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
Costa Rica is one of the most popular destinations in Latin America for American buyers looking for a home abroad, and the rules around foreign property ownership there are more open than most people expect.
We constantly update this blog post so the information you read here reflects the latest laws, tax rates, and banking requirements as of early 2026.
Below, we walk you through everything: who can buy, what taxes you will pay, how mortgages work for US citizens, and what the IRS expects from you.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Costa Rica.
Can a US citizen legally buy residential property in Costa Rica right now?
Can I buy a home in Costa Rica as a US citizen in 2026?
As of early 2026, US citizens can legally buy residential property in Costa Rica (houses, condos, and residential land) in their own name, using the same property registration system that Costa Rican nationals use.
The standard buying process involves hiring a Costa Rican notary (who handles the legal transfer), conducting a title search at the National Registry, signing a purchase agreement, and then recording the new deed, which is straightforward and very similar to how locals buy property in Costa Rica.
The one big exception that catches many American buyers off guard is the Zona Maritimo Terrestre (the coastal zone): if the property sits within 200 meters of the high-tide line, you typically do not get full ownership but instead hold a concession (a long-term lease-like right) under Costa Rica's Law 6043, which comes with specific restrictions for foreigners, including a minimum residency requirement of five years before a concession can be granted.
By the way, we've written a blog article detailing all the foreigner rights regarding properties in Costa Rica.
Are there many Americans buying property and living in Costa Rica in 2026?
As of early 2026, an estimated 70,000 to 120,000 Americans live in Costa Rica according to U.S. State Department and expat community estimates, making it one of the largest American expat populations in all of Latin America.
The highest concentrations of American property owners in Costa Rica are in the Guanacaste beach towns (Tamarindo, Flamingo, Playas del Coco), the Central Pacific coast (Jaco, Manuel Antonio, Dominical), and the upscale suburbs of the Central Valley like Escazu and Santa Ana near San Jose.
The top three reasons Americans choose to buy property in Costa Rica are the significantly lower cost of living compared to most US states, the high-quality and affordable healthcare system, and the country's political stability combined with its welcoming "pura vida" culture.
The American expat community in Costa Rica has been steadily growing for over a decade, driven by the rise of remote work, the appeal of retiring on a lower budget, and the fact that major Costa Rican banks have well-established lending pathways specifically designed for US and Canadian buyers.
Do foreigners have the same buying rights as locals in Costa Rica?
For standard titled residential property in Costa Rica (which covers most homes, condos, and inland land), foreign buyers, including Americans, have essentially the same purchasing rights as Costa Rican citizens, with no additional taxes or restrictions based on nationality.
The main restriction applies to beachfront property inside Costa Rica's Zona Maritimo Terrestre: in this 200-meter coastal strip, foreigners who have not been Costa Rican residents for at least five years cannot receive a concession, and companies that are more than 50% foreign-owned face the same limitation under Ley 6043.
We cover all these things in length in our pack about the property market in Costa Rica.
Can I buy property in Costa Rica without a residence permit?
Yes, you do not need a Costa Rican residence permit to buy residential property in Costa Rica, and many American buyers complete their purchase while still living full-time in the United States.
The process for buying property in Costa Rica while living abroad typically involves hiring a local notary and attorney, granting a power of attorney so someone can sign documents on your behalf, and wiring funds from your US bank to an escrow or trust account in Costa Rica.
Buying a home in Costa Rica does not automatically grant you a visa or residency, although owning property can support your application for certain residency categories (like the "rentista" or "inversionista" visa), so it is not a guaranteed path to legal residency on its own.
The main practical challenge non-resident buyers face in Costa Rica is managing the banking and compliance side remotely, because transferring large sums internationally, opening a local bank account for ongoing expenses, and coordinating with local professionals all require careful planning and documentation.
Can US citizens own land in Costa Rica?
Yes, US citizens can own titled land outright in Costa Rica, and the land is registered in their name at the National Registry just like it would be for a Costa Rican citizen.
