How does American-owned real estate in Costa Rica work?

Authored by the expert who managed and guided the team behind the Costa Rica Property Pack

Everything you need to know before buying real estate is included in our Costa Rica Property Pack

Who is the author of this content?

THELATINVESTOR

A team specialized in real estate investing in Latin American countries (Costa Rica, Mexico, Colombia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Costa Rica. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At TheLatinvestor, we explore the Costa Rican real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like San José, Tamarindo, and Nosara. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How easy is it for an American citizen to legally buy property in Costa Rica compared to locals or other foreigners?

American citizens enjoy virtually identical property ownership rights to Costa Rican nationals and other foreign buyers.

The Costa Rican constitution provides explicit protections for foreign property ownership, meaning Americans face no legal barriers or restrictions when purchasing real estate. You can buy residential, commercial, or agricultural property with the same legal standing as a local citizen.

The only minor exception involves beachfront concession properties, where specific maritime zone regulations apply. However, most beachfront properties available to Americans are titled properties with full ownership rights rather than concessions. These constitutional protections have remained stable for decades, making Costa Rica one of the most foreigner-friendly property markets in Latin America.

Unlike many countries that impose ownership caps or require local partnerships, Costa Rica allows Americans to own 100% of their property with no restrictions on the number of properties you can purchase.

It's something we develop in our Costa Rica property pack.

Do I need to have Costa Rican residency or a specific visa type as an American to purchase real estate there?

No residency status or special visa is required for Americans to buy property in Costa Rica.

You can purchase real estate using just your U.S. passport while on tourist status, which allows stays of up to 90 days without any visa requirements. This tourist status provides sufficient legal standing to complete property transactions and establish ownership.

While property ownership can support applications for investor residency (the "inversionista" visa program), this is entirely optional and separate from the purchase process. The investor residency requires a minimum property investment of $200,000 but offers benefits like easier re-entry and potential paths to permanent residency.

Many American property owners maintain tourist status and simply exit and re-enter Costa Rica every 90 days if they wish to spend extended time in the country.

The separation between property ownership and immigration status gives Americans maximum flexibility in how they use their Costa Rican real estate.

Can I buy property remotely from the U.S. or do I need to be physically present in Costa Rica at any point?

Americans can complete the entire property purchase process remotely without ever setting foot in Costa Rica.

The key mechanism is a Power of Attorney (POA) document that authorizes a Costa Rican attorney to act on your behalf throughout the transaction. This POA must be notarized in the United States, apostilled by the appropriate state authority, and then translated into Spanish by a certified translator in Costa Rica.

Your attorney can handle every aspect of the purchase including property searches, due diligence, contract negotiations, title verification, and the final closing. Wire transfers handle all financial transactions, eliminating the need for your physical presence during any part of the process.

While remote purchases are fully legal and common, many buyers choose to visit their prospective property at least once before finalizing the purchase to ensure it meets their expectations.

The POA remains valid until you revoke it, allowing ongoing property management if needed.

What are the exact steps and documents an American needs to buy real estate in Costa Rica from start to finish?

The Costa Rican property purchase process follows a structured eight-step sequence with specific documentation requirements.

**Step-by-Step Process:**1. **Property Selection and Initial Agreement:** Work with a real estate agent to identify suitable properties and negotiate basic terms2. **Purchase Contract Signing:** Execute a formal purchase agreement outlining price, conditions, and timeline3. **Earnest Money Deposit:** Pay typically 10% of the purchase price into an escrow account4. **Due Diligence Period:** Your attorney conducts comprehensive title searches, lien checks, and boundary verification (30-45 days)5. **Final Financing Arrangements:** Secure funding through cash, financing, or other means6. **Pre-Closing Documentation:** Complete all required paperwork and final property inspections7. **Closing Ceremony:** Sign final documents before a notary public with all parties present (or via POA)8. **Title Registration:** Register the new deed in your name at the National Registry**Required Documents:**- Valid U.S. passport (certified copy)- Power of Attorney (if buying remotely, apostilled and translated)- Proof of funds or financing pre-approval- Purchase agreement and amendments- Property survey and inspection reports- Title insurance policy (recommended)- Tax identification number (if establishing Costa Rican tax obligations)

Total timeline typically ranges from 45-90 days depending on financing complexity and due diligence requirements.

Is hiring a Costa Rican lawyer mandatory for American buyers, and what should I look for when choosing one?

While not legally mandatory, hiring an independent Costa Rican real estate attorney is strongly recommended and considered essential for protecting American buyers' interests.

Costa Rican real estate law includes many nuances unfamiliar to Americans, from title verification procedures to specific closing requirements. An experienced attorney provides crucial protection against common pitfalls that can cost buyers tens of thousands of dollars.

