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
Are you considering investing in Costa Rica’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Foreigners can own property in Costa Rica like locals, but beachfront properties are regulated by the Maritime Zone Law
Foreigners in Costa Rica can own property just like locals, which is a big plus for potential buyers.
However, if you're eyeing beachfront property, be aware of the Maritime Zone Law. This law means you can't own land within 200 meters of the high tide mark, though leasing is an option. So, if you're dreaming of a beach house, this is a key detail to keep in mind.
Many foreigners have had great success buying property here, often sharing their positive experiences. They emphasize the importance of understanding local laws and working with knowledgeable professionals. This approach can make your property purchase smooth and rewarding.
In Costa Rica, the real estate market is quite dynamic, with varied options from lush jungles to vibrant cities. Whether you're looking for a serene retreat or a bustling urban spot, there's something for everyone.
It's also worth noting that Costa Rica's property market has been attractive due to its stable political climate and growing economy. These factors contribute to a favorable environment for investment.
So, if you're considering buying property in Costa Rica, remember to do your homework and connect with local experts. This will help you navigate the process and find the perfect spot for your needs.
Sources: Gap Investments, CICSACR, Global Property Guide
2) Consider Costa Rica for stable investments, as its property market is less volatile than many other countries
Costa Rica's property market is known for its stability, making it a reliable choice for investors.
Unlike many other countries, property prices in Costa Rica have shown minimal fluctuations over the years. This trend is expected to continue, with a projected increase of 3% to 7% in 2025, thanks to high demand and limited supply.
Even during global economic downturns, Costa Rica's real estate market remains resilient. This is largely due to its booming tourism sector and favorable property laws for foreigners, which keep the market steady.
Foreign buyers play a crucial role in maintaining this stability. Costa Rica's allure as a tropical paradise with stable governance and a vibrant expat community continues to draw international investors, especially in coastal and tourist-friendly areas.
Additionally, low-interest rates on mortgages make properties more affordable, boosting demand and liquidity. In early 2024, this led to properties spending less time on the market.
Sources: Osa Tropical Properties, Coldwell Banker Tamarindo, World Bank Report
We made this infographic to show you how property prices in Costa Rica compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Work with a reputable local agent in Costa Rica, as the real estate market lacks transparency compared to other countries
Buying property in Costa Rica can be tricky because the real estate market lacks transparency.
Without a centralized MLS, finding properties isn't straightforward, so buyers often depend heavily on local real estate agents. A good agent with a strong network is key to navigating this market.
In 2023 and 2024, people noticed that similar properties could have wildly different prices. This often came down to the agent's skills in negotiation and marketing, making it crucial to have someone knowledgeable on your side.
Property valuation in Costa Rica can be subjective, with methods like the market method leading to inconsistencies. A reputable agent helps ensure properties are valued correctly and have clear titles.
Understanding these nuances gives you an edge, as the Costa Rican market isn't as straightforward as others. Working with a trusted local agent is essential.
Sources: Coldwell Banker Samara, We Love Costa Rica, Coldwell Banker Tamarindo
4) Consider the rainy season's impact on property access and appeal when timing your purchase in Costa Rica
In Costa Rica, the rainy season runs from May to November, and it can significantly impact property accessibility and appeal.
During this time, October is often the wettest month, leading to potential road closures and infrastructure challenges. This can make it tricky to reach certain properties, so timing your visit is key.
Interestingly, the rainy season is also known as the low season in the real estate market. Property prices tend to drop, and there are fewer buyers around, which means less competition. This could be a golden opportunity for those looking to snag a deal.
Realtors like Felicia Clarke recommend using this time to assess properties for durability. Check for roof leaks and water-related issues to ensure you're making a sound investment.
Environmental studies point out that heavy rainfall can affect land stability and erosion. This is crucial in areas prone to heavy rain, as it can impact property value and appeal.
May and November, known as shoulder seasons, also offer chances for negotiation. Savvy buyers can leverage these months to strike a better deal with sellers.
Sources: Flamingo Beach Realty, Osa Tropical Properties
5) Consider properties in Costa Rica’s Central Valley or Guanacaste for higher rental yields, as strong expat communities drive consistent demand
In 2023 and 2024, properties in Costa Rica's Central Valley and Guanacaste saw higher rental yields due to strong expat communities.
The Central Valley is a hotspot for expats, thanks to its pleasant weather and cultural attractions. This area boasts an average gross rental yield of 7.27%, with places like Heredia and Curridabat offering even more. San José, the capital, has a low vacancy rate of 3.8%, showing a strong demand for rentals.