In Costa Rica, the key distinction is between "titled property" (full ownership, recorded in the public registry, freely bought and sold) and "coastal concession property" (a long-term use right granted by the municipality under strict conditions, which can expire and must be renewed), and foreign buyers should always verify which type applies before making an offer.
The specific geographic zone where foreign land ownership is restricted in Costa Rica is the Zona Maritimo Terrestre, which runs 200 meters inland from the high-tide line along both the Pacific and Caribbean coasts, and within this strip, foreigners without five years of residency cannot hold a concession.
Getting surprised by hidden fees is one of the pitfalls people face when buying real estate in Costa Rica.
What documents will I need to buy in Costa Rica?
To buy residential property in Costa Rica as a US citizen, you will generally need your valid passport, proof of funds or source of funds documentation, recent bank statements, bank reference letters, and (if signing remotely) a notarized power of attorney.
A Costa Rican tax ID number is not strictly required to complete the purchase itself, but it becomes very helpful (and sometimes necessary) if you open a local bank account, set up utility services, or deal with ongoing tax obligations like the annual municipal property tax.
A local bank account in Costa Rica is not legally mandatory to buy property, but most foreign owners find it practically essential for paying recurring expenses like property taxes, HOA fees, utilities, and insurance without relying on international wire transfers every time.
Banks and notaries in Costa Rica will typically ask foreign buyers for proof of where the purchase funds are coming from (bank statements, income documentation, or investment account records), and while a local address is not required to buy, having one helps with bank KYC (know-your-customer) processes and service setup.
We have a whole section dedicated to all the documents you need in our Costa Rica property pack.
Can a foreign-owned company buy property in Costa Rica?
Yes, foreign-owned companies can legally buy residential property in Costa Rica, and many transactions are structured through Costa Rican corporate entities like the "Sociedad Anonima" (S.A.) or "Sociedad de Responsabilidad Limitada" (S.R.L.).
Americans commonly use S.A.-type structures in Costa Rica for estate planning flexibility, shared ownership among family members, or privacy, but this approach has become less popular in recent years as Costa Rica has increased corporate reporting requirements and annual fees (around $120 per year for inactive holding companies).
Owning property through a company in Costa Rica generally does not lower your main transaction taxes, because the 1.5% transfer tax and standard closing costs apply to the property regardless of whether the buyer is an individual or a corporation, and the company structure can actually add ongoing compliance costs both in Costa Rica and with the IRS.
The main drawback of using company ownership for residential property in Costa Rica is the added legal and administrative complexity: you need to maintain the company in good standing, file annual corporate tax returns, pay the annual corporate fee, and if the property is in the coastal concession zone, a company that is more than 50% foreign-owned cannot receive a concession at all.
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What taxes and fees will I pay in Costa Rica in 2026?
What are buyer taxes in Costa Rica in 2026?
As of early 2026, the main buyer tax when purchasing property in Costa Rica is the property transfer tax of 1.5% of the purchase price (or the registered fiscal value, whichever is higher), so on a $200,000 home in Costa Rica that means roughly $3,000 in transfer tax (about 1.5 million colones or 2,550 euros).
The 1.5% transfer tax is the dominant component, but buyers should also know about the annual municipal property tax of 0.25% of the registered value and, for higher-value homes, the luxury home tax ("Impuesto Solidario") which in 2026 kicks in above a construction value of about 143 million colones (roughly $290,000) and is charged at progressive rates from 0.25% to 0.55%.
Buyer tax rates in Costa Rica do not differ for foreigners versus locals on standard titled property, and there is no surcharge for investment properties versus primary residences when it comes to the transfer tax, which makes Costa Rica's tax treatment of foreign buyers relatively straightforward compared to many other countries.
If you want to go into more details, we also have a page detailing all the property taxes and fees in Costa Rica.
What are other closing costs in Costa Rica in 2026?
As of early 2026, beyond taxes, buyers in Costa Rica should budget roughly 2% to 4% of the purchase price for non-tax closing costs, so on a $200,000 property that is about $4,000 to $8,000 (roughly 2 to 4 million colones, or 3,400 to 6,800 euros).
