What are the property ownership laws in Costa Rica?

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?

THE LATIN INVESTOR

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 The Latin Investor, 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.

What legal rights do foreigners have when buying property in Costa Rica compared to locals?

Foreigners enjoy exactly the same property ownership rights as Costa Rican citizens under the country's "fee simple" title system.

You can buy, sell, rent, or inherit property without any discrimination based on nationality. Costa Rica operates under a constitutional framework that guarantees equal property rights regardless of citizenship status. This means you have full ownership rights, including the ability to modify, develop, or transfer your property as you see fit.

The only significant difference lies in certain restricted zones, particularly the Maritime Zone along the coastline. In these areas, foreigners face limitations on direct ownership of beachfront properties within the first 200 meters from the high tide line. However, these restrictions can often be navigated through legal structures like Costa Rican corporations or partnerships with local citizens.

As of June 2025, foreigners can own property through individual ownership, corporate structures, or trust arrangements. There are no quotas, caps, or approval processes that differentiate foreign buyers from local purchasers for most property types.

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

Are there restrictions on the types of properties foreigners can own, such as beachfront or agricultural land?

The primary restriction foreigners face involves beachfront properties within the Maritime Zone, which extends 200 meters inland from the high tide line.

Within this Maritime Zone, the first 50 meters constitute public land that cannot be owned by anyone. The next 150 meters, called the Restricted Zone, can only be accessed through concession leases from the government. Foreigners can hold a maximum of 49% ownership in these concession rights, requiring a Costa Rican partner or corporation to hold majority control.

For agricultural land, foreigners face no explicit ownership restrictions. You can purchase farms, ranches, or agricultural properties of any size throughout Costa Rica. However, you must comply with zoning regulations and environmental laws that may limit development or land use changes. Some protected areas or buffer zones around national parks may have additional restrictions on development activities.

Commercial and residential properties outside the Maritime Zone have no ownership restrictions. Foreigners can freely purchase condominiums, houses, office buildings, or retail spaces anywhere in the country's interior regions.

Do I need to be a resident or have a specific visa to buy property in Costa Rica?

No residency status or specific visa is required to purchase property in Costa Rica as a foreigner.

You can complete a property purchase using only a valid passport while on a tourist visa. Costa Rica's property laws are designed to attract foreign investment, so the government has eliminated residency requirements that exist in many other countries.

Tourist visas typically allow 90-day stays, which provides sufficient time to complete most property transactions. If your purchase process extends beyond this period, you can simply renew your tourist status or briefly exit and re-enter the country.

While residency isn't required for ownership, obtaining residency status can provide certain benefits for property owners, including simplified tax procedures and easier access to local banking services for mortgage financing.

Is it legally required to be physically present in Costa Rica during the purchase process?

Physical presence is not legally required for property purchases in Costa Rica, as transactions can be completed entirely through remote procedures.

The most common method for remote purchases involves granting a Power of Attorney (POA) to a licensed Costa Rican attorney. This POA must be notarized in your home country and then authenticated by the Costa Rican consulate before being used for property transactions.

Through a properly executed POA, your attorney can conduct all necessary procedures including property inspections, title verification, contract negotiations, fund transfers, and deed signing at the National Registry. Modern technology allows you to review documents, approve terms, and monitor progress through secure digital platforms.

Many foreign buyers choose to visit Costa Rica at least once during the process to personally inspect the property and meet with their legal team, but this remains optional rather than mandatory.

What are the step-by-step legal procedures and required documents for purchasing property in Costa Rica?

The Costa Rican property purchase process follows a structured seven-step procedure that typically takes 30-60 days to complete.

Step	Procedure	Timeline
1. Property Selection	Work with licensed agent to identify suitable properties	1-4 weeks
2. Letter of Intent	Submit non-binding proposal outlining purchase terms	1-3 days
3. Due Diligence	Title verification, survey, property inspection	1-2 weeks
4. Escrow Setup	Secure funds with licensed escrow agent	2-5 days
5. Contract Signing	Execute purchase agreement before notary	1-2 days
6. Deed Transfer	Complete ownership transfer at notary office	1 day
7. Registry Filing	Register transfer deed with National Registry	1-2 weeks

Essential documents required include a valid passport, Power of Attorney (for remote transactions), proof of funds through bank statements, Tax ID (NITE) registration for non-residents, and a current property survey verifying boundaries and improvements.

