critical. Do not use the seller’s attorney or rely on a shared attorney. Hire a bilingual Costa Rican attorney who specializes in real estate and has experience working with foreign buyers.

Your attorney’s job is to verify:

The seller legally owns the property and can transfer title
There are no liens, debts, or legal claims (anotaciones) on the property
Property boundaries match the registered title (cadastral survey)
Property taxes and HOA fees are current
Utilities are paid up to date
Zoning permits construction or intended use
No environmental or legal restrictions prevent development

4. Due Diligence Period

This is when your attorney conducts a full title search and property investigation. In Costa Rica, this process can take 3-6 weeks depending on how quickly information comes back from government offices.

Common issues found during due diligence:

Title annotations showing unpaid debts
Boundary discrepancies between the registry and actual survey
Utility bills in someone else’s name
Property tax arrears
Incomplete or missing building permits

If serious issues arise, you can cancel the agreement and get your deposit back (if still within the due diligence period).

5. Set Up Ownership Structure

You need to decide whether to buy property in your personal name or through a Costa Rican corporation.

Personal ownership is simpler and cheaper. Your name goes directly on the title. This works well for a single vacation home or retirement property.

Corporate ownership (through a Costa Rican S.A. or sociedad anónima) offers privacy and can simplify estate planning. When you sell, you can transfer the corporation shares instead of the property title itself, potentially saving on transfer taxes.

For detailed guidance on when to use a corporation, see our guide: Should You Use a Holding Company for Costa Rica Property?

6. Open Escrow

Escrow isn’t mandatory in Costa Rica, but it’s standard practice for transactions involving foreign buyers. Your closing attorney typically manages escrow, holding your purchase funds until all conditions are met and the title is ready to transfer.

Escrow protects both parties. The seller knows funds are available, and you know the money won’t be released until the title is clear and transferred to your name.

7. Sign the Transfer Deed (Escritura)

Once due diligence is complete and all conditions are satisfied, both parties meet at the notary’s office to sign the transfer deed (escritura de traspaso). In Costa Rica, notaries are attorneys with special certification who have the legal authority to witness and execute property transfers.

The notary reads the deed aloud (usually in Spanish, with interpretation if needed), confirms everyone understands and agrees, and both parties sign. This is when ownership officially changes hands.

8. Title Registration

After signing, the notary files the transfer deed with the National Registry along with payment for transfer taxes and registration fees. Registration typically takes 2-4 weeks.

Once the registry processes the filing, you receive your official title document showing your name as the legal owner. The escrow funds are released to the seller at this point.

Legal Requirements and Documentation

What You Need as a Foreign Buyer

Valid passport – No residency required to purchase property
Tax identification number (NITE or DIMEX) – Your attorney can help you obtain this if you don’t have it
Proof of funds – Bank statements showing you can complete the purchase

That’s it. You don’t need a visa, work permit, or residency status to buy property in Costa Rica.

Common Legal Documents in the Process

Option to purchase agreement (promesa de compra-venta) – The initial contract
Property title report (estudio registral) – Your attorney’s due diligence report
Cadastral survey (plano catastrado) – Official boundary map
Property transfer deed (escritura de traspaso) – The final sale document
Power of attorney (poder especial) – If you won’t be present for closing

Maritime Zone Restrictions

If you’re looking at beachfront property, you need to understand Costa Rica’s Maritime Zone Law (Ley de Zona Marítimo Terrestre).

The law applies to all coastal land within 200 meters of the high tide line, measured inland from the beach. This zone is divided into two sections:

Public Zone (first 50 meters): This land belongs to the public and cannot be owned, leased, or developed by anyone. It’s meant to preserve beach access for all Costa Ricans and visitors.

Restricted Zone (next 150 meters): This land can be leased through a government concession, but not owned outright. Concessions are typically granted for 5-20 year renewable terms through the local municipality.

Foreign Ownership Limits on Concession Land

Foreigners who are not legal residents of Costa Rica can hold a maximum of 49% ownership in a concession property. The other 51% must be held by a Costa Rican citizen or legal resident.

Once you establish legal residency (temporary or permanent) and have lived in Costa Rica for at least 5 years, you can hold 100% of a concession.

