In matters of land and property ownership, foreigners and Costa Rican citizens have equal rights under the law (unless the owner bought the land as part of a government program). In these cases, the land can be traded or sold to foreigners only after the original owner has held it for certain period of time.

Foreigners do not have to live in Costa Rica to own property here.

Costa Rican properties are registered at the Registro de la Propiedad (Property Registry) which keeps track of all the title registrations. It is a great resource for verifying the status of a title or claim associated with a property.

If you wish to buy land in Costa Rica it is wise to either hire a lawyer or go yourself to the Registro de la Propiedad to search the title and verify that there are no liens against the property or the property owner(s).

Once you buy a property, you need to make sure the sale is properly registered at the Registro de la Propiedad, proof that you are the new legal owner.

There is no local financing for property purchased by foreigners.

Building and subdivision plans must be:

A. Signed by a registered local engineer

B. Approved by the local Ministerio de Salud (Health Department)

C. Approved by the Instituto de Vivienda y Urbanismo (INVU) (Housing and Urban Development Department)

The Ministerio de Economia (Treasury Department) issues real estates licenses on the recommendation of the Chamber of Real Estate Brokers.

Property taxes vary from 0.5% to 1.5% of the declared value of the property. However, Costa Ricans are a calm and resourceful people, so they customarily undervalue their properties by at least 20% when they register it.

The closing costs of a sale include a transfer land tax, a stamp tax, and legal fees. Closing costs run about 5% or 6% of the sale price, an expense divided evenly between buyer and seller. Transfer land tax and stamp tax assessments are based on the declared value. Legal fees are based on the selling price of the property.

Transactions may be conducted in U.S. dollars.

Costa Rican lawmakers have drawn up very strict rules governing the development of ocean front property along both coasts.

First, according Costa Rican law, the beaches belong to everybody and everybody has a right to use them. The first 50 meters (164 ft.) above the mean high tide line are public land. No one can restrict access to a beach or claim a beach is privately owned, exceptions being landholdings in port areas, old land grants or by some agreements made prior to 1973.

Second, along 80% to 85% of the coastline, the 150 meters (492 ft.) after the 50 first meters (164 ft.) are called the Maritime Zone and are controlled by the government. A foreigner must establish five years of residency to own more than 49% of a lease in this zone. Foreigners can evade the law by assigning the lease to a corporation that is wholly foreign owned or by assigning 51% of the ownership of the land (on paper) to a Costa Rican citizen. Take a careful look at the zoning laws before you start development in any of these areas.

If there is no zoning plan for land you want to develop, hold off on the celebration. If nobody has gotten around to making a zoning plan, then it's up to you to create one on your own and submit it to ICT (Tourist Board), the INVU (Housing and Urban Development Department), and the local municipality for approval.

The "zoning of land" plan you submit must address questions regarding – among other things – public use areas, roads, water and electricity.

If your development dream is located on the 15% or 20% of the coast land not in a Maritime Zone, then you may develop the property without filing a regulating plan. However, developments geared to the tourist industry must be approved by ICT (Tourist Board), anything else requires building permits.

Purchase Contracts

Costa Rica’s legal system is based on a "civil code" system, as opposed to a "common law" system like that of the United States. Under Costa Rica’s civil code, there is less interpretation of the law by judges, because the civil code is more restrictive. For this reason, land contracts in Costa Rica are far lass comprehensive, than the common law contacts most foreigners are used to. Under the civil code system, the contact covers only what is not regulated by law, and thus can be very simple.

In Costa Rica a land purchase contract is achieved through an "option to purchase". An option to purchase gives the buyer the right to purchase a described property in a set amount of time. Typically 10-20% of the purchase price is paid to the seller through a broker or attorney (after verifying the property can be legally transferred), for the purchase of the option. Most closings can take place in a matter of days if the property is already registered in the National Registry.A purchase agreement or option to purchase under civil code has far less components but should include: