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Can Foreigners own Land in Costa Rica? This seems to be the big question on everyone's mind and the great news about Costa Rica, unlike most other Central American countries is "yes you can". In Costa Rica, property is transferred from seller to buyer by executing a transfer of deed (escritura) before a Notary Public, usually your Attorney. Unlike common law countries, such as the United States and Canada, where the role of the notary is limited to authenticating signatures, in Costa Rica the notary public has extensive powers to act on behalf of the state. The notary public must be an attorney and she or he may draft and interpret legal documents, as well as authenticate and certify the authenticity of documents. 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. Research or Title Insurance on Property in Costa Rica Stewart Title says it all. A nationally recognized US Corporation providing coverage in the US and Costa Rica on all property transactions, giving you a 100% guarantee on your property investment. When you invest in a home, land or commercial property in Costa Rica, we are able to arrange for the research and examination of your properties title by Stewart Title and through an attorney. By law all properties must be registered with the Registro Publico. Most properties have a title registration number called the "Folio Real." Once you have this number you can search the database. The Registro Publico's Report, called the "Informe Registral," contains information such as the name of the title holder, boundary lines, tax appraisal, liens, mortgages, recorded easements, and other records that could affect the title. Costa Rica follows "first in time, first in right" rule. Additions to a property title are prioritized according to the date they were recorded. We make sure your Attorney searches your title back to the beginning. How can I ensure that I have clear title to the property? Costa Rican law requires that all documents relating to an interest and/or title to real property be registered in the property section of the Public Registry (Article 460 of the Civil Code). Most properties have a titled registration number known as the folio real, and the records database can be searched with this number or by name index. The Public Registry report (informe registral) provides detailed information on the property, including the name of the title holder, boundary lines, tax appraisal, liens, mortgages, recorded easements, and other recorded instruments that would affect title. Since Costa Rica follows the doctrine of first in time, first in right, recorded instruments presented to the Public Registry are given priority according to the date and time in which they are recorded. Obviously, every situation differs and in some cases a review of the Public Registry record will not be enough to uncover all encumbrances. That is why it is important that the buyer have her or his own attorney conduct an independent title search and investigation rather than rely on the seller's attorney. Write a Transfer Deed This is the document that transfers ownership of the property. The transfer is made with the buyer and seller signing the transfer deed (called an "escritura") in the presence of an attorney. The attorney then drafts the transfer deed and registers the sale at the Registro Publico. Custom dictates that if the buyer pays in cash, he selects the attorney to draft the transfer deed. If the purchase is financed, then the transfer can be made in various other ways. A. If a large percentage of the purchase price is financed by the seller and a mortgage needs to be drafted to guarantee payment, the seller's attorney may draft the transfer deed upon seller's request. B. If a property is purchased 50% cash and 50% financed, the buyer's attorney and seller's attorneys can draft the transfer deed and mortgage in a single document. This process is called a co-notariado. C. Buyer may have his attorney write the transfer deed and let the seller's attorney draft a separate mortgage instrument. Since the mortgage agreement is being drafted separately, registration fees are higher. Closing Costs By custom, buyer and seller split the closing costs, but the split may be adjusted up or down to fit the occasion. You must buy Documentary Stamps – Agrarian, Hospital, Municipal, Bar Association, National Archive and Fiscal – totaling 0.55% of sale price. You must pay a Real Estate Transfer Tax at 3% of the sale price and a Registration Fee of 0.5 % of sale price, plus Notary Fees of 1.5 % of the first $5,000 (million colones) and 1.25 % of the balance and Mortgage Registration Fees. Usually, the person getting the financing pays for the costs of drafting and registering the mortgage instrument. A mortgage may be issued at the time of the sale by adding a mortgage clause to the transfer deed. A mortgage within a deed costs 0.25% in registration fees and approximately 0.53% in documentary stamps. For drafting the document, the notary receives between 0.5% and 1.25% of the amount of the mortgage. The good news It is customary in Costa Rica to register a property at a figure far less than its actual sale price. All transfer taxes and fees discussed above are figured as a percentage of the reduced sale price -- with the exception of the notary. He or she drafted the documents. He or she knows exactly how much money changed hands. He or she collects the full .5 to 1.25% of the mortgage.
Registered Value: $ 15,000 Register The Transfer Deed To register your transfer deed you or your attorney must bring to the Registro Publico (Public Registry) the following documents: A. Proof of payment of all taxes and registrations fees B. Certifications issued by: a) Finance Ministry, confirming that all seller's property taxes were paid; and, b) the local Municipality, stating that buyer and seller areup to date on municipal taxes. C. Proof that all prior mortgages, liens and judgments (if any) have been resolved Once all fees are paid, make sure that the attorney who drafted the transfer deed registered it in the Property Section of Registro Publico. It should be registered by the Registro Publico 45 to 60 business day after presentation. Check with the notary to make sure the deed has been properly filed.
Building a Home in Costa Rica Want a home of your own in Costa Rica? You've looked around but found nothing that suits your needs ? You ask yourself: why don't we just build a house, save ourselves all this grief? No problem, at Costa Rica Paradise Real Estate we are here to help you every step of the way. Construction costs run from $45 to 100 dollars a square foot, depending on what you build. A. Checking for neighborhood zoning laws. In order to maintain local standards (and property values) some municipalities set down strict rules for style and quality of construction. C. In most municipalities, you must leave space for a front yard and a sidewalk. D. Housing developers keep in mind that Costa Rican law allows you to dedicate only 60 to 70% of your land to be used for building lots. 20% to 25% will be used for property for roads and 5% to 20% for parks. E. Along both coasts, the first 200 meters (656 ft.) above mean high tide is owned by the government. No building is permitted within the first 50 meters (164 ft.) above mean high tide. F. The area 50 meters(164 ft.) to 200 meters (656 ft.) above mean high tide may be leased from the local municipality with the approval of the Instituto de Turismo (Costa Rican Tourist Board). G. The ICT discourages the building of anything over three stories high in beach areas. Beach Front Property Concession Laws in Costa Rica In Costa Rica, practically all "maritime littoral" on both coasts belongs to the State. This means that it is in the power, custody and management of the local municipality. The first two hundred meters of the high tide line are governed by a special law called Maritime Terrestrial Mile Act, which states that the first fifty meters of coast are public and inalienable. This means that they cannot be granted under concession, let alone be private property; they are intended for the use and enjoyment of all community and any person who wishes to use them. In regards to the remaining one hundred fifty meters of this maritime terrestrial zone, the law states that they may be granted under concession for individuals to use and enjoy them, as long as such use be authorized by the municipality and a payment of a tax determined by that same municipality be made. In the process of obtaining concessions, several requirements must be observed, which may vary from municipality to municipality; nevertheless, some must be common to all municipalities. The first one is that he who requests the concession shall be Costa Rican, no concession of the maritime terrestrial zone may be granted to foreigners. In like manner, it is possible to grant under concession a land to a Costa Rican corporation or artificial person, provided that the capital stock of said company be constituted in its majority by Costa Ricans; foreigners may not be owners of the majority of the capital stock of a company requesting a concession of the maritime terrestrial zone. Upon complying with these requirements, the interested party may request the local municipality to be granted the right to use the land in exchange of a payment to the municipality. In the concession process, the requestor must comply with several requirements; for instance, landmark setting of the zone, a cadastral plan of the land requested to be granted under concession, in some cases a zone regulating plan and, in others, the approval of an environmental impact study, etc.; as I indicated above, this depends on the local municipality. Whenever a concession is duly registered, this means that it is duly granted by the local municipality, approved by the Costa Rican Tourism Institute, and registered in the Public Concessions Registry; it may be assigned to an interested third party. Usually, there is a payment involved; nevertheless, such payment is not guaranteed, or binds the municipality or the concessions registry. The assignment implies to fill out a form requesting the municipality to accept the same. We must not forget that the land belongs to the State and it is granted under concession, reason why, in principle, the State is empowered to deny a renewal of that concession once the term thereof has expired, although this is not very much likely to happen. It is also possible, within the commercialization process of beach properties, to acquire a right of possession, which means that the holder of that right is not yet a holder of the concession; therefore, he who acquires that right is not certain that the municipality shall grant him the concession of the land located within the maritime terrestrial zone. In this case, what usually exists is a file in the local municipality indicating the interest of an individual of acquiring the concession, and since in Costa Rica, he who is first in time is first in right, the municipality should, if he complies with all requirements, grant him the concession thereof. Notwithstanding the above, it is very important to have clear that, as we can see, this is an expectation of right. In theory, these rights of possession or maritime terrestrial concessions are not susceptible to sale, meaning that the municipality is not obliged to respect any agreements subscribed by and between individuals on this regard. Nevertheless, they have always been respected, because what the municipality seeks is that he who makes the request, complies with the requirements and pays the corresponding tax. In like manner, it is important to note that he who is granted the concession does not acquire the ownership of the land; the same continues to be property of the State. This is why the land granted under concession or right of possession may not be mortgaged or granted under any kind of security. As a summary of the foregoing, we have that the lands granted under concession, or which concessions are being requested, are mere expectations of right and are commercialized by individuals due to their great tourist and scenic value. Nevertheless, the rules are set by each one of the municipalities and in default thereof, the State itself, and these are not obliged to respect any private agreements subscribed by individuals intended to sell or buy these lands.
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