The Costa Rica Real Estate Expert

Costa Rica is well known for its eco-tourism, and for the most part, Costa Rica has done an exceptional job when it comes to being a leader in protecting its precious environment.  It started years ago when Costa Rica truly came onto the global scene as a hotspot for eco-tourism (still a popular niche in the tourism industry), and continues today as Costa Rica is one of four countries in a race to be the first to go carbon neutral (the other three countries are New Zealand, Iceland, and Norway).

That’s why it is not surprising to find a real estate development in Costa Rica that has adopted a firm stance on protecting the environment.  In fact, in my opinion, it should be odd to find a Costa Rican development that does NOT take a strong stance.  Of course, I don’t rule the world yet!

The development that I am speaking of is Las Colinas de Miramar in the Central Pacific of Costa Rica, a Certified Green Worldwide development.  The Certified Green Worldwide designation is a 12-point protocol that mandates comprehensive environmental safeguards:

1. Protection of wildlife habitats while allowing for recreation.
2. Protection of wetlands, natural water courses and aquifer regeneration areas.
3. Soil erosion safeguards; both during road building, construction, and occupation.
4. Utility operations, site specific or municipal, to contain contamination retention features for ground water protection.
5. Development plans consistent with local mandates, inputs and requirements.
6. Maintenance of natural geologic contours.
7. No construction on sites with a slope greater than 40 degrees.
8. Density restrictions; based on a formula of slope and wet land proximity.
9. View shed protections including project height standards.
10. Construction to use low wattage consumption by electric appliances and fixtures, insulated windows and walls using passive solar techniques, and recycling to reduce the carbon footprint.  Potential solar electrical generation may become additional options.
11. Encourage community related sustainable economic development though the use of locally produced building materials and local labor.
12. Good Corporation Citizenship.

As an aspiring Eco-broker, it gladdens me to work with a developer so dedicated to protecting the environment.  That is why I am going to do my part by purchasing carbon offsets from Carbonfund.org.   I am promising that for each Phase 1 lot I sell in Las Colinas de Miaramar, I will buy enough carbon offsets to make a medium sized home (1500-2499 sq ft) carbon neutral for one year.

So what can you do to make better take care of our Earth?

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This informative guide was provided by Facio Abogados, the top law firm in Costa Rica, and one of Compass Properties’ business affiliates.  You can download it to your computer, read it from there, or even print it out.

Legal Guide for Buying Real Estate in Costa Rica

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Okay - so you have decided to buy Costa Rica real estate, or are at least looking into it right now.  You could work with a real estate agent from Costa Rica or with a Costa Rica developer you found on the Internet.  So why choose us?  How are we different?

It’s actually an easy answer:  dedication to providing a safe and comfortable real estate buying experience in Costa Rica.

What?!  That’s it?

Well, isn’t that all you need?  Because in our effort to accomplish this simple statement, we do a lot of not-so-simple things for you:

• Costa Rica & North America Offices - We have colleagues in Costa Rica, Canada, and the US.  This allows us to keep our fingers on the pulse of each market providing for better communication.  Surprisingly, many of the sales peole you will speak with at Costa Rican developments don’t know how to address North American’s concerns and questions about owning foreign real estate.  Neither do they know what our home markets are like, which do affect our buying decisions.
• Developer Review - Before we agree to market a development, we do a thorough “background check” on the developer and the development.  We work with the best attorneys in Costa Rica - Facio Abogados - to make sure that the developer has a good reputation and that their development is being done legally (example:  they are building on land that they own).
• Foreigner-friendly Properties - We know the types of properties that North Americans are looking for, and we seek those out.  They must be in accessible areas, close to “areas of interest”, offer safety/security features, provide property management, and also provide developer financing.  In addition to that, we even offer our input to developers when they are in the design phase of their developments so that they incorporate features that North American buyers are looking for.
• Custom Home Tours - Can you believe that some people want you to give them money so that you can go to see their development to decide if you want to buy there?  Ummmm….  We don’t do that.  You don’t pay to see the properties we are marketing.  Instead, we’ll pay you with our Fly & Buy program, where you can get up to $2000 of your travel expenses reimbursed at the closing table.  To top it off, we partner with full service travel agents who are dedicated to working with you to set up a smooth, worry-free visit to Costa Rica to meet up with our Costa Rican colleagues for home tours.  Of course, we expect that you’ll make the most of this trip and plan to see beautiful Costa Rica.
• Information - You want the information, we’ll find it.  Immigration, schools, cost of living, rental analysis, etc.  We are useful information junkies!  Well, you have to be if you are considering parting with $100’s of thousands of dollars to buy real estate in a country you aren’t familiar with!  Didn’t we say that we wanted to provide a comfortable buying experience?  How comfortable can someone be if they have never seen or visited the property before, or if they don’t even know how they take ownership (FYI:  fee simple, titled ownership - you OWN it).  That’s the reason why we do seminars for interested buyers, as it turns out to be a great venue for sharing our information.
• Financing - No, we don’t offer financing (yet), but we know what all of your financing options are and how to get them!  We have partnered with financing professionals who can help you with whatever financing option is a fit for you.  Confused about your options?  Well, we can help you decide based on your goals and your current financial picture.

So, is this enough for you?

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Many people are afraid of buying real estate in any foreign country because of course it is just that - foreign.  Things are done differently, laws are different, and the process is different.  And yes, if someone is careless or malicious, the buyer can get into some deep doo-doo.

