Buying Property in Costa Rica
Rachel Newcombe, Wednesday, 11 September 2013
Lush rainforests, open spaces, exotic plants and amazing animals, birds and insects, Costa Rica has it all. Once thought of as merely a holiday destination, it’s now becoming a location for foreign buyers wishing to settle down and make a new life for themselves abroad. But what attracts people to buy in Costa Rica, how easy is it to purchase property and what’s it really like to live there?
Costa Rica is one of the five republics that make up Central America and is often described as a real gem of a place. On the east and north-east it’s surrounded by the Caribbean sea, on the west and south by the pacific ocean and on the southeast it borders Panama.
The Costa Rican people, or ‘Ticos’ as they refer to themselves, are friendly and welcoming to foreigners and the country is said to be peaceful, clean and pleasant to live in. The varied topography offers an incredible diversity of climate, with a staggering 21 different ecological zones in an area measuring only 52,000 square kilometres. This means that there are variations in weather to suit almost everyone, from hot and humid to dry and cold, plus almost anything in between.
“The central valley, where half the country’s population of 3.5 million people live, has the best climate in the world. But if perfect spring-like weather gets too boring for you, the tropical heat of the Pacific coast is only a couple of hours away,” explains Bill Adams, who’s lived in Costa Rica for the last 36 years.
Although it is still regarded as being a third world country, Costa Rica has an abundance of first world technology and, due to the influx of foreigners, it’s possible to buy most of your favourite foods in the supermarkets. There are hundreds of restaurants featuring a range of world cuisines located in the Central Valley, although there’s a definite lack of fish and chips, and, amazingly, the first ever Ferrari dealership opened up in the country last year.
The country is experiencing a real boom in property buying, and locals say that hundreds of Americans, Canadians and Europeans have all chosen to move to Costa Rica in recent years. In fact, says Jack Raifer, from Hot Tropics Real Estate, one of the oldest property companies in the country, “It was foreigners who started developing most of the beach areas, which are now considered property hot spots. I can safely say that there are close to 100,000 foreigners living here.”
Buying basics
One of the benefits of buying in Costa Rica is that foreigners have the same rights as nationals when purchasing real estate. Also, the constitution guarantees the protection of property ownership rights.
“It is actually easy and safe to buy property here – you just need to know who you are dealing with,” advises Jack. “First of all, real estate agents do not need to be licensed, meaning that everyone in Costa Rica is a realtor, even taxi drivers, so it’s important to look for someone who has properties listed that you like and seems to know what they’re doing.”
As well as being aware of real estate agents and finding someone that seems professional, Jack suggests finding a lawyer should be high on your priority list. “There are more lawyers in Costa Rica than we have trees, from large firms to great individuals. There is a professional law college, which you can call and verify any attorney and average fees. But, as a general rule, any lawyer that charges under the average is either a very good friend or you should be wary,” he explains.
Once you’ve decided on a property, you make an offer on it. If the seller accepts your offer, you then need to get the property numbers from the owner or seller, get them to your lawyer and check the details in the national registry. This is to make sure that the title is free and clear, that the seller really does own the property and that there are no mortgages on the property.
Whilst all that is being confirmed, escrow is opened through your lawyer, as a means of showing that the offer you’ve made is real and you intend to go through with it, and this generally means making a 10 per cent deposit. The closing dates are then fixed according to both parties – although as a general rule, they can be between two weeks and two months – and after the lawyer verifies everything, contracts are drawn up. On the set closing date, the rest of the purchase price is placed on escrow, the contracts are signed and the escrow funds are given to the seller. “After the contracts are signed, it takes only a few days to register the title,” explains Jack, “but the moment it goes into the lawyers notary books, it is done and binding.”
But if the process doesn’t quite run as smoothly as this or you don’t have a lawyer fixed up, don’t panic. “If at any time you don’t feel 100 per cent sure of what you are doing, go to one of the title insurance companies,” suggests Jack. “It costs from 0.5 per cent to 1.5 per cent of the property value, but it’s worth millions if it puts your mind at ease. There are two large international companies that do this (Steward Title and First Costa Rica Title) and they’ll handle escrow and offer their attorneys as well.”
There are a few extra costs to be aware of, which are paid on closing. These include a 2.47 per cent transfer tax fee, which is paid to the government via a lawyer, and a 1.25 per cent fee which is usually paid to the lawyer.
