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
If you're considering investing in Costa Rica's property market or planning to relocate to this tropical paradise, you'll find a welcoming environment for American buyers.
Costa Rica offers stable property rights for foreigners, diverse locations from bustling cities to pristine beaches, and a thriving expat community. This guide answers the most critical questions American buyers have about purchasing property in Costa Rica as we reach mid-2025.
If you want to go deeper, you can check our pack of documents related to the real estate market in Costa Rica, based on reliable facts and data, not opinions or rumors.
Americans can own property in Costa Rica with virtually identical rights to citizens, except in the Maritime Zone, and no visa or residency is required for purchase.
The property market offers average rental yields of 7.8% nationally, with popular investment areas including Guanacaste beaches, Central Valley urban centers, and the emerging South Pacific region.
| Topic | Key Information |
|---|---|
| Foreign Ownership Rights | Americans can own property with same rights as locals (except Maritime Zone) |
| Visa Requirements | No visa or residency required to purchase property |
| Remote Purchase | Yes, entire process can be handled remotely with Power of Attorney |
| Legal Representation | Lawyer (notario público) is mandatory for all transactions |
| Property Tax | 0.25% of registered value annually |
| Popular Regions | Guanacaste (beaches), Central Valley (urban), South Pacific (nature) |
| Average Rental Yields | 7.8% nationally as of Q2 2025 |
| Mortgage Access | Available but challenging; most foreigners buy cash |
| Capital Gains Tax | 10-15% on property sale profits |
| Transfer Tax | 1.5% of purchase price at closing |
| US Tax Obligations | Must report worldwide income including Costa Rica rental income |
| Common Pitfalls | Skipping due diligence, Maritime Zone confusion, using seller's lawyer |
Can Americans own property in Costa Rica with the same rights as locals?
Yes, Americans can own property in Costa Rica with virtually identical rights to Costa Rican citizens.
You can hold property titles in your own name, buy multiple properties, and there are no minimum investment requirements. This makes Costa Rica one of the most foreigner-friendly real estate markets in Latin America. The property ownership rights extend to both residential and commercial properties, and you can freely sell, lease, or inherit your property just like a Costa Rican citizen would.
The only significant restriction applies to the Maritime Zone - the 200-meter strip along the coastline. Within this zone, the first 50 meters from the high tide line is public land that cannot be owned by anyone, ensuring beach access remains open to all. The next 150 meters can only be leased through government concession, and these concessions are restricted to foreigners who have lived in Costa Rica for at least five years.
Beyond the Maritime Zone, Americans enjoy complete property rights, including the ability to subdivide land, develop properties, and conduct business operations. The Costa Rican constitution specifically protects foreign property ownership, and these rights have remained stable for decades, contributing to the country's reputation as a secure investment destination.
Unlike some other Central American countries, Costa Rica doesn't require property to be held through a corporation or trust, though many buyers choose this structure for estate planning purposes.
Do I need residency or a special visa to buy property in Costa Rica?
No residency or special visa is required to purchase property in Costa Rica.
You can buy property as a tourist with just your passport, making the process remarkably straightforward for American citizens. This policy reflects Costa Rica's welcoming stance toward foreign investment and has been a key factor in attracting international buyers to the country. Whether you're on a 90-day tourist visa or just visiting for a week, you have the legal right to purchase property.
While property ownership doesn't automatically grant residency, if you invest $150,000 or more in real estate, you can apply for Investor Residency status. This is completely optional - many Americans own property in Costa Rica without ever becoming residents. The Investor Residency provides certain benefits, including the ability to work in Costa Rica and easier entry/exit procedures, but it's not necessary for property ownership or rental income generation.
Some buyers mistakenly believe that purchasing property provides a path to citizenship or permanent residency. While the investment can support a residency application, the two processes are entirely separate. Property ownership alone doesn't affect your immigration status or extend your tourist visa beyond the standard 90-day period.
It's something we develop in our Costa Rica property pack.