The main closing cost categories in Costa Rica include notary and legal fees (typically 1% to 1.5% of the property value), National Registry and stamp duties (around 0.5% to 0.8%), and due diligence items like title studies and municipal compliance certificates, while real estate agent commissions (usually 3% to 5%) are traditionally paid by the seller in Costa Rica rather than the buyer.
Among these, the notary/legal fee is sometimes negotiable depending on the complexity of the transaction, and some due diligence costs (like independent surveys or environmental checks) are optional but recommended, especially for rural or coastal properties in Costa Rica.
The single closing cost item that tends to surprise foreign buyers the most in Costa Rica is the notary's central role: unlike in the US where a notary simply witnesses signatures, a Costa Rican notary is a licensed attorney who drafts the transfer deed, handles registry filings, and collects taxes on behalf of the government, which means their fee is a professional legal fee, not just a small stamp cost.
Are there hidden fees foreigners miss in Costa Rica right now?
Foreign buyers in Costa Rica commonly underestimate "hidden" costs that can add up to an extra 1% to 3% of the property value on top of standard closing costs, which on a $200,000 property means an additional $2,000 to $6,000 (roughly 1 to 3 million colones, or 1,700 to 5,100 euros) that many people do not plan for.
The top three unexpected fees that foreign buyers most often fail to budget for in Costa Rica are: the cost of setting up and maintaining a corporate structure if they buy through an S.A. (around $500 to $1,500 per year including the annual corporate fee, accounting, and legal compliance), municipal "garbage collection" and parks fees that are billed separately from property tax (typically $50 to $300 per year, or 25,000 to 150,000 colones), and the expense of translating, apostilling, and legalizing foreign documents needed for the purchase (often $300 to $800, or 150,000 to 400,000 colones).
After the purchase, the ongoing annual costs that foreign owners in Costa Rica most often underestimate are HOA/condo fees (which in popular expat areas like Escazu or Tamarindo can range from $100 to $500 or more per month), the luxury home tax if their property crosses the 143-million-colones threshold (which can add $700 to $3,000 per year depending on value), and property management fees if they are not living in Costa Rica full-time (commonly 10% to 15% of rental income or a flat monthly fee).
Getting surprised by hidden fees is one of the pitfalls people face when buying real estate in Costa Rica.
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.
Can I get a mortgage as a US citizen in Costa Rica in 2026?
Do banks lend to US citizens in Costa Rica in 2026?
As of early 2026, several major banks in Costa Rica do lend to US citizens for residential property purchases, including both private banks like Scotiabank Costa Rica and BAC Credomatic, and some public banks, though the process involves more documentation and stricter requirements than what locals typically face.
US citizens are not treated better or worse than other foreign nationals in most cases, but they are often handled through more standardized compliance processes because Costa Rican banks have well-established underwriting paths for US and Canadian borrowers due to the volume of North American buyers in the market.
The main reason some banks in Costa Rica are cautious about lending to American borrowers specifically is the added compliance burden that comes with US regulations like FATCA, which requires foreign financial institutions to report on US account holders, making the paperwork heavier for both sides.
There is no published "approval rate" for US citizens applying for mortgages in Costa Rica, but experienced real estate attorneys and brokers generally estimate that well-prepared applicants (with strong income documentation, a solid down payment, and clean credit) have a good chance of approval at the larger banks, while those with incomplete paperwork or unusual income sources may struggle.
There is a full document dedicated to mortgage for foreigners in our pack covering the property buying process in Costa Rica.
What down payment do American people need in Costa Rica in 2026?
As of early 2026, most US citizens buying property in Costa Rica should plan for a down payment of around 30% of the purchase price as a realistic starting point, so on a $200,000 home in Costa Rica, that means roughly $60,000 upfront (about 30 million colones or 51,000 euros).
The typical down payment range for foreign buyers in Costa Rica runs from about 20% at the low end (for very strong borrower profiles) to 40% or more for higher-risk properties or less conventional income situations, with 30% being the most common planning number that banks and brokers cite for non-residents.
Yes, putting more money down generally improves your mortgage terms in Costa Rica: a larger down payment reduces the bank's risk, which can translate into a lower interest rate, a longer repayment term, or simply a faster and smoother approval process, especially for non-resident US buyers.