Why Maritime Zone Matters

Many desirable coastal properties in popular areas like Tamarindo, Jacó, and the Papagayo Peninsula fall within the maritime zone. These properties:

Cannot be financed by most banks (concessions are not titled property)
Require annual concession fees paid to the municipality
May have development restrictions based on local zoning (Plan Regulador)
Come with less security than fee simple titled land

Titled beachfront properties do exist in areas where the 200-meter maritime zone was already privately owned before the 1977 law went into effect, or where properties are just outside the 200-meter line but still have ocean views. These are rare and typically command premium prices.

Closing Costs Breakdown

Closing costs in Costa Rica typically run 5-6% of the purchase price, with bare legal minimums as low as 3-4%. These costs are customarily split 50/50 between buyer and seller, though this is negotiable.

Here’s what makes up the total:

Transfer Tax

1.5% of the registered value. This is the main government tax on property transfers, calculated on whichever is higher: the sale price or the municipality’s registered property value.

Registration Stamps and Fees

Approximately 0.85%. Various small fees for recording the transfer with the National Registry.

Notary and Attorney Fees

Around 1.25% plus 13% VAT. Your attorney’s fee for conducting due diligence, drafting the transfer deed, and managing the closing. This can vary based on purchase price and complexity.

Other Potential Costs

Title insurance – Optional, typically 1.5% of purchase price with a $700 minimum
Property survey – If you need an updated cadastral plan, typically $800-1,500
Escrow fees – If using third-party escrow, around 0.5%
Appraisal – Required by banks if financing, typically $300-500

Example: On a $400,000 purchase with costs split 50/50, expect to budget approximately $6,000-8,000 for your share of closing costs.

Corporate vs Personal Ownership

Most foreign buyers choose between two ownership structures:

Personal Ownership (Your Name on Title)

Pros:

Simpler and cheaper to set up
Lower ongoing costs (no annual corporate fees)
Straightforward for single-family vacation homes

Cons:

Your name is public record
Estate transfer requires probate process
Potentially higher transfer taxes when selling

Corporate Ownership (Costa Rican S.A.)

Pros:

Privacy (corporation name appears on title, not yours)
Easier to transfer ownership by selling shares
May reduce transfer taxes when selling
Simpler estate planning (heirs inherit shares, not property)

Cons:

Setup costs around $1,000-1,500
Annual corporate fees (registered agent, tax filings) around $300-500
More paperwork and compliance requirements

For most buyers planning to hold long-term or purchase multiple properties, corporate ownership makes sense. For a single vacation home, personal ownership is often simpler.

See our full analysis: Should You Use a Holding Company for Costa Rica Property?

Financing Options

Local Bank Mortgages for Foreigners

Getting a mortgage in Costa Rica as a foreigner is possible but more challenging than in North America or Europe. Banks that have offered foreigner mortgages include BAC Credomatic, Scotiabank Costa Rica, Banco Promerica, Banco BCT, and Banco Lafise. Availability and terms change frequently, so confirm current options with a local mortgage broker.

What to expect:

Down payment: typically 30-50%, often 40-50% for non-residents (financing up to 50-70% of property value)
Interest rates: Typically 7-10% for foreigners
Term: Usually 10-20 years
Income verification: Extensive documentation required, including proof of foreign income
Property restrictions: Most banks won’t finance concession properties or rural land

The application process can take 2-3 months. You’ll need to establish a relationship with the bank, open accounts, and often make several in-person visits.

Developer Financing

Some developers and builders offer seller financing, particularly for pre-construction or new development projects. Terms vary widely, but you might see:

20-30% down payment
5-10 year terms
Interest rates around 6-8%
Property held as collateral

Home Equity or Foreign Financing

Many buyers find it easier to finance their Costa Rica purchase using a home equity line or cash-out refinance on property in their home country. Interest rates are often lower, and the process is more straightforward if you already have established credit.

Cash Purchase

The majority of foreign buyers in Costa Rica purchase with cash. This simplifies the process significantly and gives you stronger negotiating power with sellers.

Common Pitfalls to Avoid

1. Not Hiring Your Own Independent Attorney

The most expensive mistake foreign buyers make. Never use the seller’s attorney or try to save money by sharing legal representation. A bilingual attorney who works for you costs around $1,000-2,000 for a standard transaction. A bad purchase can cost you hundreds of thousands.

2. Skipping Thorough Due Diligence

Don’t rush. Give your attorney time to properly investigate the title, verify boundaries, check for liens, and confirm all permits. Title issues are common in Costa Rica, and many are fixable if found before closing.