Do I need to be in Costa Rica to complete the purchase?
Physical presence is not required - you can buy Costa Rican property entirely remotely.
The process works through a Power of Attorney (POA) granted to your Costa Rican lawyer, allowing them to act on your behalf throughout the transaction. This system has become increasingly sophisticated, with many law firms now conducting virtual consultations, digital document reviews, and online closings. All negotiations, due diligence, document reviews, and even the final closing can be handled without you stepping foot in Costa Rica.
Your attorney will handle every aspect of the transaction, from initial property inspections to signing the transfer deed at closing. The POA must be properly apostilled in the United States and translated into Spanish by an official translator. This document gives your lawyer specific powers related to the property transaction while limiting their authority to only those actions necessary for the purchase.
Many American buyers appreciate this flexibility, especially when purchasing investment properties or planning future retirement homes. The remote purchase option also proved invaluable during travel restrictions, and the systems developed during that time have made the process even more efficient.
However, while remote purchase is entirely legal and common, many buyers still choose to visit the property at least once before finalizing the transaction to get a feel for the neighborhood, local amenities, and overall atmosphere.
What's the complete process for buying property, and what documents do I need?
The property purchase process in Costa Rica follows a structured path designed to protect both buyers and sellers.
The journey begins with property selection, where working with a licensed real estate agent helps navigate the market and identify suitable properties. Once you've found your ideal property, you'll submit a Letter of Intent or Promise of Sale contract, typically accompanied by a small earnest money deposit. This initiates the due diligence period, during which your lawyer investigates the property's title, checks for liens, verifies surveys and boundaries, confirms zoning compliance, and assesses the overall property condition.
Following successful due diligence, funds are deposited with a trusted escrow agent to secure the transaction. The notary public then drafts the transfer deed (escritura), a comprehensive document detailing all aspects of the sale. At closing, both parties sign the deed - either in person or through representatives with Power of Attorney. Finally, the deed is filed with the National Registry to complete the transfer and update the official ownership records.
The documentation requirements are thorough but manageable. You'll need a valid passport as your primary identification, and if you're not attending closing in person, a properly apostilled Power of Attorney. Proof of funds through bank statements or financing approval letters demonstrates your ability to complete the purchase.
| Document Type | Details | Notes |
|---|---|---|
| Passport | Valid passport or residency card | Primary identification |
| Power of Attorney | If not present for closing | Must be apostilled |
| Proof of Funds | Bank statements or financing approval | Shows ability to purchase |
| Tax ID Number | NITE for non-residents, DIMEX for residents | Required for registration |
| Property Survey | Plano catastrado | Official survey document |
| Title Study | Estudio registral | Confirms clean title |
| Translated Documents | All foreign documents | Official Spanish translation required |
Is a lawyer required when buying property, and how do I choose one?
Yes, hiring a lawyer is absolutely required - not just recommended.
In Costa Rica, only a licensed attorney (notario público) can execute property transfers. This unique system means your lawyer serves dual roles: as your legal representative protecting your interests and as the official who prepares and registers the deed. This requirement isn't merely bureaucratic - it's designed to ensure all property transfers comply with Costa Rican law and that buyers receive proper legal protection throughout the process.
Choosing the right attorney is crucial for a successful property purchase. Start by verifying their registration with the Costa Rican Bar Association (Colegio de Abogados), which maintains a public database of all licensed attorneys. Look for lawyers specializing in real estate transactions with at least five years of experience handling foreign buyer transactions. English fluency is essential to avoid miscommunication on critical legal matters.
Request references from other American clients who have completed similar transactions. A reputable attorney will gladly provide contacts and examples of successful closings. Never use the seller's attorney, even if offered as a cost-saving measure - this creates an inherent conflict of interest that could jeopardize your purchase.
Attorney fees typically range from 1-2% of the property value, depending on the transaction's complexity. While this might seem substantial, remember that your lawyer handles all aspects of the transfer, from due diligence through registration, making it a worthwhile investment in protecting your interests.
