The Costa Rica Real Estate Expert

Don’t you wish you could turn back time, go back 10 or 15 years, and buy tons of property in Hawaii?  Don’t you wish you had the foresight back then to invest your money in inexpensive beachfront homes that would now be worth millions today?  Don’t answer that - it’s rhetorical.

Wouldn’t it be great if an opportunity like that were available now?  Well, I’m here to tell you that it is - Costa Rica.

I can hear the questions already:  “Isn’t Costa Rica in Central America?  Is it safe?  Won’t they take my land?  Don’t I need all cash to buy there?  Hasn’t the opportunity to invest in Costa Rica passed?”  There are a lot of myths about investing and owning real estate in Costa Rica that are just untrue.

In fact, in my honest opinion, Costa Rica is probably one of the safest real estate investments you can make, and one of the most profitable.  Here are some of the top reasons why you should invest in Costa Rican real estate:

10.  Numerous English speakers.  The Costa Rican government has put a lot of money into their education system, resulting in a high number of bilingual citizens that speak Spanish (their national language) and English.  There is also a large community of North American expatriates adding to this English-speaking community.

9.  Stable government and economy.  Costa Rica is also known as the “Switzerland of the Americas”.  They have a stable government and their economy is quite diverse relying on a variety of industries and not just tourism.

8.  Tourism increasing.  Currently, the supply of places for vacationers to stay does not meet the demand for the increasing number of tourists coming to Costa Rica.  Current estimates predict that this will be the case for some time.

7.  Inexpensive property taxes.  Get this - in some places, property taxes are currently as little as 0.25% of the recorded value.  Other areas may top out around 1.25%.

6.  Availability of financing.  Often developers will offer financing on their property, loaning you up to 70% of the purchase price.  North American lenders are slated to enter the Costa Rican market in the near future.

5.  Titled land.  Yes, you OWN the property.  In fact, foreigners get the same property ownership rights as Costa Rican citizens.  Don’t worry - they won’t take your land.

4.  Positive cash flow opportunities.  Based on recent historical data, there is definite potential for a minimal investment to produce a positive cash flow after a couple of years.

3.  Inexpensive beachfront property.  Okay, the days of $20,000 beachfront acreages in Costa Rica are gone.  But compared to anywhere in North America, beachfront lots are still plentiful and are still a bargain.

2.  10-30% appreciation.  Ahhhh…  Memories of the days where it was not uncommon to see double-digit appreciation rates.  Oh wait - they have that in Costa Rica right now!

1.  No capital gains tax.  Nuff said.

Costa Rica has plenty of opportunities to invest, and in some of the hottest tourist spots in the country.  Jaco Beach, an extremely popular tourist destination located in the coastal Mid-Pacific area of Costa Rica, has beachfront and beach-close investment opportunities, some starting for as little as the High-$100’s.  Of course, if your investment is a short drive from a high-tourist area, the prices could even be less.

One important thing to remember when buying real estate in Costa Rica is to work with someone who is knowledgable and has a good team to help you find an investment property that suits your needs.

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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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