**Key Qualities to Seek in Your Attorney:**1. **Independence:** Never use an attorney recommended by the seller or seller's agent2. **Bilingual Capability:** Fluent English communication prevents misunderstandings3. **Real Estate Specialization:** Focus specifically on property law rather than general practice4. **Strong References:** Verified testimonials from previous American clients5. **Transparent Fee Structure:** Clear upfront pricing with no hidden costs6. **Responsive Communication:** Prompt replies to emails and calls7. **Local Connections:** Established relationships with notaries, surveyors, and other professionals

Typical attorney fees range from $1,500-$4,000 depending on property value and transaction complexity. This investment provides comprehensive title searches, contract review, closing coordination, and ongoing legal protection.

Your attorney should also assist with establishing any corporate ownership structures if desired for tax or privacy benefits.

Are there taxes or ongoing fees Americans should expect when owning property in Costa Rica?

American property owners in Costa Rica face several annual taxes and fees that total approximately 0.5-1% of property value yearly.

Tax/Fee Type	Rate/Amount	Payment Schedule
Property Tax	0.25% of assessed value	Annual
Luxury Tax	0.1-0.25% (high-value properties)	Annual
Corporate Agent Fee	$300-500 annually	Annual (if using corporation)
Transfer Tax (one-time)	1.5% of purchase price	At closing
Legal Fees (one-time)	1-2% of purchase price	At closing
Notary Fees (one-time)	0.5-1% of purchase price	At closing
Utility Connection Fees	$200-800	One-time setup

Ongoing monthly expenses include electricity ($100-300), water ($30-80), internet ($40-80), and property management if used ($500-2,000 annually). Property insurance is recommended but not mandatory, typically costing $300-1,000 annually depending on coverage and location.

The luxury tax applies to properties with certain high-end features like swimming pools, tennis courts, or luxury finishes, with rates varying based on the specific amenities present.

Which areas of Costa Rica are currently most popular with Americans and why—based on lifestyle, liveability, or community?

Five regions dominate American buyer preferences in Costa Rica, each offering distinct lifestyle advantages and community characteristics.

**Top American-Preferred Locations:**1. **Escazú (Central Valley):** Known as "Costa Rica's Beverly Hills," featuring upscale shopping, international schools, excellent healthcare, and proximity to San José's business district2. **Tamarindo (Guanacaste):** Prime beach town with vibrant nightlife, surf culture, established expat services, and strong rental income potential3. **Santa Teresa (Puntarenas):** Bohemian surf destination attracting digital nomads, yoga enthusiasts, and wellness-focused communities4. **Nosara (Guanacaste):** Eco-conscious beach community emphasizing sustainable living, yoga retreats, and organic dining5. **Central Valley (Greater San José Area):** Year-round spring climate, excellent healthcare system, cultural amenities, and lower cost of living

Escazú appeals to Americans seeking luxury amenities and urban conveniences while maintaining easy access to international airports. The area features numerous American-style restaurants, English-speaking services, and established expatriate networks.

Coastal regions like Tamarindo and Santa Teresa attract Americans prioritizing beach lifestyle, tourism income opportunities, and recreational activities. These areas offer strong rental yields but require more tolerance for tropical weather patterns and seasonal tourism fluctuations.

It's something we develop in our Costa Rica property pack.

Which regions offer the best rental yields, tourism activity, and future capital appreciation for American investors?

Costa Rican coastal provinces lead in rental yields and tourism activity, while the Central Valley offers more stable capital appreciation patterns.

Santa Teresa currently generates the highest rental yields at 9-12% annually, driven by strong demand from surfers, digital nomads, and wellness tourists. The area's limited accommodation supply and growing international recognition support premium rental rates year-round.

Tamarindo provides consistent 7-9% yields with the advantage of more developed infrastructure and easier property management. The town's established tourism economy and proximity to Liberia International Airport ensure steady visitor flow.

Nosara delivers 8-10% yields focused on eco-tourism and yoga retreat markets, appealing to higher-spending visitors seeking wellness experiences. The community's environmental consciousness and building restrictions help maintain property values.

For capital appreciation, Escazú and the Central Valley show the most reliable long-term growth, averaging 4-6% annually due to population growth, infrastructure development, and limited developable land near San José.

Tourism statistics show Guanacaste province receiving over 60% of Costa Rica's beach visitors, while wellness tourism to areas like Nosara has grown 15% annually since 2022.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Costa Rica versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

What's the latest data on property prices per square meter in key areas like Tamarindo, San José, Nosara, and the Central Valley?

Costa Rican property prices vary significantly by location and property type, with beachfront areas commanding premium pricing as of mid-2025.

Location	Houses (USD/m²)	Condos/Apartments (USD/m²)	Beachfront (USD/m²)
San José	$1,110-$1,180	$1,724-$2,343	N/A
Central Valley	$1,180	$2,025	N/A
Tamarindo	$2,200-$2,800	$2,500-$3,200	$2,725
Nosara	$2,800-$3,500	$3,000-$3,800	$3,298
Guanacaste (general)	$2,221	$2,896	$2,725-$3,298
Central Pacific	$1,500-$2,000	$1,800-$2,500	$2,500-$3,500
Caribbean Coast	$971	$1,133	$1,500-$2,500

Nosara represents the highest-priced market due to strict building regulations, environmental protection measures, and limited developable land. The area's emphasis on sustainable development and eco-tourism creates scarcity that supports premium pricing.

