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
Buying property in Costa Rica as a foreigner involves several risks that potential investors must carefully consider.
While Costa Rica offers attractive investment opportunities with favorable laws for foreign ownership, buyers face challenges including complex legal procedures, environmental risks, infrastructure limitations, and potential title issues that require thorough due diligence and professional guidance.
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.
Costa Rica's property market presents moderate to high risks for foreign buyers, particularly around legal compliance, environmental hazards, and infrastructure limitations.
While foreigners enjoy constitutional property rights, buyers must navigate complex regulations, especially for beachfront properties, and ensure proper due diligence to avoid title issues and legal complications.
| Risk Category | Risk Level | Key Concerns |
|---|---|---|
| Legal/Title Issues | High | Maritime zone restrictions, title verification, encumbrances |
| Environmental Risks | Medium-High | Earthquakes, flooding, landslides, tropical storms |
| Infrastructure | Medium | Variable road access, utilities reliability in rural areas |
| Security | Medium | Petty theft, location-dependent safety levels |
| Market Volatility | Low-Medium | Price fluctuations, rental income variability |
| Tax Compliance | Low | Annual property taxes, luxury home tax for high-value properties |
| Maintenance Costs | Medium | Tropical climate effects, regular upkeep requirements |
What is the current Costa Rica property market like as of September 2025?
The Costa Rica real estate market in September 2025 remains robust with strong international demand driving continued growth.
Property prices are experiencing ongoing increases, particularly in coastal regions like Guanacaste, the Central Pacific, and Caribbean areas. Rental yields in popular tourist destinations such as Tamarindo, Jaco, and Papagayo typically range from 7% to 12%, making Costa Rica attractive for investment properties.
Demand is highest for beachfront properties, ocean-view homes, and gated community developments. The luxury real estate segment and short-term rental market (Airbnb) continue to show steady growth, driven by increasing numbers of remote workers and retirees seeking tropical living.
However, this strong demand has also led to price inflation in prime areas, making thorough market research essential before purchasing. Properties in established expat communities command premium prices compared to less developed regions.
It's something we develop in our Costa Rica property pack.
Are there legal restrictions for foreigners buying property in Costa Rica?
Foreigners generally enjoy the same property ownership rights as Costa Rican citizens, but specific restrictions apply to certain areas.
The Costa Rican Constitution guarantees full fee-simple title rights to foreigners for most properties. You can own property in your personal name or through a locally registered corporation, with both options providing secure ownership.
However, beachfront properties within the Maritime Zone (first 200 meters from high tide) have special restrictions. Foreigners can only lease these lands through concessions and may own up to 49% through a Costa Rican corporation. Border zones, nature reserves, river mouths, and islands may have additional limitations.
Agricultural land and properties in protected areas may also have usage restrictions or require special permits. Always verify the legal status and permitted uses of any property before proceeding with a purchase.
Engaging a qualified real estate attorney is essential to navigate these regulations and ensure compliance with all applicable laws.
What are the taxes associated with buying property in Costa Rica?
Costa Rica has relatively low property taxes compared to many countries, but several fees apply during purchase and ownership.
| Tax Type | Rate | Details |
|---|---|---|
| Annual Property Tax | 0.25% | Based on registered property value |
| Luxury Home Tax | 0.25% - 0.55% | Properties above $279,000, incremental rates |
| Property Transfer Tax | 2.5% - 2.86% | Paid by purchaser on sale price |
| VAT (IVA) | 13% | May apply to certain services |
| Legal Fees | 1% - 2% | Attorney and notary costs |
| Registration Fees | 0.5% - 1% | National Registry recording costs |
| Municipal Taxes | Varies | Local permits and certificates |
What is the process of transferring property ownership in Costa Rica?
The property transfer process in Costa Rica requires careful attention to legal procedures and typically takes 1-2 months to complete.
Begin by engaging a licensed real estate agent and qualified attorney who specialize in Costa Rican real estate law. Make a formal offer and arrange professional property inspections to identify any structural or legal issues.
Conduct thorough due diligence including municipal permit checks, National Registry searches, and verification of property boundaries. Your attorney should verify clear title, check for liens or encumbrances, and confirm all taxes are current.