Hot property zones
The good news is that there are all sorts of properties available to buy, from apartments and houses, to larger lots and even land for developing. One important aspect to note is that the majority of beaches in Costa Rica are regulated by a Maritime Zone law, which affects the land within 200 metres of the sea. The first 50 metres from the high tide mark are regarded as being public areas and have restrictive uses, and the next 150m are subject to strict rights granted by the local government. Due to this, it’s often best to avoid buying beachfront houses, or ensure that any restrictions are carefully checked out in advance.
Currently, some of the most popular areas are located in the Central valley towns of Escazu and Santa Ana, only a few miles to the west of the capital San Jose, plus the Pacific coastal region is popular too. A three-bedroom house at Cariari, about 10 minutes from San Jose, was on sale with Costa Rica Tropics for $135,000, Hot Tropics had a luxurious four-bedroom home in Guachipelin, in the Central valley area, available for $645,000 and new properties in the Pacific coast region available for between $70,000 – $375,000.
Although prices are changing all the time, not surprisingly homes with a view of the sea tend to be the most expensive. The North Pacific is also more developed and tends to be more expensive, whereas the South Pacific is cheaper and the Central Valley area varies considerably. “As for the Caribbean, it is an area that has given some problems, and if anybody asks me personally, I could not say it is a good investment,” advises Bill.
For those already living in the country, it’s proving to be an exotic and enjoyable life. “Living in Costa Rica is an amazing adventure, and in the 36 years I’ve lived here, I’ve never got tired of the excitement,” enthuses Bill Adams, who went on holiday to Costa Rica in 1970, fell in love with the country and has lived there ever since. “With every day offering opportunities to explore and learn new things about this fascinating country and its lovely people, the next 36 years look like they’ll also continue to hold my undivided attention.” If an adventure sounds like your cup of tea, maybe Costa Rica could hold similar joys for you.
Lush rainforests, open spaces, exotic plants and amazing animals, birds and insects, Costa Rica has it all. Once thought of as merely a holiday destination, it’s now becoming a location for foreign buyers wishing to settle down and make a new life for themselves abroad. But what attracts people to buy in Costa Rica, how easy is it to purchase property and what’s it really like to live there?
Costa Rica is one of the five republics that make up Central America and is often described as a real gem of a place. On the east and north-east it’s surrounded by the Caribbean sea, on the west and south by the pacific ocean and on the southeast it borders Panama.
The Costa Rican people, or ‘Ticos’ as they refer to themselves, are friendly and welcoming to foreigners and the country is said to be peaceful, clean and pleasant to live in. The varied topography offers an incredible diversity of climate, with a staggering 21 different ecological zones in an area measuring only 52,000 square kilometres. This means that there are variations in weather to suit almost everyone, from hot and humid to dry and cold, plus almost anything in between.
“The central valley, where half the country’s population of 3.5 million people live, has the best climate in the world. But if perfect spring-like weather gets too boring for you, the tropical heat of the Pacific coast is only a couple of hours away,” explains Bill Adams, who’s lived in Costa Rica for the last 36 years.
Although it is still regarded as being a third world country, Costa Rica has an abundance of first world technology and, due to the influx of foreigners, it’s possible to buy most of your favourite foods in the supermarkets. There are hundreds of restaurants featuring a range of world cuisines located in the Central Valley, although there’s a definite lack of fish and chips, and, amazingly, the first ever Ferrari dealership opened up in the country last year.
The country is experiencing a real boom in property buying, and locals say that hundreds of Americans, Canadians and Europeans have all chosen to move to Costa Rica in recent years. In fact, says Jack Raifer, from Hot Tropics Real Estate, one of the oldest property companies in the country, “It was foreigners who started developing most of the beach areas, which are now considered property hot spots. I can safely say that there are close to 100,000 foreigners living here.”
Buying basics
One of the benefits of buying in Costa Rica is that foreigners have the same rights as nationals when purchasing real estate. Also, the constitution guarantees the protection of property ownership rights.
“It is actually easy and safe to buy property here – you just need to know who you are dealing with,” advises Jack. “First of all, real estate agents do not need to be licensed, meaning that everyone in Costa Rica is a realtor, even taxi drivers, so it’s important to look for someone who has properties listed that you like and seems to know what they’re doing.”