Is hiring a lawyer mandatory under Costa Rican law when buying real estate?

While Costa Rican law does not make attorney representation legally mandatory for property purchases, hiring a qualified lawyer is strongly recommended and considered essential for protecting your interests.

A licensed Costa Rican attorney serves several critical functions including conducting comprehensive title studies to verify clear ownership, checking for liens, encumbrances, or legal disputes, reviewing and negotiating purchase contracts, ensuring compliance with zoning and environmental regulations, and managing the deed transfer and registry filing process.

The attorney also serves as your representative if you're purchasing remotely through a Power of Attorney. They coordinate with real estate agents, surveyors, escrow agents, and government offices to ensure all legal requirements are met throughout the transaction.

Legal fees typically range from 1% to 1.5% of the property value, which represents a small investment considering the potential financial losses from legal complications or fraud that could occur without proper representation.

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

Can foreigners access mortgage financing in Costa Rica?

Foreigners can access mortgage financing in Costa Rica, though the process is more challenging and expensive compared to financing in their home countries.

Lender Type	Down Payment	Interest Rate
Local Banks	30-50%	8.5-10%
Private Lenders	30%	8-16%
Owner Financing	50%	6-9%
Developer Financing	20-30%	7-12%
Credit Unions	25-40%	9-13%

Local banks typically require substantial documentation including proof of income for the past two years, credit history verification, bank statements, employment verification, and often a Costa Rican guarantor. The approval process can take 60-90 days and may require establishing a banking relationship before applying.

Private lenders offer more flexibility but charge higher interest rates. Alternative financing options include self-directed IRA investments, home equity loans from your home country, or owner-financing arrangements directly with sellers.

What taxes, fees, and legal costs are involved in purchasing and reselling property in Costa Rica?

Total closing costs for purchasing property in Costa Rica typically amount to approximately 4% of the property's purchase price.

1. **Transfer Tax**: 1.5% of the declared property value, paid to the government2. **Legal and Notary Fees**: 1% to 1.5% of property value for attorney services3. **Property Survey**: $500 to $1,500 depending on property size and complexity4. **Property Inspection**: $650 to $1,000 for professional evaluation5. **Escrow Services**: $400 to $1,200 based on transaction value6. **Corporation Setup** (if applicable): $750 to $1,500 for legal entity creation7. **Registry Filing Fees**: $200 to $500 for document recording8. **Municipal Permits**: $100 to $300 for local compliance verification

When reselling property, sellers face a 15% capital gains tax on profits, calculated as the difference between purchase and sale prices. Non-resident sellers are subject to a 2.5% withholding tax that buyers must deduct from the purchase price and remit to tax authorities.

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 are the capital gains and income tax rules for foreigners owning rental property in Costa Rica?

Costa Rica applies progressive tax rates to rental income for foreign property owners, with specific exemptions and requirements that vary based on rental duration and income levels.

For rental income, the first ₡3.8 million (approximately $7,600) annually is tax-exempt for non-residents. Income above this threshold faces progressive tax rates ranging from 10% to 25% depending on total earnings. Short-term rentals under 30 days are subject to an additional 13% Value Added Tax (VAT) that must be collected from guests and remitted monthly.

Capital gains tax applies at a flat 15% rate on profits from property sales. The taxable gain is calculated as the difference between the sale price and the original purchase price, adjusted for documented improvements and closing costs. Non-resident sellers face an additional 2.5% withholding tax that buyers must deduct from the purchase price.

Property owners also pay annual property taxes at 0.25% of the registered property value. This tax is based on the municipality's assessed value, which may differ from market value.