Now I’m not here to tell you that it can never happen in Costa Rica, because it can.  Costa Rica’s real estate market is hot, which not only draws legitimate businesses, entrepreneurs and investors, but also those looking to prey on others.

This is really true of anyplace, even in the US.  But of course, like anywhere, there are ways to protect yourself.

The first is to arm yourself with information.  Talk to the experts.  Talk to others who have invested in Costa Rica successfully.  But don’t stop there - learn and read more.

Of course, that takes time, which is exactly what you should do before you buy in Costa Rica.  But to facilitate the process, you should really work with experts in the area of Costa Rica real estate.  They should be open and knowledgeable about Costa Rica’s real estate market, providing supporting evidence to their statements.  One downfall is that people selling Costa Rica real estate are not yet required to be licensed.  This only becomes a problem when the person who is selling the real estate does not know what they are doing or acts maliciously.  So make sure that whoever it is that you work with has a great team of competent individuals.

Most of the problems in the past with people getting duped has been due to the fact that proper due diligence hadn’t been done to verify that the person selling the property actually had the authority to sell it!  Whoever is listing the property should be able to verify that the title is clear and that the owner is in fact selling it.  If proof of this cannot be shown, look elsewhere.

Another lesser known issue in Costa Rica has been with squatters’ rights, which are still allowed.  However, squatters only ever becomes a problem when the property in question is raw land that is not in a development.  If you buy a house, condo, or even a vacant lot in a secured, gated community, you can rest assured that it will remain safe out of the hands of squatters.  And even in the case of raw land, hiring a security company to regularly check on your property is enough to keep squatters off your land, and safe in your hands.

My intent in writing this was not to scare anyone off from buying real estate in Costa Rica.  It was to show that like anywhere, there are ways buyers can get into trouble when they don’t know what they are doing, and to work with reputable, knowledgeable businesses with a track record behind them.  When you do that, you can sleep well at night knowing your Costa Rica property is safe.

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I can easily state that whenever I meet someone and we get to talking about Costa Rica real estate for the first time, I hear the same questions that I’ve heard many times before.  So, I put together this brief FAQ so that you can get quick answers to the most commonly asked questions and concerns about owning real estate in Costa Rica.

1.  Can a Canadian or US citizen (or other foreigner) own property in Costa Rica?

Yes.  In fact foreigners have the same property ownership rights as Costa Ricans.  Foreigners get fee simple, titled ownership of property.  That means you OWN it.  The government will not steal your Costa Rican property from you.

2.  How much are property taxes?

Property taxes are currently around 0.25% of the recorded value.  There are no capital gains taxes when the property is sold.  However, if you bring your money back into your home country, your home country will tax you accordingly.

3.   Is financing available?

Yes, and you do have several options to choose from.  In a nutshell, you can get a loan from a Costa Rican bank, a US lender,  and even from the developer.  You may also have other ways to purchase the property, using a reverse mortgage on your US or Canadian home or even a self-directed IRA (US only).  Read more about your financing options to see which may be a fit for you.

4.  Is title insurance available?

Yes.  There are many title agencies, including Chicago Title, who handle escrow services and  title insurance.  We use Chicago Title.

5.  Is it true that beachfront land in Costa Rica is considered “concession land”?

Yes, concession land is located along the coast and is the area whithin 200m of the median tide line.  Concession rights may be acquired from the Costa Rican government via a lease .  The lease periods range from 20 to 40 years, and buyers may acquire multiple lease terms.  Typically, concession land is used for retail or commercial buildings - not residential buildings.

6.  Are there international corporations in Costa Rica?

Yes.  Because of Costa Rica’s political stability, low taxes, and high literacy rate (96%, 2nd highest per capita in the world), Costa Rica is attracting many international corporations.  Over a hundred companies from around the world - like Pfizer, Firestone, Glaxo Smith Kline, and Intel - have operations based out of Costa Rica.  Intel’s largest plant for the manufacturing of microprocessor chips is based out of Costa Rica and the company is expanding their in-country operations.  And Walmart is expanding its retail network in the region.

7.  What is healthcare like in Costa Rica?

In a recent survey of health systems around the world, Costa Rica ranked just above the United States!  New hospitals such as the Cima-San Jose Medical Complex in Escazu (an extension of Baylor University and funded by Glaxo Smith Kline) are equipped with state of the art medical equipment and world-class specialists.  Many North Americans come here for dental care, plastic surgery, and even heart surgery, as the quality is comparable to North American health care, but prices are 50%-70% less.  In addition, many of the private healthcare facilities accept most popular international health insurance, such as Blue Cross.

8.  Are there schools that meet American standards with transferrable credits?

Yes.  Contact us for a list of schools in your area of interest.

9.  Is the process for purchasing Costa Rican property similar to that in Canada and the US?

Yes, and the following are key steps to purchasing property in Costa Rica:

• Sign an option to purchase with the seller.
• Deposit funds into escrow (if applicable).
• Title company (like Chicago Title), notary public, or attorney performs title search to ensure that property is free and clear of any defects .
• Execution or transfer of deed and funds disbursement.
• Register property with the Costa Rican National Public Registry (Registro Nacional).

10.  How do I insure my home in Costa Rica?

There are American and international companies that carry hazard, fire, and earthquake insurance policies for homes in Costa Rica.  You may also choose to insure your property through the Costa Rican government’s national insurance agency at approximately 0.3% of the appraised value of the home.

Download a PDF copy of this document:  Costa Rica Real Estate FAQ

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