Guanacaste, famous for its stunning beaches and national parks, is a magnet for tourists and expats alike. This constant influx keeps the rental market buzzing, with higher demand and yields as a result.
In these regions, the expat community plays a crucial role. They are drawn by the lifestyle and amenities, which in turn boosts the rental market. This means that investing in property here could be a smart move, as the consistent demand is likely to continue.
For those considering buying property, understanding these dynamics is key. The combination of expat interest and tourist appeal makes the Central Valley and Guanacaste particularly attractive for investors looking for steady rental income.
Sources: Global Property Guide, Mytanfeet, The Luxury Playbook
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Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
6) Factor in Costa Rica’s 1.5% property transfer tax, usually paid by the buyer, when budgeting
When buying property in Costa Rica, remember there's a 1.5% property transfer tax to consider.
This tax is based on the higher value between the sale price and the registered value of the property. It's a crucial part of the buying process because it ensures the change of ownership is legally recorded in the Public Registry.
Skipping this step isn't an option if you want the property to be officially yours. Real estate agents often stress the importance of including this tax in your budget planning.
They advise buyers to have enough funds ready to cover this expense, as it can be a significant cost in the property buying process. This tax is typically the buyer's responsibility, so it's wise to factor it into your financial plans early on.
Understanding these costs upfront can help you avoid surprises and ensure a smoother transaction. Financial guides frequently highlight the need to prepare for this tax to avoid any last-minute financial hiccups.
So, as you plan your purchase, make sure to account for this tax to keep your budget on track. Being prepared financially will make your property buying experience in Costa Rica much more enjoyable.
Sources: Taxes for Expats, Properties in Costa Rica, Costa Rica Guide
7) Consider properties with home office setups for long-term stays to attract digital nomads
Digital nomadism is booming, with more people working remotely while exploring the world.
In the U.S. alone, 17.3 million people embraced the digital nomad lifestyle by 2023, and this trend is only growing. As more folks ditch the office, they’re looking for places that offer long-term stays with home office setups. This shift means properties with dedicated workspaces are in high demand.
Remote work is now a top priority for many, with most workers preferring fully remote jobs. This change has sparked a need for homes that cater to remote work, making it a smart move to invest in properties with office spaces.
Costa Rica is a hot spot for digital nomads, thanks to its Digital Nomads Law offering tax perks and special visas. This has made the country even more attractive, boosting the local economy and increasing the number of short-term rentals.
With its stunning landscapes and friendly locals, Costa Rica is not just a vacation spot but a thriving hub for remote workers. The government’s initiatives have made it easier for digital nomads to settle in, creating a win-win for both the economy and property investors.
Investing in properties that cater to this growing trend can be a lucrative opportunity. As more people seek flexible living arrangements, having a home office setup is becoming a must-have feature.
Sources: Pumble, Central America, HR Tech Edge, EY Tax News, The Working Traveller
8) Consider properties near hot springs or yoga retreats to attract wellness tourists, as these are popular with international visitors
Wellness tourism is booming, and Costa Rica is at the heart of it.
Imagine owning a property near Costa Rica's famous hot springs or yoga retreats. The Global Wellness Institute highlights a massive growth in the wellness tourism industry, jumping from $435.7 billion in 2020 to $816.5 billion in 2022. This trend is only expected to continue, with projections reaching over $1.1 billion by 2025.
Costa Rica's allure lies in its stunning landscapes and commitment to sustainability. International visitors flock here for holistic practices and natural therapies, making it a prime spot for wellness-focused investments. The country's dedication to eco-friendly living enhances its appeal, drawing those who seek rejuvenation in nature.
Hot springs, especially around the Arenal Volcano, are a major draw. These natural wonders offer a unique blend of relaxation and adventure, surrounded by lush tropical flora and fauna. Properties in these areas are not just about owning real estate; they're about offering an experience that both locals and tourists crave.
Yoga retreats are another key attraction. They provide serene environments for meditation and self-discovery, attracting a diverse crowd looking for peace and balance. Investing in properties near these retreats can tap into a market eager for tranquility and wellness.
Owning a piece of this paradise means more than just a financial investment. It's about being part of a lifestyle movement that values health, nature, and sustainability. As wellness tourism continues to rise, properties in these areas are poised to become even more desirable.
Sources: Tico Times, Green Circle Experience, Costa Rica.org
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.