3. Not Verifying Property Boundaries

Registry records and actual surveyed boundaries don’t always match in Costa Rica. Pay for an updated cadastral survey if the existing one is old or if there’s any question about where your property lines are.

4. Ignoring Maritime Zone Status

Buying beachfront property without understanding whether it’s titled land or a concession can lead to financing problems, ownership limitations, and unexpected fees. Always verify the exact distance from the high tide line.

5. Buying Sight Unseen

Photos and virtual tours don’t show everything. Visit the property in person, preferably during rainy season if you’re buying in a wet climate zone. Check road access, water quality, cell service, and proximity to amenities.

6. Underestimating Infrastructure Differences

Not all Costa Rican properties have municipal water, paved road access, high-speed internet, or reliable electricity. Ask specific questions about utilities and verify answers independently.

7. Failing to Understand Ongoing Costs

Beyond the purchase price, budget for:

Annual property taxes (around 0.25% of registered value)
HOA fees (if applicable)
Concession fees (if maritime zone)
Maintenance and upkeep (higher in tropical climates)
Property management (if it’s a vacation rental)

8. Currency and Tax Assumptions

Property prices are often quoted in U.S. dollars, but taxes are calculated in Costa Rican colones at the official exchange rate on the transaction date. Currency fluctuations can affect your final cost.

Also, consult a tax professional in your home country about foreign property ownership requirements and potential tax implications.

Due Diligence Checklist

Use this as a starting point for what your attorney should verify:

Title and Ownership:

Current owner matches the seller’s identity
Clear chain of title going back at least 10-20 years
No liens, mortgages, or encumbrances on the title
No annotations (anotaciones) indicating legal disputes or claims
Property boundaries match cadastral records

Taxes and Fees:

Property taxes current (verify last 5 years)
All municipal taxes and fees paid
HOA fees current (if applicable)
Concession fees current (if maritime zone)

Legal and Zoning:

Zoning allows your intended use
All construction has proper building permits
No environmental restrictions (wetlands, protected areas, etc.)
Road access is legal and documented
Water rights are clear and transferable

Physical and Utilities:

Property boundaries physically marked or surveyed
Water source confirmed (municipal, well, or concession)
Electricity service in seller’s name and transferable
Internet and phone service available (if needed)
Septic system or sewer connection legal and functional

Special Situations:

Maritime zone status verified if coastal
Corporation in good standing if buying shares
Rental income claims verified with documentation
Any easements or rights-of-way disclosed and documented

What Happens After You Buy

Once you own property in Costa Rica:

Property Taxes: You’ll pay annual taxes around 0.25% of the registered value. These are billed quarterly. Your property management company or attorney can handle payments.

Corporation Maintenance (if applicable): Annual registered agent fees, tax filings, and corporate good standing requirements. Budget $300-500 per year.

Utilities: Transfer all utilities into your name (or your corporation’s name) immediately after closing. This includes water, electricity, phone, and internet.

Property Management: If you’re not living in Costa Rica full-time, you’ll want someone to maintain the property, handle repairs, pay bills, and manage any rental income. Property management fees typically run 10-20% of rental income or a monthly flat fee for non-rental properties.

Insurance: Standard homeowner’s insurance is available through local and international carriers. Earthquake coverage is usually a separate rider. Costs vary widely based on location and property value.

Once you’ve purchased property in Costa Rica, these guides will help you manage and protect your investment:

Holding Companies for Costa Rica Property — Why most foreign buyers use corporations (S.A. or S.R.L.) and how they work.
Costa Rica Real Estate Investment — Market analysis, ROI expectations, and investment strategies.
Choosing a Property Manager in Costa Rica — Essential if you’re not living in Costa Rica full-time.
Costa Rica Rental Income Tax — Your tax obligations if you plan to rent the property.
Vacation Rental Regulations in Costa Rica — Compliance requirements for short-term rentals.

Final Thoughts

Buying property in Costa Rica as a foreigner is straightforward when you follow the process and work with qualified professionals. The key is not to rush.

Take time for proper due diligence. Hire experienced help. Visit the property and the area multiple times if possible. Ask questions until you understand every detail of what you’re buying and what ongoing responsibilities you’ll have.

The payoff is owning a piece of one of the most beautiful countries in the world, with constitutional protections that give you the same rights as any local property owner.

Legal Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified Costa Rican attorney or tax professional before making any property purchase decisions.