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What are the tax obligations for Americans who own property in Costa Rica?
Property ownership in Costa Rica comes with tax obligations in both countries that buyers must understand and plan for.
In Costa Rica, the annual property tax is remarkably low at just 0.25% of the registered property value, making it one of the most affordable holding costs in Latin America. When purchasing, you'll pay a one-time transfer tax of 1.5% of the purchase price. Properties valued over approximately $230,000 face an additional luxury home tax ranging from 0.25% to 0.55%. If you sell the property, capital gains tax applies at 10-15% of the profit, with the rate depending on how long you've owned the property.
| Tax Type | Rate | Details |
|---|---|---|
| Annual Property Tax | 0.25% | Based on registered property value |
| Transfer Tax | 1.5% | Paid once at purchase |
| Luxury Home Tax | 0.25-0.55% | Properties over ~$230,000 |
| Capital Gains Tax | 10-15% | On sale profits, varies by holding period |
| Rental Income Tax | 0-25% | Progressive rates; first $7,000 exempt |
For US tax obligations, Americans must report all worldwide income on their tax returns, including any rental income generated from Costa Rican properties. If you maintain Costa Rican bank accounts exceeding $10,000 at any point during the year, you must file an FBAR (Foreign Bank Account Report). The FATCA requirements also apply if your total foreign assets exceed certain thresholds.
The US-Costa Rica tax treaty helps prevent double taxation, allowing you to claim foreign tax credits for taxes paid in Costa Rica. Given the complexity of international tax compliance, consulting with a US tax professional familiar with foreign property ownership is essential to ensure you meet all obligations and take advantage of available treaty benefits.
Where do most Americans buy property in Costa Rica, and why?
Americans gravitate toward four main regions in Costa Rica, each offering distinct advantages and lifestyle options.
Guanacaste Province on the Northwest Pacific Coast attracts the largest concentration of American buyers. Towns like Tamarindo, Nosara, Playa Flamingo, and Playa Hermosa offer world-class beaches, established expat communities, and convenient access through Liberia's international airport. The region's dry season from December to April provides nearly perfect weather, while the infrastructure caters specifically to international residents with English-speaking services, American-style amenities, and familiar retail options.
The Central Valley, encompassing San José's suburbs of Escazú, Santa Ana, and Heredia, appeals to buyers seeking urban conveniences. This region offers top-tier healthcare facilities, international schools, modern shopping centers, and a cooler climate due to its elevation. Many American professionals and families choose this area for its combination of First World amenities and easy access to government services.
The Southern Pacific Zone, including Dominical, Uvita, and Ojochal, attracts eco-conscious buyers and those seeking a more authentic Costa Rican experience. With pristine nature reserves, lower property prices, and emerging development, this region offers significant investment potential. The area maintains a quieter, more laid-back atmosphere while still providing essential services for expat living.
The Caribbean Coast, particularly Puerto Viejo and Cahuita, draws Americans seeking an alternative lifestyle. With its distinctive Afro-Caribbean culture, world-class surfing, and affordable property prices, this region offers a completely different experience from the Pacific side. The laid-back atmosphere and diverse international community create a unique living environment.
It's something we develop in our Costa Rica property pack.
Which areas offer the best potential for living, rentals, or appreciation?
Different Costa Rican regions excel in specific investment categories, allowing buyers to align their property choice with their primary goals.
For rental income generation, Tamarindo in Guanacaste leads with the highest tourism demand and an average price of $2,725 per square meter. The town's year-round tourist flow, diverse accommodation options, and established vacation rental infrastructure make it ideal for investors seeking consistent returns. Manuel Antonio offers similar advantages with strong occupancy rates throughout the year, benefiting from its famous national park and accessible location. The ultra-luxury market in Papagayo Peninsula commands premium rental rates, though with higher entry costs and a more selective clientele.