9) Expect transactions in U.S. dollars in tourist areas, which can benefit foreign investors
In Costa Rica, many property transactions are done in U.S. dollars, especially in popular tourist spots.
Places like San José, Tamarindo, Manuel Antonio, and La Fortuna see widespread use of U.S. dollars due to the influx of American tourists and expats. This makes it easier for foreign investors to navigate the market without worrying about currency exchange.
Real estate listings often come with prices set in U.S. dollars, providing a stable investment environment. This stability is a big draw for international buyers, as it minimizes exchange rate risks and simplifies cross-border transactions.
Foreign investors frequently share their experiences, noting the benefits of using U.S. dollars in property deals. They appreciate the reduced currency risk and the ease of handling international payments.
Historical trends show that property sales in tourist areas have long favored dollar transactions, reinforcing the currency's role in the market. This trend is supported by economic reports and real estate surveys.
Sources: Focus Economics, Vacations Costa Rica, Green Circle Experience
10) Be patient with Costa Rica’s slow legal process, despite its strong property rights framework
Buying property in Costa Rica comes with a strong legal framework that protects your investment.
The country's real estate laws are governed by the Costa Rican Civil Code, which ensures consistent enforcement of property rights. This is why Costa Rica ranks high in international property rights indices, reflecting a solid rule of law. The legal system is well-established, making property transactions generally reliable.
However, patience is key because the legal process can be slow. This isn't unique to Costa Rica; many countries with complex legal systems face similar challenges. Bureaucratic inefficiencies and local regulations can cause delays, as reported by expatriates and real estate agents.
One reason for these delays is a backlog of cases in Costa Rican courts. This can slow down property transactions, which is something foreign buyers often encounter. Understanding this aspect can help set realistic expectations when purchasing property.
Despite these challenges, the strong legal framework provides a sense of security. Knowing that your property rights are well-protected can make the wait worthwhile. It's a trade-off between time and the assurance of a robust legal system.
Sources: JD Supra, Trading Economics, BTI Project, Nikori Lifestyles
11) Consider properties with ocean views, as they tend to appreciate faster due to high desirability
In Costa Rica, properties with ocean views are in high demand.
Take the Central Valley, for example, where ocean-view properties are the priciest and quickest to sell. In San José, apartment prices jumped by 12.08% in June 2024, showing just how hot the market is for these views.
On the Central Pacific coast, places like Dominical, Uvita, and Ojochal are seeing double-digit growth in sales and rentals. Homes with ocean views here range from $250,000 to $3 million, a testament to their popularity and value.
Experts agree that waterfront properties are a stable investment, thanks to their unique charm and consistent demand. This makes them a safe bet for anyone looking to invest in real estate.
The rental market is also booming, with ocean-view properties commanding much higher rents than their non-ocean-view counterparts. In Escazú and Santa Ana, you can expect to pay between $1,500 and $4,000 a month for a home or apartment in a gated community.
Tourists and expats are flocking to coastal spots like Tamarindo, Santa Teresa, and Playa Flamingo, driving rapid growth in these real estate markets. The allure of beachfront living is hard to resist, making these areas prime targets for investment.
Sources: Costa Rica Real Estate: Market Overview 2024, The Real Estate Push for Waterfront Properties: What Buyers Need to Know, Costa Rica's Residential Property Market Analysis 2024
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12) Consider eco-friendly property investments in Costa Rica, as government incentives for sustainable development can lower costs
Costa Rica is a top destination for eco-friendly property investments thanks to its government incentives.
Imagine slashing your electricity bills by up to 80% with solar panels on your new property. Costa Rica's government is all in on sustainable development, offering tax breaks on imported gear like solar panels and wind turbines. Plus, they throw in grants and subsidies to make green building more affordable.
Eco-friendly properties are hot right now, with demand soaring due to both environmental concerns and these sweet government deals. You’ll notice more and more construction projects embracing green building practices, a trend that's catching the eye of both local and international investors.
Investing in properties with renewable energy solutions not only cuts costs but also aligns with Costa Rica's push for carbon neutrality. This makes such investments even more appealing, especially if you're keen on reducing your carbon footprint while saving money.
For those eyeing a property in Costa Rica, these incentives are a game-changer. They make it easier and cheaper to go green, which is a big win for your wallet and the planet. The government’s commitment to sustainability is a major draw for eco-conscious buyers.
So, if you're considering a move to Costa Rica, these eco-friendly incentives could be the perfect opportunity to invest in a sustainable future. The country’s focus on renewable energy and green construction is not just a trend; it’s a movement that’s here to stay.
