Does Costa Rica have property taxes?
Yes, Costa Rica has yearly property taxes based on the value of the property but they are usually very low, typically 0.25 percent of the property value.
How do I buy and hold land? May foreigners own property in Costa Rica?
There is no restriction to property ownership by foreigners. Properties are transferred by executing a transfer or conveyance deed (escritura de traspaso) through a notary public. In Costa Rica, all notaries must be attorneys, and they are responsible for preparing and supervising the execution and recording all public-registered documents.
Properties cannot be transferred if the land does not have a registered survey, which must be referenced in the deed of transfer.
The National Registry reviews the deed and then registers the property in the name of the new owner.
The Nacional Registry will not record a transfer deed without the full payment of the transfer taxes, documentary stamps, notary fees, and property taxes.
Transfer taxes and document stamps are approximately 2.3 percent of the registered purchase price (1.5% transfer tax, 0.8% Doc. Stamps), and the law sets notary fees at 1.25 percent of the registered purchase price.
Many investors elect to have a Costa Rican Corporation hold title to their property in the form of a “Sociedad Anonima”, holding title in the name of a registered corporation provides greater flexibility in state and tax planning, liability and overall management.
We recommend having your land under a corporation name because it allows for much easier transfer of the property in case of a future sale.
An attorney is recommended to form the “Sociedad Anonima”.
We have attorneys with ample land transfer experience to assist in the creation of the corporation, or you are free to select your own.
What about closing costs?
The published legal costs for closing are:
• Legal fees are approximately 1.25%.
• Taxes: transfer tax 2.3% (1.5% transfer tax, 0.8% Doc Stamps).
• Total taxes 3.55%.
What type of financing is available in Costa Rica?
In Costa Rica there are both private and public banks and each has its own policy in relation to lending.
Generally, they finance 75% to 80% of the total appraisal value of the property.
The banks also request financial references to foreign and native applicants.
Credit mortgage Official List of requirements:
From the client.
Copy of your Identification Document, certificate of your Costa Rican I.D. residence and/or passport in case of foreigners. In the case of companies, the client must provide a copy of the company’s legal I.D. certification, the company’s legal documents and those of its legal representatives.
Copy of a utility bill (electricity, water or phone).
Original income record (public or private employees). For the self employed (either national or foreigners), a certified income is needed from a CPA (Certified Public Accountant) done within the past 90 days.
In the case of United States citizens (resident or nonresident), a certified copy of the W.2 Tax Form is needed from the last two years, and an income certification authenticated by their Consulate of Costa Rica and endorsed by the Chancellery of the country of origin for non residents of other nationalities.
Original credit report (Trans Union, Equifax, Experian) for United States citizens and protecting credit references in case of other nationalities.
Investment plan requirements
Buy and Sell options for 60/90 days term in case of purchases of lots, homes, condos, villas, farms etc.
Sealed official drawings, budgets and permits in case of construction.
Copy of the recorded drawings (Planos de Catastro) from the National Registry as guarantee.
Copy of the legal deed documents (escrituras) with legible inscription from the Public Registry.
Is title insurance available? What is the form of the title that I will receive?
Title insurance is available.
There are companies that offer title insurance as offered in the United States. Some of them are Chicago Title and Stewart title and their costs are about one percent of the purchase price.
We can order title insurance for you at the time of signing an agreement to purchase a property.
All titled property should be found in a computerized data base in the Costa Rican National Public Registry.
The only way a third-party can claim a right to a titled property is if they have a registered lien or encumbrance on such property.
All properties are transferred free and clear of any lien or legal impediment.
Are there other insurances, like general liability and property insurance available?
All other forms of insurance are available in Costa Rica:
insurance is handled by a government agency called INS (National Institute of Insurance).
However since the approval of the TLC (Free Trade Agreement) private insurance is now available.
You may purchase insurance for your home, car, life, business, and most other items through INS.
Home insurance is very reasonable in comparison to the United States. We can direct you to a certified agent in order to acquire the insurance needed.
I don’t speak Spanish, may I get around Costa Rica?
There are over 100.000 North Americans residents in Costa Rica and many Costa Ricans speak English and is taught as a second language in the majority of the public and private schools since the number one industry in Costa Rica is tourism.
Throughout the coastal areas, the majority of the residents speak English.
There are very good schools in Costa Rica in case you would like to improve your Spanish.
May I use my own attorney?
Yes, you may use your own attorney.
How long does it take to close?
Closing is very convenient and fast. It may take less than 48 hours.
Do I have to be in Costa Rica at closing?
Not necessarily, you can give a power of attorney for closing if you are not in Costa Rica.
Where can I find general facts and statistics about Costa Rica?
Costa Rica has seven provinces:
San Jose, Guanacaste, Alajuela, Heredia, Limon, Puntarenas, and Cartago.
Maps of Costa Rica and general information about Costa Rica can be viewed online at many Internet sites. (www.microsites.visitcostarica.com
What is the weather like in Costa Rica?
The weather in Costa Rica depends on the location. San Jose, the capital of Costa Rica, offers a consistent year-round temperature of about 75/80 degrees F. The beach is warmer with high temperatures in the 90s. The mountain areas can reach freezing temperatures. There are two distinct seasons in Costa Rica, a dry and rainy seasons. The dry season is usually from November through April, and the rainy season from May through October. There is very little rainfall during the dry season, and it tends to be hotter and windier. During the rainy season, there is usually an afternoon shower, which tends to create cooler temperatures.
How is the health care system in Costa Rica?
Costa Rica has an excellent medical health care system.
Most people have access to universal health care, which means that people do not hesitate to visit the doctor when needed.
The system covers everything from dentistry to maternity care to open-heart surgery.
As a result, Costa Rica’s population is very healthy and enjoys a life expectancy comparable to that of the United States.
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