FAQs

Frequently asked questions from our customers

Is a lawyer required to buy real estate in Costa Rica?

Yes, you do need a lawyer who is also a notary public to guide you through the process of buying property in our country. The main reason is that a legal deed must be recorded in a protocol, which the lawyer will then present to the National Registry. The notary public must be registered and in good standing with the bar association.

Hiring a notary public can also help you by providing advice on the legal status of the property you're interested in. This way, you'll know if the property is free of liens, mortgages, and encumbrances. Additionally, if the property is registered to a company, the notary will help you verify that the company is in good standing and free of any legal issues or tax problems.

The fees of the notary public, the fiscal stamps and the transfer tax as established by law.

Notary fees: These range from 1% to 1.5%, depending on the property price and the complexity of the transaction.

Tax stamps: 0.8%.

Transfer tax: 1.5%.

According to Costa Rican legislation, these percentages are calculated based on the higher of the purchase price and the property's tax value.

Property tax is 0.25% of the property value. This is an annual tax, but it is collected quarterly – and is levied along with garbage collection and sewage services.

Municipalities require property owners to update their property value every five years.

After the VAT law came into effect in 2019, if you sell a property that is not your primary residence, you must file a profit and loss statement with the tax authorities. The tax is calculated as follows: the purchase price is subtracted from the sale price, and a 15% tax is payable to the state on the difference (if there is a profit). This is similar to the tax paid on interest earned in a bank when you have savings or money invested in the stock market.

It's very important to hire a real estate company, as they verify properties both in the registry and on-site before offering them to clients. This saves you time and headaches. Ideally, the real estate company should be registered with the Costa Rican Chamber of Real Estate Brokers and duly registered with SUGEF (Superintendency of Financial Entities).

As a foreigner, you can buy property under the same conditions as any national of the country. Even if you only have a tourist visa, residency and citizenship are not required. 

A property in foreclosure is a property that is in dispute in various Costa Rican courts, usually due to mortgage default. To buy a foreclosed property, you must follow the legal proceedings for months and have sufficient cash (without credit) to bid and outbid the bank or lender trying to seize it. For example, a house valued at $200,000—the bank loaned $140,000 10 years ago—but the borrower stopped making payments a year or more ago. At the time of default, the outstanding balance was $120,000.

Now, with accrued interest, legal costs, and other expenses, the balance amounts to $150,000. In this case, the bank's lawyer will bid up to the $150,000 owed to their client, but the bank will not bid higher. If I want to acquire this property, I have to go to the courthouse in person and make an offer higher than $150,000. To win the bid, I must deposit the full amount in cash. Even this doesn't guarantee that I will be awarded the property. There may be additional legal processes that delay the purchase or even cancel the sale, in which case I would be refunded my money without any interest.

The procedure varies slightly between different banks, but most require the prospective buyer to visit the property in question. Afterward, they submit a signed written offer, which typically includes: the offer amount, the down payment required to secure the deal, and whether the purchase will be financed with personal funds or bank financing. 

After this, the bank will formally notify you whether your offer was accepted. If so, you have 24 hours to deposit the initial payment and then 60 days to pay the remaining balance with your own funds or apply for a bank loan.