Sources: Costa Rica Tax Incentives: A Comprehensive Guide, Costa Rica's Boom in New Construction Projects, OECD Environmental Performance Reviews: Costa Rica 2023
13) Conduct thorough due diligence on Costa Rican properties, as unclear titles and land disputes are common
When buying property in Costa Rica, ensure the title is clear to avoid complications.
Costa Rica's history of land disputes, like those with Nicaragua, highlights the importance of this. Even resolved disputes can signal potential ownership issues, so verifying property titles is crucial.
Unlike some countries, Costa Rica lacks customary title insurance. This means title issues are often discovered by notary publics during the closing process, not through insurance.
Having a reliable real estate agent and a notary public is essential. They can help thoroughly check the title before you make any purchase decisions.
In Costa Rica, due diligence is key to ensuring a smooth property transaction. This involves verifying all documents and understanding the local property laws.
Remember, land ownership can be complex in Costa Rica, so take the necessary steps to protect your investment.
Sources: BTI Transformation Index, Costa Rica Real Estate
14) Consider properties with reliable internet and modern amenities, as demand rises with remote work trends
Costa Rica is now a top choice for remote workers, thanks to its Digital Nomad Visa.
This visa lets you live and work in Costa Rica for up to a year, with a chance to extend. Because of this, more remote workers are flocking to Costa Rica, making it a vibrant hub for digital nomads.
With this influx, the need for high-speed internet has skyrocketed. Costa Rica's urban areas already boast a strong tech infrastructure, and rural areas are catching up fast. Properties with reliable internet are now in high demand, as remote workers prioritize staying connected.
Surveys show that digital nomads and expats prefer homes with modern amenities, especially those that support efficient remote work. The rise of coworking spaces and remote-friendly cafes in Costa Rica is also a big plus, offering the right setup for productivity.
For anyone considering a move, it's clear that properties with good internet and amenities are the way to go. The real estate market is responding to these needs, making it easier to find the perfect spot to work and live.
Sources: Rivermate, Creescapes, Holafly
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.
15) Be culturally sensitive, as local customs and negotiation styles in Costa Rica may differ from what you're used to
Buying property in Costa Rica can be a unique experience.
When you're negotiating, you might find that local customs and styles differ from what you're used to. For instance, foreign buyers often make the mistake of overestimating property values, leading to higher initial offers that aren't as competitive as those from locals. This can be a costly misstep.
One important custom to know is that closing costs are typically shared equally between the buyer and seller. This can have a big impact on your budget, so being aware of this can help you plan better and avoid surprises.
Many expatriates find that understanding these local customs and business practices can be tricky. The bureaucratic procedures in Costa Rica are often different from what you might expect, requiring a bit of patience and sometimes a good grasp of Spanish or a reliable translator.
It's not just about the money; knowing how things work locally can make the whole process smoother. For example, being aware of the importance of cultural sensitivity can be a real asset in negotiations and interactions.
So, if you're thinking about buying property in Costa Rica, remember that local knowledge is key to navigating the market successfully.
Sources: Playas del Coco Property, Offshore Freedom, Global Property Guide
16) Take advantage of Costa Rica’s lack of capital gains tax to boost your investment returns
Investing in Costa Rica's real estate is enticing because there's no capital gains tax on primary residences.
Imagine selling your property and keeping all the profits without sharing with the government. In recent years, Costa Rica's housing market has shown impressive growth. For instance, in 2024, apartment prices in San José jumped by 12.08% year-on-year, while house prices in Guanacaste soared by 38.15%. Such appreciation can really boost your returns.
Financial advisors often point out Costa Rica's tax perks, especially the capital gains tax exemption. This policy not only increases your net returns but also makes Costa Rica a hot spot for foreign investors looking for better profits.
Besides the tax benefits, Costa Rica offers a lifestyle that many find appealing. With its stunning beaches, lush rainforests, and friendly locals, the country is a magnet for expats. This influx of people keeps the demand for housing strong, further driving up property values.
Another insider tip: the rental market is thriving in popular tourist areas. Many investors buy properties to rent out to vacationers, providing a steady income stream. This is especially true in regions like Tamarindo and Manuel Antonio, where tourism is booming.
So, if you're considering a property investment, Costa Rica's combination of tax advantages, market growth, and lifestyle appeal makes it a compelling choice.
Sources: Blue Water Properties of Costa Rica, Global Property Guide, Osa Property Management
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.