As well as being aware of real estate agents and finding someone that seems professional, Jack suggests finding a lawyer should be high on your priority list. “There are more lawyers in Costa Rica than we have trees, from large firms to great individuals. There is a professional law college, which you can call and verify any attorney and average fees. But, as a general rule, any lawyer that charges under the average is either a very good friend or you should be wary,” he explains.
Once you’ve decided on a property, you make an offer on it. If the seller accepts your offer, you then need to get the property numbers from the owner or seller, get them to your lawyer and check the details in the national registry. This is to make sure that the title is free and clear, that the seller really does own the property and that there are no mortgages on the property.
Whilst all that is being confirmed, escrow is opened through your lawyer, as a means of showing that the offer you’ve made is real and you intend to go through with it, and this generally means making a 10 per cent deposit. The closing dates are then fixed according to both parties – although as a general rule, they can be between two weeks and two months – and after the lawyer verifies everything, contracts are drawn up. On the set closing date, the rest of the purchase price is placed on escrow, the contracts are signed and the escrow funds are given to the seller. “After the contracts are signed, it takes only a few days to register the title,” explains Jack, “but the moment it goes into the lawyers notary books, it is done and binding.”
But if the process doesn’t quite run as smoothly as this or you don’t have a lawyer fixed up, don’t panic. “If at any time you don’t feel 100 per cent sure of what you are doing, go to one of the title insurance companies,” suggests Jack. “It costs from 0.5 per cent to 1.5 per cent of the property value, but it’s worth millions if it puts your mind at ease. There are two large international companies that do this (Steward Title and First Costa Rica Title) and they’ll handle escrow and offer their attorneys as well.”
There are a few extra costs to be aware of, which are paid on closing. These include a 2.47 per cent transfer tax fee, which is paid to the government via a lawyer, and a 1.25 per cent fee which is usually paid to the lawyer.
Hot property zones
The good news is that there are all sorts of properties available to buy, from apartments and houses, to larger lots and even land for developing. One important aspect to note is that the majority of beaches in Costa Rica are regulated by a Maritime Zone law, which affects the land within 200 metres of the sea. The first 50 metres from the high tide mark are regarded as being public areas and have restrictive uses, and the next 150m are subject to strict rights granted by the local government. Due to this, it’s often best to avoid buying beachfront houses, or ensure that any restrictions are carefully checked out in advance.
Currently, some of the most popular areas are located in the Central valley towns of Escazu and Santa Ana, only a few miles to the west of the capital San Jose, plus the Pacific coastal region is popular too. A three-bedroom house at Cariari, about 10 minutes from San Jose, was on sale with Costa Rica Tropics for $135,000, Hot Tropics had a luxurious four-bedroom home in Guachipelin, in the Central valley area, available for $645,000 and new properties in the Pacific coast region available for between $70,000 – $375,000.
Although prices are changing all the time, not surprisingly homes with a view of the sea tend to be the most expensive. The North Pacific is also more developed and tends to be more expensive, whereas the South Pacific is cheaper and the Central Valley area varies considerably. “As for the Caribbean, it is an area that has given some problems, and if anybody asks me personally, I could not say it is a good investment,” advises Bill.
For those already living in the country, it’s proving to be an exotic and enjoyable life. “Living in Costa Rica is an amazing adventure, and in the 36 years I’ve lived here, I’ve never got tired of the excitement,” enthuses Bill Adams, who went on holiday to Costa Rica in 1970, fell in love with the country and has lived there ever since. “With every day offering opportunities to explore and learn new things about this fascinating country and its lovely people, the next 36 years look like they’ll also continue to hold my undivided attention.” If an adventure sounds like your cup of tea, maybe Costa Rica could hold similar joys for you.
All types of property for sale in Costa Rica by private sellers and estate agents. Find your perfect villa, condominium or apartment in the Central valley area or the Pacific coastal region.
Several years ago, Costa Rican banks, both state and private, offered foreign buyers mortgage loans on lucrative conditions. However, the world
economic crisis and especially the U.S. home bubbles significantly altered the situation. One thing you should know when considering Costa Rica is
that its economy largely depends on the Big Brother’s financial health. Currently, only several banks offer mortgage options to non-resident
foreigners. There are no mortgage brokers, and a real estate
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