Foreign owners must obtain a Tax ID (NITE) and file annual tax returns if generating rental income, even if total earnings fall below the exemption threshold.

Which areas of Costa Rica have the strongest legal and financial indicators for capital appreciation, rental yield, and livability?

San José and surrounding metropolitan areas offer the highest rental yields at 8.25% to 8.6%, driven by strong urban demand and limited housing supply.

The Central Valley region, including Escazú, Santa Ana, and Rohrmoser, provides excellent capital appreciation potential due to proximity to international businesses, high-quality infrastructure, and established expatriate communities. These areas offer strong legal protections, well-documented property titles, and sophisticated real estate markets.

Coastal areas like Tamarindo and Nosara generate attractive rental yields of 7% to 10%, particularly for vacation rental properties. Guanacaste Province benefits from tourism infrastructure development and direct international flights, supporting both short-term rental income and long-term appreciation.

Manuel Antonio and Jaco offer balanced investment opportunities with 6% to 8% rental yields and steady appreciation driven by tourism growth and improved highway access from San José.

For livability, areas with the strongest legal frameworks include established developments in Atenas, Grecia, and Ciudad Colón, which offer lower crime rates, reliable utilities, and proximity to quality healthcare facilities.

What are the most common legal pitfalls foreigners make when buying property in Costa Rica?

The most frequent and costly mistake foreign buyers make is conducting inadequate due diligence on property titles and legal status.

1. **Skipping comprehensive title studies** that verify clear ownership and identify liens, encumbrances, or boundary disputes2. **Misunderstanding Maritime Zone restrictions** and purchasing beachfront property without proper concession agreements3. **Failing to verify zoning compliance** and environmental permits for intended property use4. **Using unlicensed or inexperienced attorneys** who lack expertise in real estate transactions5. **Not conducting professional property surveys** to confirm boundaries and identify encroachments6. **Underestimating total transaction costs** and tax obligations for non-residents7. **Rushing through the purchase process** without allowing sufficient time for proper legal review8. **Ignoring utility access and infrastructure limitations** in remote or developing areas

Many foreigners also make the mistake of purchasing property through verbal agreements or informal contracts that lack legal enforceability. Costa Rican law requires written contracts and formal registration procedures that must be followed precisely to ensure valid ownership transfer.

Environmental compliance represents another common oversight, as many properties require specific permits for development, septic systems, or water usage that foreign buyers may not anticipate.

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

How is property ownership legally recorded in Costa Rica and what protections exist against fraud?

Property ownership in Costa Rica is legally recorded through the National Registry system, which maintains comprehensive records of all real estate transactions, ownership transfers, liens, and encumbrances.

The registry operates on a "folio real" system where each property receives a unique identification number linking all legal documents, surveys, and ownership history. This system provides several layers of fraud protection including mandatory notarization of all ownership transfers, public access to title searches and ownership verification, automatic recording of liens and legal disputes, and standardized procedures for deed registration.

Before completing any transaction, buyers can conduct thorough title studies through the Public Registry to verify current ownership, identify outstanding debts or legal claims, confirm property boundaries and survey information, and check compliance with zoning and environmental regulations.

Additional fraud protection measures include mandatory escrow services for fund transfers, professional survey requirements to confirm property boundaries, attorney oversight of all legal documentation, and standardized forms and procedures that reduce opportunities for document manipulation.

The registration system also provides legal recourse through the courts if disputes arise, though prevention through proper due diligence remains the most effective protection strategy.

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. Coldwell Banker Samara - Complete Property Buying Process Guide
2. Coldwell Banker Samara - Real Estate Laws Guide
3. Quatro Legal - Non-Resident Property Ownership
4. Century 21 Ballena Properties - Beachfront Property Ownership
5. The Latin Investor - Buying Property as American
6. Costa Rica Real Estate Service - Purchase Process
7. Costa Rica Law - Top Mistakes to Avoid
8. Wise - Getting a Mortgage in Costa Rica
9. OSA Property Management - Rental Income Reporting
10. The Latin Investor - Housing Market Costa Rica