Sign the purchase agreement (promissory contract) which outlines terms, conditions, and timeline. Arrange financing if needed and prepare all required documentation including identification, proof of funds, and tax compliance certificates.
Complete the closing at the National Registry where the deed is signed, transfer taxes are paid, and ownership is officially recorded. Ensure all utilities are transferred to your name and obtain proper insurance coverage immediately after closing.
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How do property rights work for foreigners in Costa Rica?
Foreign property rights in Costa Rica are constitutionally protected and generally equivalent to those of citizens.
The Costa Rican Constitution explicitly guarantees foreigners the right to own real estate with full fee-simple title. This means you have complete ownership rights including the ability to sell, rent, mortgage, or transfer the property without restrictions.
You can hold property ownership either in your personal name or through a Costa Rican corporation. Personal ownership is simpler but may have privacy concerns, while corporate ownership offers more privacy and potential tax advantages but requires annual corporate filings.
These rights extend to most types of property including residential homes, condominiums, commercial buildings, and developable land. However, certain zones like Maritime areas, border regions, and protected zones may have specific limitations on foreign ownership or usage rights.
Your property rights are recorded at the National Registry, providing legal protection and clear ownership documentation that is recognized by Costa Rican courts and international law.
Are there specific zoning laws or regulations I need to be aware of?
Costa Rica has complex zoning regulations that vary significantly by municipality and region, requiring careful verification before purchase.
Each municipality maintains its own zoning ordinances governing permitted land uses, building heights, setback requirements, and density restrictions. Properties may be zoned for residential, commercial, agricultural, or mixed-use development, with specific regulations for each category.
Coastal properties face additional Maritime Zone regulations limiting construction within 50 meters of high tide and requiring special permits for development between 50-200 meters from shore. Environmental protection laws may restrict development in areas near national parks, rivers, or sensitive ecosystems.
Agricultural zones often have restrictions on subdivision and non-agricultural uses. Properties in tourist development areas may have specific architectural requirements or height limitations to preserve scenic views.
Before purchasing, verify current zoning designations with local municipal offices and confirm that your intended use is permitted. Obtain all necessary construction permits before beginning any development work to avoid legal complications.
What is the state of infrastructure in areas where I'm looking to buy?
Infrastructure quality in Costa Rica varies dramatically between developed tourist areas and remote rural locations.
Established expat and tourist destinations like the Central Valley, Guanacaste province, and Pacific Coast areas generally have reliable electricity, paved roads, municipal water systems, and high-speed internet access. These areas also have better access to healthcare facilities, shopping centers, and international airports.
Rural and remote properties often face infrastructure challenges including unpaved roads that may become impassable during rainy season, unreliable electricity with frequent outages, well water systems requiring maintenance, and limited internet connectivity. Some areas lack municipal services entirely.
Transportation infrastructure is improving but remains limited in mountainous regions. Consider proximity to major highways, airports, and ports when evaluating investment potential.
Factor infrastructure limitations into your budget, as installing private systems for electricity, water, or internet can be expensive. Remote properties may require generators, water treatment systems, and satellite internet to achieve modern living standards.
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 common environmental risks in Costa Rica like flooding or earthquakes?
Costa Rica faces significant environmental risks due to its location on seismically active terrain and tropical climate patterns.
Earthquakes are a major concern as Costa Rica sits along the Pacific Ring of Fire with multiple fault lines. The country experiences regular seismic activity, and major earthquakes can cause structural damage, landslides, and tsunamis in coastal areas. Properties should be built to seismic standards and have earthquake insurance.
Flooding occurs regularly during rainy season (May-November), particularly in low-lying coastal areas, river valleys, and poorly drained regions. Climate change is intensifying rainfall patterns, making flood risk assessment crucial for property selection.
Landslides are common in mountainous areas, especially during heavy rains. Properties on steep slopes or below unstable terrain face higher risk. Tropical storms and hurricanes occasionally impact the Caribbean coast, bringing high winds and flooding.
Coastal properties face erosion from rising sea levels and storm surge. Volcanic activity, while less common, can affect areas near active volcanoes through ash fall and mudflows.
Research local hazard maps, consult geological surveys, and ensure proper insurance coverage for environmental risks before purchasing any property in Costa Rica.
How secure is the area where the property is located?
Security levels in Costa Rica vary significantly by location, with tourist areas and gated communities generally offering better safety than isolated rural properties.
