The Complete Guide to Buying Property in Costa Rica as a Foreigner: What Every Expat Needs to Know in 2025
Published by Cabuya Realty | Real Estate Experts in Costa Rica
Thinking about making the leap and buying property in Costa Rica? You're not alone. Every month, we speak with dozens of foreigners who've fallen in love with this beautiful country and are ready to make it their home. But here's the thing, which you’ve probably already heard – buying property in Costa Rica as a foreigner can feel overwhelming if you don't know what challenges to anticipate and how to overcome them.
Through both our own personal experience of buying here and our professional work with foreign buyers, we’ve learned that the biggest difference between a smooth, successful purchase and a stressful nightmare isn't luck – it's preparation and understanding the process.
Why Costa Rica? (And Why the Process Matters More Than You Think)
Costa Rica offers something truly special – stable democracy, no army since 1948, incredible biodiversity, and that famous "Pura Vida" lifestyle that drew you here in the first place. But here's what many don't realize: our real estate laws are actually quite foreigner-friendly compared to other Central American countries. You can own property outright, get clear title, and enjoy the same ownership rights as Costa Rican citizens.
The catch? The process is different from what you're used to, and those differences matter.
The Foundation: Understanding Costa Rican Property Law for Foreigners
Let's start with the good news: foreigners can absolutely own property in Costa Rica. Unlike some countries that restrict foreign ownership, Costa Rica welcomes international investment in real estate. However, there are some important distinctions you need to understand.
What You Can Own Outright
Fee simple titled property (the equivalent of freehold ownership)
Condominiums and apartments
Commercial properties
Agricultural land (with some restrictions on size)
The Maritime Zone: What You Need to Know
Here's where it gets interesting. Costa Rica has something called the "Maritime Zone" – a 200-meter strip along both coastlines where foreign ownership rules are different. The first 50 meters (called the "public zone") cannot be owned by anyone, regardless of what anyone tries to tell you. The beaches are for all Costa Ricans. The next 150 meters (the "restricted zone") can only be owned by Costa Rican citizens or corporations.
But don't worry – this doesn't mean you can't have that beachfront dream home. Many of our clients own beautiful coastal properties through legal structures we'll discuss in a moment.
Your Ownership Options: Corporation vs. Individual Ownership
This is probably the most important decision you'll make, and it's where I see a lot of confusion. Let me break down your options:
Individual Ownership (Fee Simple)
Best for: Properties outside the maritime zone, straightforward ownership
Pros:
Simplest ownership structure
Lower ongoing costs
Direct ownership in your name
Cons:
Cannot own in maritime zone
May have inheritance tax implications
Limited asset protection
Corporation Ownership
Best for: Maritime zone properties, asset protection, estate planning
Pros:
Can own maritime zone property
Better asset protection
Easier to transfer ownership
Potential tax advantages
Cons:
Annual corporate maintenance costs (around $300-500/year)
More complex initial setup
Requires ongoing corporate compliance
Your best choice depends on your specific situation, the property location, and your long-term plans.
The Buying Process: Your Step-by-Step Roadmap
Alright, let's walk through exactly what happens when you decide to buy property in Costa Rica. This process typically takes 45-90 days from offer to closing, and understanding each step will save you stress and potentially thousands of dollars. Best to hope for the best but plan for the worst case scenario in terms of timelines.
Step 1: Property Search and Market Analysis
Before you fall in love with that first property you see, take time to understand the local market. Prices can vary dramatically between regions, and what seems like a great deal might not be when you factor in all costs.
What to research:
Comparable sales in the area - try to find out actual sale prices not listed
Local development plans
Infrastructure and utilities availability - water rights and electricity
Community amenities and services
Step 2: Legal Due Diligence (This Is Critical)
In the United States or Canada, you might rely on title insurance. In Costa Rica, we rely on thorough legal investigation of the property's title history. This is not optional – it's essential.
Your lawyer will investigate:
Chain of title going back at least 30 years
Any liens, mortgages, or encumbrances
Zoning and land use compliance
Environmental restrictions
Municipal permits and tax compliance
Step 3: Property Inspection and Appraisal
Just like back home, you'll want a thorough inspection. But in Costa Rica, also pay special attention to:
Water rights and availability
Electrical systems (voltage differences)
Structural integrity (earthquake building codes)
Septic systems and waste management
Step 4: Purchase Agreement and Escrow
Costa Rica uses a different escrow system than you might be used to. We typically use lawyer escrow accounts rather than title companies. Your attorney holds the funds and coordinates the closing.
Step 5: Closing and Title Transfer
The actual closing happens at the National Registry, where the title is officially transferred. Your lawyer will handle this process, but you'll need to be present (or provide power of attorney).
The Real Costs: Budget Beyond the Purchase Price
Here's where I need to be really transparent with you. The property price is just the beginning. Let me break down the real costs of buying property in Costa Rica:
One-Time Closing Costs (Typically 3-5% of Purchase Price)
Legal fees: 1-1.5% of purchase price
Transfer tax: 1.5% of registered value
Registry fees: ~$500-1,000
Notary fees: ~$300-800
Property appraisal: $300-800
Ongoing Annual Costs
Property taxes: 0.25% of registered value
Municipal taxes: varies by location
Corporation maintenance (if applicable): $300-500
Property management (if needed): 8-12% of rental income
Financing: Your Options as a Foreigner
Getting a mortgage in Costa Rica as a foreigner is challenging. Most of international clients buy with cash or arrange financing in their home country. Here are your main options:
Costa Rican Bank Financing: Possible but requires substantial local credit history and income verification. Interest rates typically range from 8-12% or higher.
