Yes, you do indeed need a lawyer who is a notary public, so that he or she can accompany you in the process of buying a property in our country. The main reason is that there must be a legal deed in a protocol that will later be presented by the professional before the National Registry of Costa Rica. The notary public must be registered and up to date with the Costa Rican Lawyers association.
Then, hiring a notary public can also help you so that he advises you regarding the legal status of the property for which you are interested in. Thus, you will know if the property is free of encumbrances, mortgages and annotations. Also, in the event that the property is in the name of a company, the professional will help you verify that it is a clean company and free of any legal situation or tax problems.
Notary public fees, tax stamps and transfer taxes as established by law.
Notary Public Fees: They range from 1% to 1.5%, depending on the price of the property and the complexity of the transaction.
Tax stamps: 0.8%.
Transfer tax: 1.5%.
In accordance with Costa Rican legislation, these percentages are calculated based on the higher price between the purchase price and the fiscal value of the property.
The property tax corresponds to 0.25% of the value of the property. This is an annual tax, but it is collected on a quarterly basis – and is collected in conjunction with the garbage collection and sanitary sewer service.
Municipalities require owners to update the value of the property every 5 years.
After the VAT law, which came into force in 2019, if you sell a property that is not your home for personal use, you must file the profit and loss statement before direct taxation. The tax is calculated as follows: the purchase price is subtracted from the sale price, and on the difference (if there is a utility), a 15% tax must be paid to the state. Just as it is paid with the interest that accrues in the bank when you have capital saved, or money placed in the stock market.
It is very important to hire a real estate company since it verifies the properties in the registry and on site before being offered to its clients. This saves you time and headaches. Ideally, the real estate company must be registered with the Chamber of Real Estate Brokers of Costa Rica and duly registered with the SUGEF.
Being a foreigner you can buy a property under the same conditions as any national of the country. Even if you only have a tourist visa, a residence is not required, much less a nationality.
A property that is in the auction process is a property that is in dispute in the different courts of Costa Rica. Usually due to non-payment of a mortgage. To be able to buy a property at auction, you have to follow the development of the trial for months and have sufficient cash resources (without credit) to be able to bid and win the property from the bank or lender that is trying to award it. For example, a house worth $200,000 – the bank lent $140,000 10 years ago – but the person stopped paying 1 year ago or more. At the time he stopped paying, the balance on the transaction was $120,000.
Now, the balance with lost interest, procedural costs and others amount to $150,000. In this case, the bank's lawyer is going to bid up to the $150,000 that is owed to his principal, but the bank is not going to bid on top of this. If you want to award this property, you have to go to court personally and make an offer greater than $150,000. To win the bid, you must deposit the full amount in cash. This does not guarantee 100% that you will be awarded the property. It may be that there are additional legal processes that delay the purchase and even cancel the sale, in which case the money would be returned to you without any interest.
The procedure varies a bit between the different banks, but most require that the promissory buyer pay a visit to the property in question. After this, present a written and signed offer where you should usually put: the amount offered, the amount of money that you can give to tie up the business, you must also state if the purchase will be made with your own resources or with financing banking.
After this, the bank will formally respond to you if your offer was accepted. If so, you have 24 hours to deposit the presented amount of money to tie the business and then you have 60 days to cancel the remainder with your own resources or process the bank credit.