Popular expat destinations and tourist zones typically have dedicated security services, regular police patrols, and established emergency response systems. Gated communities often provide 24/7 security guards, controlled access, and surveillance systems.
Petty theft is the most common security concern throughout Costa Rica, including break-ins, vehicle theft, and pickpocketing in populated areas. Violent crime rates are relatively low but have increased in certain regions, particularly around major cities.
Rural and remote properties face different risks including isolation during emergencies, limited police response times, and potential issues with squatters on unoccupied land. Some border areas have higher crime rates due to drug trafficking activities.
Research local crime statistics, talk to current residents and expat community groups, and consider security measures like alarm systems, security cameras, and caretaker services for properties that will be unoccupied for extended periods.
It's something we develop in our Costa Rica property pack.
What are the property maintenance costs in Costa Rica?
Property maintenance costs in Costa Rica can be substantial due to the tropical climate and vary widely based on property type and location.
| Maintenance Category | Annual Cost Range | Key Factors |
|---|---|---|
| Property Insurance | $500 - $2,000 | Coverage type, property value, risk level |
| HOA/Condo Fees | $1,200 - $6,000 | Amenities, security, community size |
| Pool Maintenance | $1,000 - $3,000 | Size, equipment, chemical costs |
| Garden/Landscaping | $800 - $2,400 | Property size, plant types, labor costs |
| Pest Control | $300 - $800 | Termites, ants, tropical insects |
| Cleaning Services | $1,200 - $4,000 | Frequency, property size, location |
| Repairs/Painting | $1,000 - $5,000 | Climate damage, material quality |
How can I ensure the property has clear legal title?
Ensuring clear legal title requires comprehensive due diligence through Costa Rica's National Registry system and professional legal assistance.
Hire a qualified real estate attorney to conduct a thorough title search at the National Registry (Registro Nacional). This search will reveal the property's ownership history, any liens, mortgages, or encumbrances, and verify the seller's legal right to transfer ownership.
Verify that all property taxes are current and obtain certificates from the municipality confirming no outstanding debts or violations. Check for any pending legal disputes, inheritance issues, or claims against the property.
Confirm property boundaries match the legal description through a professional survey. Ensure all construction permits were properly obtained for existing structures and that the property complies with local zoning regulations.
Consider purchasing title insurance, which is available in Costa Rica and provides additional protection against undiscovered title defects. This insurance can cover legal costs and losses if title problems emerge after purchase.
Never proceed without professional legal verification, as title issues can result in property loss or significant legal expenses to resolve.
What kind of property insurance is recommended in Costa Rica?
Comprehensive property insurance is essential in Costa Rica due to environmental risks and potential security concerns.
Fire and catastrophe insurance is the minimum requirement and covers basic perils including fire, lightning, and some natural disasters. This basic coverage is often required by lenders and homeowners associations.
Earthquake insurance is strongly recommended given Costa Rica's seismic activity. Standard policies may exclude earthquake damage, so verify coverage or purchase separate earthquake protection.
Flood insurance should be considered for properties in flood-prone areas, coastal regions, or river valleys. Climate change is increasing flood risks, making this coverage increasingly important.
Comprehensive homeowners insurance covers theft, vandalism, liability, and accidental damage. This is particularly valuable for vacation properties or rental investments that may be unoccupied for periods.
Title insurance protects against legal title defects and can cover attorney fees for resolving ownership disputes. Liability insurance protects against accidents on your property and is especially important for rental properties.
It's something we develop in our Costa Rica property pack.
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.
Buying property in Costa Rica involves manageable risks when approached with proper preparation and professional guidance.
While challenges exist around legal compliance, environmental hazards, and infrastructure limitations, thorough due diligence and expert assistance can help foreign buyers navigate these issues successfully and secure profitable real estate investments in this attractive Central American destination.
Sources
- ESales International - Costa Rica Property Market Outlook 2025
- Global Property Guide - Costa Rica Price History
- The Latinvestor - Guanacaste Costa Rica Property
- The Latinvestor - Costa Rica Real Estate for Foreigners
- OSA Property Management - Property Taxes Guide
- Visit World Today - Buying Property Guide
- Special Places of Costa Rica - Tax Information
- Quatro Legal - Foreign Property Ownership