You can also read our latest update about mortgage and interest rates in Costa Rica.
What interest rates do US citizens get in Costa Rica in 2026?
As of early 2026, the typical mortgage interest rate range for US citizens buying property in Costa Rica is roughly 7% to 9% for USD-denominated loans and 7.5% to 10% for loans in Costa Rican colones, depending on the bank, the borrower's profile, and the property.
Interest rates for foreign buyers in Costa Rica are generally similar to rates offered to locals for comparable loan products, though non-residents may end up at the higher end of the range because banks factor in the added risk of lending to someone who lives outside the country.
Both fixed-rate and variable-rate mortgages are available in Costa Rica, but variable-rate loans tied to a reference rate (like the Costa Rican central bank's "tasa basica pasiva" or a US prime rate for dollar loans) are quite common for foreign buyers, with typical terms running 15 to 30 years.
The single biggest factor that affects the interest rate a US citizen will be offered in Costa Rica is the currency of the loan: dollar-denominated mortgages in Costa Rica tend to carry slightly lower rates than colones-denominated ones, but choosing colones means accepting exchange-rate risk if your income is in US dollars.
Can I use US income to qualify in Costa Rica right now?
Yes, Costa Rican banks routinely accept US-sourced income for mortgage qualification, and it is the standard basis for non-resident US buyers since they earn their money in the United States.
Banks in Costa Rica typically require American applicants to provide their last two years of US tax returns (sometimes verified directly with the IRS), recent pay stubs or an employer income letter for salaried workers, and two to three months of bank statements showing consistent deposits and available assets.
If standard W-2 or 1099 documentation is not sufficient (for example, if you are self-employed or earn income from investments), some Costa Rican banks will consider alternative verification methods like CPA-prepared financial statements, proof of rental income from US properties, or evidence of pension and Social Security payments.
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How do US taxes interact with owning property in Costa Rica?
Do I have to declare the property to the IRS from Costa Rica?
Owning a personal home in Costa Rica does not by itself create a specific IRS reporting obligation, because the IRS does not require you to file a special form just because you hold foreign real estate in your own name.
However, the financial activity around the property can trigger US reporting requirements: if you open a Costa Rican bank account (very common for paying property taxes and utilities), you may need to file an FBAR (FinCEN Form 114) if your foreign account balances exceed $10,000 at any point during the year, and you may need to file Form 8938 (FATCA) if your foreign financial assets exceed the applicable threshold.
Simply owning property in Costa Rica does not trigger FBAR or FATCA reporting on its own; it is only when you earn rental income, sell the property for a gain, or hold foreign financial accounts connected to the property that US tax reporting obligations come into play.
Will I pay tax twice in the US and Costa Rica in 2026?
As of early 2026, there is a real risk of being taxed in both countries if you earn income from your Costa Rica property (such as rental income or capital gains on a sale), because the US taxes its citizens on worldwide income and Costa Rica taxes income that originates within its borders.
As of early 2026, the United States and Costa Rica do not have a comprehensive income tax treaty, which means there is no bilateral agreement to automatically prevent double taxation, according to the IRS's official treaty list.
Without a treaty, the main tool to avoid paying tax twice is the US Foreign Tax Credit (Form 1116), which lets you offset taxes you paid to Costa Rica against your US tax bill on the same income, so if you pay Costa Rican tax on rental income, you can generally claim that amount as a credit on your US return.
Whether Costa Rican property taxes are deductible on your US federal return depends on your specific filing situation and current US tax law (the rules around foreign property tax deductions have changed in recent years), so this is best treated as a question for your US CPA rather than a guaranteed benefit.
Do I need FATCA reporting when buying in Costa Rica?
Buying a home in Costa Rica does not usually trigger FATCA (Form 8938) reporting on its own, because a personally-owned foreign home is not a "specified foreign financial asset" under IRS rules; it is the financial accounts and entities connected to the purchase that can create the obligation.
