Costa Rica is this year’s best destination to retire according to International Living, the country’s many advantages continue to charm foreigners who choose to retire or relocate abroad.
The great weather, the political and economic stability, its beautiful beaches and natural attractions as well as the friendliness of its people are just some of the reasons that make the country an attractive place to live in; the good news is, that even though Costa Rica is not a cheap country, real estate is considerably cheaper than in North America and Europe, when it comes to property in Costa Rica, you will get bang for your buck.
There are, however, some things that need to be considered when buying real estate in Costa Rica, naturally, many questions arise, the first thing you should know is that foreigners and nationals have the same rights in terms of acquiring and owning real estate property with just a couple of restrictions.
Location: Of course the location of your property is the first thing you need to decide on, several factors will influence your decision: the type of property you want, the price range, the weather (Costa Rica has many microclimates). The gold coast of Guanacaste is the preferred location of those looking to retire at the beach or own a vacation home, while for those who want to relocate to Costa Rica with their family city locations such as Santa Ana and Escazu are popular because of their many conveniences and large expat communities. Make sure to run your own research regarding the main problems the area where you plan to buy has, the availability of main services, security, etc.
Types of Property: Individual residence, condominium, gated communities, lots, beachfront property, commercial property, etc. Many foreigners come to Costa Rica looking to buy beachfront property, in this case you will likely hear the terms Maritime Zone and Concession Property, this is what you need to know :
- Maritime land zones:
these properties on locations facing maritime coasts, and it includes islands, mangroves, estuaries, and natural rock formations that overcome the level of the ocean the maritime land zone is the first 200 meters from the ordinary high tide and heading inland; this area is owned by the government, and has a public and a restricted area. The land located in public areas, which comprises the first 50-meter-wide belt between the ordinary high tide and the areas exposed during low tide are NOT available for ownership of any kind.
The other 150 meters of maritime land zones may be subject to concession rights for a limited, although extendable, period of time. The municipalities are the entities in charge of granting concessions, which are subject to royalty payment to the municipality and the Costa Rica Tourism Board.
This is where one of the restrictions mentioned before come into place regarding foreigners investing in real estate property. A concession cannot be granted to a foreigner that has not resided in the country for a period of at least five years. Deloitte Company explains it in detail in its Investor’s Guide 2017: “…only physical individuals and companies that are qualified to hold concession rights may participate in tourism developments on the maritime-land zone or in locations with access thereto. Similarly, foreign entities may participate therein provided they are tourism companies whose capital investment toward the development is owned by Costa Ricans in a proportion of over 50%”.
In other words, foreigners with more than 5-years residing in the country can own only up to 49% of a concession.
Concession land is very valuable, and therefore it usually pays higher taxes and are subject to a series of restrictions which makes this land difficult to develop and heavily regulated.
- Titled Property:
This is the most common form of real estate investing in Costa Rica, all information for the property should be available and provided by the seller and verified at the public registry and corresponding municipality.
- Untitled Property:
This means a property is not recorded in the Public Registry; although this is not very common, it is possible and you want to avoid buying untitled property if you don’t want future problems regarding ownership, delimitations of the property, etc.
- Properties in condominium and gated communities:
When buying property in a gated community, we may be talking about individual residences or townhouses, apartments in vertical buildings, or condos; this has become a very popular option in Costa Rica particularly because it offers advantages such as…