Tamarindo prices reflect its established infrastructure, international airport proximity, and mature tourism market. Properties within walking distance of the beach command significant premiums over inland locations.

Central Valley pricing remains moderate due to greater land availability and less tourism pressure, making it attractive for Americans seeking affordable entry points into the Costa Rican market.

Can Americans actually get a mortgage in Costa Rica, what are the typical interest rates and loan conditions, and are there any tips to qualify?

Americans can obtain mortgages in Costa Rica, but the process is more challenging and expensive than U.S. financing options.

Costa Rican banks typically require 25-50% down payments from foreign buyers, compared to 10-20% common in the United States. Interest rates range from 8-14% annually, significantly higher than current U.S. mortgage rates.

**Local Bank Requirements:**- Minimum 25% down payment (often 40-50% for foreigners)- Debt-to-income ratio below 30%- Proof of stable income for 2+ years- Costa Rican credit establishment (challenging for new foreign buyers)- Extensive documentation including apostilled financial records**Alternative Financing Options:**- Private lenders: Higher rates (12-18%) but more flexible qualification- Seller financing: Direct arrangements with property owners- International banks with Costa Rican operations- U.S. home equity lines of credit for cash purchases**Tips for Qualification Success:**1. Work with a mortgage broker experienced in foreign buyer loans2. Establish Costa Rican banking relationships before applying3. Provide extensive financial documentation translated into Spanish4. Consider larger down payments to improve approval odds5. Explore seller financing for unique properties or motivated sellers

Many American buyers find using U.S. financing (home equity, refinancing, or cash) more practical than navigating Costa Rican mortgage systems.

What are some common mistakes or legal pitfalls Americans make when buying property in Costa Rica and how can they be avoided?

Seven critical mistakes account for most American property buyer problems in Costa Rica, all preventable through proper preparation and professional guidance.

**Major Pitfalls and Prevention:**1. **Inadequate Title Verification:** Always conduct comprehensive title searches through the National Registry, verifying no liens, encumbrances, or ownership disputes exist2. **Using Seller's Attorney:** Hire your own independent legal counsel to avoid conflicts of interest that could compromise your protection3. **Skipping Property Surveys:** Boundary disputes are common; require current surveys and physical boundary verification before closing4. **Ignoring Zoning Restrictions:** Verify current zoning allows intended use and check for any planned zoning changes that could affect property value5. **Underestimating Total Costs:** Budget for 3-6% closing costs plus ongoing annual expenses; many buyers focus only on purchase price6. **Rushing Due Diligence:** Allow full 30-45 days for thorough investigation; pressure to close quickly often leads to expensive discoveries later7. **Corporate Structure Mistakes:** If using a corporation for ownership, ensure proper annual compliance to avoid dissolution and property loss

Environmental regulations add another layer of complexity, particularly near coastlines where maritime zone laws restrict development and ownership options.

Water rights verification is crucial for rural properties, as Costa Rica separates land ownership from water access rights in many areas.

It's something we develop in our Costa Rica property pack.

How is rental income from Costa Rican property taxed for Americans, and do I need to declare it in the U.S. as well?

American property owners face dual taxation obligations for Costa Rican rental income, requiring compliance with both countries' tax systems.

In Costa Rica, rental income is subject to a 15% withholding tax on gross rental income for non-resident property owners. Resident Americans may qualify for lower rates by filing annual tax returns and claiming allowable deductions for property maintenance, management, and depreciation.

The United States requires Americans to report worldwide income, including Costa Rican rental income, on their federal tax returns regardless of where they live. This creates potential double taxation scenarios that can be partially mitigated through foreign tax credits.

**Key Tax Considerations:**- Costa Rica: 15% withholding tax on gross rental income (non-residents)- United States: Full rental income taxable at ordinary income rates- Foreign Tax Credit: May offset some double taxation- Deductions: Property expenses, depreciation, management fees- Reporting Requirements: Form 1040 Schedule E, potentially Form 8938 for foreign assets

Many American owners establish Costa Rican tax residency to access lower tax rates and deduction opportunities, though this requires spending significant time in Costa Rica annually.

Professional tax advice from advisors familiar with both countries' systems is essential for optimizing your tax position and ensuring compliance with all reporting requirements.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Nestmann - Costa Rica Property Ownership Laws for US Citizens
2. TheLatinvestor - Costa Rica Buying Property American
3. RE/MAX Ocean Surf - Buying Property Costa Rica
4. Living Costa Rica - How to Buy Property Remotely
5. Exclusive Homes Costa Rica - Finding Real Estate Attorney
6. Blue Zone Legal - Legal Tips Foreign Investors
7. Wise - Getting a Mortgage in Costa Rica
8. Tropical Realty Costa Rica - Costs of Owning Property
9. Costa Rica Law - Real Estate Market Prices 2025
10. Global Property Guide - Costa Rica Rental Yields