Quality of life considerations point toward different locations. Escazú and Santa Ana provide modern infrastructure, excellent healthcare facilities, abundant shopping options, and a thriving expat community, with average home prices around $476,075. Nosara has emerged as a wellness-focused community combining beautiful beaches with yoga retreats and health-conscious amenities, averaging $3,298 per square meter. The town of Atenas, known for having one of the world's best climates, offers small-town charm with easy Central Valley access at more affordable prices.
Capital appreciation potential is strongest in emerging markets. The South Pacific region, particularly Uvita and Dominical, experienced a remarkable 42% price increase in 2024-2025 as infrastructure improvements made the area more accessible. Nosara's limited inventory and strict eco-conscious development restrictions continue driving values upward. Playa Flamingo's new marina development is transforming the area into a premium destination, with property values expected to rise significantly as the project completes.
Each area's potential depends on your investment timeline, with established markets offering stability and emerging regions providing higher growth potential but with increased risk.
What are current property prices across major Costa Rican markets?
Property prices in Costa Rica vary significantly by region, reflecting local demand, development levels, and accessibility.
San José and the Central Valley show strong price growth, with properties averaging $2,343 per square meter and experiencing a 12% annual increase. The luxury segment in areas like Escazú has reached an average of $863,846, driven by demand for high-end amenities and security. This urban market benefits from steady demand from both local professionals and international buyers seeking city conveniences.
Guanacaste's beach towns command premium prices, with Tamarindo averaging $2,725 per square meter and typical homes ranging from $400,000 to $800,000. Nosara has emerged as one of the priciest markets at $3,298 per square meter, with average homes between $500,000 and $1,000,000. The limited inventory and development restrictions in Nosara continue pushing prices upward. Interestingly, Guanacaste overall saw a 36% price drop to an average of $967,506, primarily due to increased inventory in some overdeveloped areas.
| Location | Average Price per m² | Average Home Price | Market Trend |
|---|---|---|---|
| San José | $2,343 | $350,000-500,000 | 12% annual increase |
| Tamarindo | $2,725 | $400,000-800,000 | High demand, stable |
| Nosara | $3,298 | $500,000-1,000,000 | Limited inventory, rising |
| Central Valley | $1,500-2,000 | $476,075 average | 17% increase, luxury at $863,846 |
| Guanacaste Overall | $2,500-3,500 | $967,506 average | 36% drop due to inventory increase |
| South Pacific | $2,000-3,000 | $893,841 average | 42% increase, limited supply |
| Caribbean Coast | $1,200-1,800 | $250,000-400,000 | Steady growth |
The South Pacific region shows the strongest appreciation at 42%, with average prices reaching $893,841. This dramatic increase reflects improved infrastructure and growing recognition of the area's investment potential. The Caribbean Coast remains the most affordable option, with properties typically ranging from $250,000 to $400,000, offering excellent value for buyers seeking beachfront living on a budget.
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 rental yields and economic trends support the Costa Rica property market?
Costa Rica's property market shows strong fundamentals with attractive rental yields and positive economic indicators.
The country's average gross rental yield of 7.8% nationally as of Q2 2025 significantly outperforms many North American markets. San José leads with an 8.2% yield, driven by steady demand from business travelers and long-term corporate rentals. Guanacaste beach towns achieve 7.5-9% yields through vacation rentals, with peak season occupancy often exceeding 80%. These returns reflect Costa Rica's growing tourism sector and increasing expat population.
Tourism growth continues at an impressive 15% year-over-year, with new international flight routes improving accessibility from major US cities. The country's 3.5% GDP growth forecast for 2025 indicates economic stability, while political consistency and strong property rights maintain investor confidence. The influx of digital nomads has created a new rental market segment, with properties offering high-speed internet and workspace commanding premium rates.
Market dynamics vary by region but generally favor property owners. Guanacaste dominates short-term vacation rentals, with platforms like Airbnb and VRBO providing easy market access. The Central Valley excels in long-term expat rentals, particularly in gated communities with amenities. Eco-tourism drives South Pacific development, with sustainable properties achieving both higher rental rates and faster appreciation.