Owner Financing: Many sellers, especially expats, are open to carrying financing. This can be a win-win arrangement but of course requires significant legal due diligence and support.
Home Country Financing: Many clients use home equity loans, lines of credit, or sell property in their home country to fund their Costa Rica purchase.
Red Flags: What to Watch Out For
After years in this business, I've seen some situations that could have been avoided with proper awareness. Here are the biggest red flags to watch for:
Title Issues
Properties without clear title
Pending legal disputes
Unpaid taxes or municipal fees
Environmental violations
Seller Issues
Pressure to close quickly
Reluctance to provide documentation
Requests for payment outside of escrow
Properties priced significantly below market value (there's usually a reason)
Location Concerns
Properties in areas without legal access roads
Land in environmentally protected zones
Areas prone to flooding or landslides - check what it’s like in both seasons
Properties without reliable water sources -
Working with Professionals: Your Success Team
Let me tell you something I've learned after all these years: the professionals you choose can make or break your Costa Rica property purchase. Here's who you need on your team:
Real Estate Attorney (Non-Negotiable)
In Costa Rica, a qualified real estate attorney is essential. They'll handle title research, draft contracts, manage escrow, and coordinate the closing. Someone who is both trust worthy, fast, and informed can be challenging to find. We can help.
What to look for:
Licensed to practice in Costa Rica
Specializes in real estate law
Fluent in your language
Strong local reputation
Transparent fee structure
Real Estate Agent
A good agent knows the local market, can identify properties that match your criteria, and helps negotiate fair terms. At Cabuya Realty, we pride ourselves on representing our clients' interests throughout the entire process.
Accountant
Especially important if you're considering rental income or have complex tax situations. They can help structure your ownership for optimal tax efficiency.
Timeline and Expectations: What Really Happens
Let's talk reality for a moment. Here's what a typical timeline looks like:
Week 1-2: Property search and initial offers
Week 3-4: Due diligence period (inspections, title research)
Week 5-6: Finalizing financing and documentation
Week 7-8: Final preparations and closing coordination
Week 9-12: Closing process and title transfer
This timeline can be longer (rarely shorter) depending on the complexity of the transaction, financing requirements, and any issues discovered during due diligence.
Common Mistakes (And How to Avoid Them)
Here are the most common ones:
Mistake #1: Rushing the Process
Costa Rica operates on "Tico time," and trying to rush things often backfires. Build extra time into your timeline and be patient with the process.
Mistake #2: Skipping Legal Due Diligence
I cannot stress this enough: never, ever skip the legal investigation phase. It might seem expensive upfront, but it's cheap insurance against much bigger problems later. Don’t let your heart overrule your head.
Mistake #3: Not Understanding Total Costs
Budget for all costs, not just the purchase price. Having to scramble for additional funds during closing is stressful and can jeopardize your purchase.
Mistake #4: Choosing Professionals Based on Price Alone
The cheapest attorney or agent isn't necessarily the best value. Experience, expertise, and professionalism matter enormously in Costa Rican real estate.
Your Next Steps: How to Move Forward Confidently
If you've made it this far, you're already ahead of most buyers who jump in without proper preparation.
Here's what I recommend for your next steps:
1. Define Your Goals and Budget
Be crystal clear about what you want to achieve with your Costa Rica property purchase. Investment? Retirement home? Vacation rental? Your goals will influence every decision.
2. Get Pre-Qualified for Financing
Whether it's arranging financing in your home country or exploring local options, know your budget before you start seriously looking.
3. Build Your Professional Team
Start identifying and interviewing attorneys, agents, and other professionals before you need them. Having these relationships in place will make the process much smoother.
4. Visit and Research
If possible, spend extended time in the areas where you're considering buying. Rent for a few months if you can. Nothing replaces firsthand experience.
Why Choose Cabuya Realty for Your Costa Rica Property Journey
At Cabuya Realty, we understand that buying property in Costa Rica is more than a transaction – it's a life-changing decision. We've built our reputation by combining deep local knowledge with genuine care for our international clients.
What sets us apart:
Extensive network of trusted legal and financial professionals
Transparent communication throughout the entire process
Deep understanding of both Costa Rican culture and expat needs
Commitment to your long-term success, not just closing deals
We believe that informed clients make the best decisions, which is why we're committed to providing you with all the information you need to make confident choices about your Costa Rica property investment.
Ready to Take the Next Step?
Buying property in Costa Rica as a foreigner doesn't have to be complicated or stressful when you have the right guidance and preparation. The key is understanding the process, working with qualified professionals, and maintaining realistic expectations.
If you're ready to explore Costa Rica real estate opportunities, we'd love to help. Our team at Cabuya Realty is here to guide you through every step of the process, from initial property search to closing day and beyond.
Contact us today to schedule your complimentary consultation and take the first step toward your Costa Rica property ownership journey.
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