FATCA reporting kicks in when your specified foreign financial assets exceed $50,000 on the last day of the tax year (or $75,000 at any point during the year) for single filers living in the US, with higher thresholds for married filers and those living abroad; common triggers for Costa Rica buyers include local bank accounts and ownership stakes in Costa Rican companies used to hold property.
FATCA (Form 8938, filed with your tax return) and FBAR (FinCEN Form 114, filed separately) both cover foreign financial accounts, but they have different thresholds, different filing deadlines, and go to different agencies: FBAR has a $10,000 aggregate balance trigger and goes to FinCEN, while FATCA has higher thresholds and is filed with the IRS as part of your tax return.
Consulting a US CPA before buying property in Costa Rica is strongly recommended if you plan to open local bank accounts, buy through a corporate structure, rent the property out, or make large cross-border wire transfers; the key questions to ask are: "What forms will I need to file?", "How do I claim the Foreign Tax Credit?", and "Does my corporate structure create additional US reporting?"
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Costa Rica. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Costa Rica, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why we trust it | How we used it |
|---|---|---|
| Costa Rica Coastal Law (Ley 6043) | It is the primary law governing coastal property rights in Costa Rica. | We used it to explain the difference between titled ownership and coastal concessions. We also relied on it to detail the specific restrictions foreigners face in beachfront areas. |
| Costa Rica Ministry of Finance (Hacienda) - Luxury Home Tax 2026 | It is the government's official 2026 tax table for the luxury home tax. | We used it to state the exemption threshold and progressive rates for 2026. We also used it to explain when the annual luxury tax applies to a residential home in Costa Rica. |
| Costa Rica Central Bank (BCCR) - Lending Rates | It is the official central bank statistical series on mortgage rates. | We used it to anchor realistic mortgage interest rate estimates for early 2026. We also used it to compare colones vs dollar mortgage rate tradeoffs for foreign buyers. |
| Scotiabank Costa Rica - Non-Resident Mortgage Requirements | It is a major bank's official checklist for non-resident borrowers. | We used it to show what Costa Rican banks actually ask US citizens for. We also used it to keep the "documents you need" section practical and grounded in reality. |
| BAC Credomatic - Mortgage Products | It is an established Costa Rican bank's published product guidance. | We used it as a reality check on down payment expectations and mortgage terms. We triangulated it against BCCR rate data and other bank requirements for foreign buyers. |
| Costa Rica Transfer Tax Law (Ley 6999) | It is the legal text that establishes the property transfer tax rate. | We used it to anchor the 1.5% transfer tax rate in a primary legal source. We then cross-checked the final buyer cost estimate using multiple independent summaries. |
| Deloitte - Costa Rica Tax Highlights | It is a top-tier global advisory firm's standardized country tax summary. | We used it as an independent cross-check on the overall tax landscape. We compared our buyer cost ranges against Deloitte's summary to avoid relying on a single interpretation. |
| BDO - Costa Rica Tax Fact Sheet | It is a global accounting firm with a consistent country-by-country methodology. | We used it to cross-check transfer and transaction costs independently. We treated it as triangulation alongside legal texts and other professional summaries. |
| US IRS - Income Tax Treaties List | It is the IRS's official reference for all US tax treaties. | We used it to confirm there is no US-Costa Rica income tax treaty as of 2026. We also used it to set expectations about relying on foreign tax credits rather than treaty protections. |
| FinCEN - FBAR Filing Requirements | It is the US Treasury bureau that administers foreign account reporting. | We used it to explain that FBAR applies to financial accounts, not to owning a home. We also used it to highlight the common trigger for Costa Rica buyers: local bank account balances. |
| IRS - FATCA / Form 8938 Guidance | It is the IRS's official guidance on foreign asset reporting for individuals. | We used it to explain what triggers FATCA reporting and what usually does not. We also used it to frame a simple decision rule for when to consult a US CPA before buying in Costa Rica. |
| PwC - Costa Rica Tax Summary | It is a leading advisory firm's up-to-date country tax overview. | We used it to confirm the 0.25% annual property tax rate and 1.5% transfer tax. We also used it as an additional cross-check for our closing cost and tax estimates. |
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