A Complete Guide to Buying Property in Costa Rica as a Foreigner

Costa Rica has long attracted foreign investors drawn by its stable democracy, stunning landscapes, and favorable property laws. Whether you are looking for a beachfront vacation home, a mountain retreat, or a commercial investment, understanding the legal framework is essential before committing your capital.

Can Foreigners Buy Property in Costa Rica?

Yes. Under Costa Rican law, foreigners enjoy the same property ownership rights as citizens. You do not need residency or a special permit to hold title to land. The one significant exception is the Maritime Zone (Zona Maritimo Terrestre, or ZMT), which covers the first 200 meters from the high-tide line along most of the coastline. Within the ZMT, ownership is restricted and concession-based, requiring special legal treatment discussed below.

The Buying Process Step by Step

1. Property Search and Letter of Intent

Once you identify a property, the buyer typically submits a letter of intent (LOI) or offer, outlining the price, conditions, and proposed timeline. A good-faith deposit of 5-10% is customary and should be held in an escrow account managed by a neutral third party or your attorney.

2. Due Diligence Period

This is the most critical phase. During a 30-60 day window, your legal team verifies title, surveys, tax status, municipal compliance, and environmental restrictions. Never skip or rush this step.

3. Purchase Agreement

Once due diligence is satisfied, both parties sign a formal purchase-sale agreement (contrato de compraventa). This contract sets forth the final price, closing date, representations, and warranties.

4. Closing and Registration

Closing takes place before a Costa Rican notary public, who holds the authority to formalize the transfer deed. The notary prepares the escritura (public deed), collects taxes and fees, and submits the document to the National Registry (Registro Nacional) for inscription. Title officially transfers upon registration.

Due Diligence Essentials

A thorough due diligence review should include:

• Title search at the National Registry to confirm clean ownership and identify any liens, encumbrances, or annotations.
• Plano catastrado (registered survey map) to verify boundaries, area, and that physical possession matches the registry.
• Municipal verification of property taxes, building permits, and zoning compliance.
• HOA documentation review if the property is within a condominium or planned community.
• Environmental restrictions analysis, particularly near protected areas, rivers, or forested land.
• Squatter risk assessment to confirm no third parties claim possessory rights over the land.

Closing Costs Breakdown

Buyers should budget approximately 3.5-4.5% of the purchase price in closing costs:

Cost	Approximate Rate
Transfer tax	1.5%
Registration fees	0.5%
Notary fees	1-1.5%
Legal fees	1-1.5%
Documentary stamps & misc.	0.25%

Transfer tax and registration fees are typically split between buyer and seller by custom, though this is negotiable.

Corporate vs. Personal Ownership

Buyers can hold property in their personal name or through a Costa Rican legal entity:

• Sociedad Anonima (S.A.): The traditional corporate vehicle. Offers privacy and ease of transfer (selling shares rather than the property itself avoids transfer tax). However, S.A.s now carry annual corporate tax obligations.
• Sociedad de Responsabilidad Limitada (S.R.L.): A limited liability company with fewer formalities and lower annual taxes. Increasingly popular for property holdings.
• Personal name: Simpler and avoids corporate maintenance costs, but transfers always trigger transfer tax and notary fees.

Your attorney can advise on which structure best fits your situation based on tax planning, estate considerations, and long-term goals.

Maritime Zone (ZMT) Considerations

Property within the first 200 meters of the high-tide line falls under the Maritime Zone Law. The first 50 meters is public zone where no private use is allowed. The next 150 meters is the restricted zone, where occupancy requires a concession granted by the local municipality. Foreigners may only hold a ZMT concession if they have been a Costa Rican resident for at least five years, or if they hold it through a corporation where at least 50% of shareholders are Costa Rican. ZMT transactions demand specialized legal counsel.

Tips for Foreign Buyers

1. Hire a reputable, independent attorney. Never rely on the seller’s lawyer or a real estate agent for legal advice. Your attorney should work exclusively in your interest.
2. Never skip due diligence. Verbal assurances are not substitutes for documented verification.
3. Understand squatter risks. Costa Rican law provides certain protections for occupants who have possessed land openly and continuously. Verify physical possession before closing.
4. Confirm seller identity. Ensure the person signing the deed is the registered owner, and if married under community property, that spousal consent is obtained.
5. Use escrow. Always deposit funds in a secure escrow arrangement rather than paying the seller directly before closing.

Work With an Experienced Costa Rica Real Estate Attorney

Buying property in Costa Rica can be a smooth and rewarding experience when you have the right legal guidance. At Funes & Matthys, we have helped hundreds of foreign investors navigate the purchase process with confidence. From due diligence through closing and registration, our bilingual team ensures your investment is protected at every stage.

Contact Funes & Matthys today to schedule a consultation about your Costa Rica property purchase.