The combination of stable yields, growing tourism, and limited coastal development potential creates a favorable environment for property investment, particularly for Americans familiar with the culture and seeking geographic diversification.
Can Americans get mortgages in Costa Rica?
Mortgages are available to foreigners but remain challenging to obtain, with most American buyers opting for cash purchases.
Approximately 70-80% of American buyers purchase with cash due to strict lending requirements and complex documentation needs. Costa Rican banks view foreign borrowers as higher risk, resulting in more stringent qualification criteria. When financing is available, expect to provide 30-50% down payment, significantly higher than typical US requirements. Interest rates for dollar-denominated loans range from 7-12%, making financing less attractive than in the United States.
The documentation requirements can be overwhelming, including extensive income proof, bank statements, credit history translations, and proof of income source. Local banks like BAC San José and Banco Nacional occasionally lend to foreigners, but approval rates remain low. Private lenders offer an alternative with faster approval but higher rates of 10-15%, making them suitable only for short-term financing needs.
To improve your chances of mortgage approval, consider opening a Costa Rican bank account at least six months before applying, demonstrating financial ties to the country. Showing stable income for two or more years helps establish credibility. Some buyers successfully use the property itself as collateral or partner with a Costa Rican resident as a co-signer.
Seller financing represents another option, with some property owners willing to carry a note for qualified buyers. This arrangement often provides more flexible terms than traditional bank financing, though it requires careful legal documentation to protect both parties' interests.
It's something we develop in our Costa Rica property pack.
What mistakes do Americans commonly make when buying Costa Rican property?
Understanding common pitfalls helps buyers navigate the Costa Rican property market successfully.
The most serious mistake involves inadequate due diligence. Many buyers, enchanted by beautiful properties and eager sellers, skip comprehensive title searches or property inspections. This oversight can lead to discovering liens, boundary disputes, or structural issues after purchase. Always insist on a thorough title study (estudio registral), verify all survey boundaries match the property description, and conduct professional inspections regardless of the property's apparent condition.
Using the seller's attorney to save money ranks as the second most costly error. While it might seem efficient, this creates an inherent conflict of interest where the attorney cannot fully represent your interests. The few thousand dollars saved pale compared to potential losses from inadequate representation. Always hire your own independent attorney who answers solely to you.
Maritime Zone confusion causes significant problems for beachfront property buyers. Many Americans assume they can own beachfront property outright, not understanding the 200-meter coastal restriction. The first 50 meters from high tide remains public land forever, while the next 150 meters requires special concessions unavailable to most foreigners. This misunderstanding has led to invalid purchases and lost investments.
Buyers frequently underestimate total costs by budgeting only for the purchase price. Closing costs typically add 4-5% including transfer taxes, legal fees, and registration costs. Ongoing expenses like property taxes, HOA fees, maintenance, and property management for rentals can significantly impact investment returns. Creating a comprehensive budget prevents financial surprises.
Finally, many buyers mistakenly believe property purchase automatically grants residency rights. While you can apply for investor residency with a $150,000 property investment, the processes remain separate, and property ownership alone doesn't extend your tourist visa or provide work permits.
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.
Costa Rica's property market offers American buyers exceptional opportunities with strong legal protections, attractive rental yields, and diverse investment options from beachfront properties to mountain retreats.
Success in this market requires understanding the legal framework, working with qualified professionals, and avoiding common pitfalls, but the rewards include property in one of Latin America's most stable democracies with an established expat community and growing tourism sector.
Sources
- The Nestmann Group - Costa Rica Property Ownership Laws for US Citizens
- RE/MAX Blue Ocean - Understanding Property Laws in Costa Rica
- CBS Sunset Reef Realty - Property and Residency Requirements
- CRIE - Buying Property in Costa Rica for US Citizens
- Visit World Today - Property Purchase Guide for Foreign Nationals