Pitfalls of Buying Property in Costa Rica

Last reviewed: September 2026. Buying property in Costa Rica can be an excellent way to own a home, retire, relocate or invest. Foreign buyers can own titled property, and the process is very manageable when the right checks are completed before closing. This guide focuses on the most common buying pitfalls—not to discourage buyers, but to show how good due diligence helps prevent surprises.

1. Treating All Coastal Property Like Ordinary Titled Property

One of the most important distinctions in Costa Rica is between ordinary titled property and property within the Maritime-Terrestrial Zone (Zona Marítimo Terrestre).

The Maritime Zone generally extends 200 meters inland from the ordinary high-tide line. The first 50 meters are the public zone, while the following 150 meters are generally the restricted zone where concessions may be possible subject to the applicable law, municipal plan and approvals. Concession rights are different from fee-simple titled ownership and foreign ownership rules are more restrictive.

How to avoid the pitfall: Have your Costa Rican real-estate attorney confirm whether the property is titled, concession property or affected by another special regime before you sign based on assumptions about ownership.

2. Skipping an Independent Title and Registry Review

Costa Rica has a centralized National Registry, which is a major advantage for buyers, but a registry search still needs to be interpreted correctly. Your attorney should review the property's current folio real, registered owner, liens, mortgages, annotations, easements and other relevant registry information.

Title insurance is not as routinely used as it is in some North American transactions, so legal due diligence is particularly important.

How to avoid the pitfall: Use your own qualified Costa Rican attorney or notary for the transaction and have the registry position reviewed before closing.

3. Assuming the Survey Plan and What You See on the Ground Are the Same

The registered cadastral plan (plano catastrado) is an important part of property due diligence. Fences, driveways, walls and informal occupation on the ground do not automatically establish the legal boundary.

How to avoid the pitfall: Review the registered cadastral plan and, when boundaries, access, acreage or development potential are important to the purchase, consider having a qualified surveyor confirm the physical situation.

4. Not Confirming Legal Access

A road that people have used for years is not necessarily the same thing as legally registered access. This is especially important for rural land, development parcels and properties reached through neighboring land.

How to avoid the pitfall: Have your attorney verify public-road frontage, registered easements and any other legal access rights rather than relying only on the route used during a showing.

5. Assuming You Can Build Whatever You Want

A beautiful lot does not automatically mean every proposed project can be approved. Land use, zoning, setbacks, environmental restrictions, road frontage, water availability, wastewater requirements, slope and other conditions can affect development.

How to avoid the pitfall: If your purchase depends on building, subdividing or developing, make those objectives part of your due-diligence plan. Confirm the applicable uso de suelo, water situation and other project-specific requirements with the appropriate professionals and authorities before the transaction becomes unconditional.

6. Overlooking Water Availability

Water is a particularly important issue for land and new construction in Costa Rica. Seeing neighboring homes or a nearby water line does not by itself prove that your proposed project will receive the water documentation needed for permits.

How to avoid the pitfall: Determine what current water availability or service documentation applies to the specific property and intended project, and have your attorney, architect or engineer confirm what will be needed for permitting.

7. Confusing Municipal Property Tax With the Solidarity Tax

Ordinary municipal real-property tax in Costa Rica is generally 0.25% of the registered taxable value per year. The separate Solidarity Tax applies only to qualifying higher-value residential construction and fixed installations above the annual threshold, using progressive rates.

Older discussions sometimes combine these two taxes and give the impression that ordinary property tax rises into the Solidarity Tax rate range. They are separate obligations.

How to avoid the pitfall: Confirm the property's municipal tax status, declared value and whether the Solidarity Tax applies. For current thresholds and tax treatment, verify with the relevant authority or your Costa Rican accountant or attorney.

8. Budgeting From a Generic Closing-Cost Percentage

Buyers often hear a single percentage quoted for Costa Rica closing costs. That can be useful for rough planning, but actual costs depend on the transaction, declared transfer value, legal/notarial work, escrow, financing, corporate structure and other circumstances.

How to avoid the pitfall: Request a transaction-specific closing estimate before you commit. Our Costa Rica closing-cost guide explains the main cost categories and current tax considerations in more detail.

9. Buying Through a Corporation Without Understanding the Ongoing Obligations

A Costa Rican corporation can be useful in some ownership structures, but it is not automatically the best choice for every buyer. Corporate ownership can bring annual filings, taxes, beneficial-owner compliance, accounting or administrative obligations depending on the entity and circumstances.

How to avoid the pitfall: Choose personal or corporate ownership with advice from your attorney and accountant based on your estate planning, liability, tax and practical goals—not simply because someone says all foreigners should buy through a corporation.

10. Assuming a Property Purchase Automatically Creates Residency

Foreigners do not generally need Costa Rican residency to buy ordinary titled property. Property ownership and immigration status are separate issues.

If residency is part of your plan, Investor residency may be relevant. The last clearly established reduced investment threshold under Law 9996 was US$150,000 during its five-year statutory window. Because that period has ended, verify the current Inversionista threshold and qualification rules before relying on a purchase for residency.

See our Investor Residency vs. Rentista Residency guide for the last-known amounts and what buyers should verify now.

11. Underestimating Infrastructure Differences

Infrastructure varies considerably by location. Some established Guanacaste communities have reliable electricity, fiber internet, paved access and nearby services; more remote properties may have different road, water, internet or backup-system considerations.

The old stereotype that buyers should expect poor utilities everywhere in Costa Rica is too broad. The better approach is property-specific verification.

How to avoid the pitfall: Check internet providers, electricity, water, road conditions, drainage and travel times at the specific property. If you plan to work remotely or operate a vacation rental, test the services that matter to you.

12. Ignoring HOA or Condominium Rules

For condominiums and gated communities, review the condominium declaration, regulations, HOA fees, budgets, special assessments and restrictions that may affect pets, renovations, rentals or other intended uses.

How to avoid the pitfall: Make HOA or condominium documents part of due diligence and confirm that your intended use is compatible with the rules.

13. Assuming Vacation-Rental Income Is Guaranteed

A property can be attractive and still produce very different rental results depending on location, seasonality, management, furnishing, operating expenses, platform fees, taxes and competition.

How to avoid the pitfall: Underwrite rental property conservatively. Ask for actual historical performance when available, distinguish gross revenue from net income and do not base a purchase solely on an optimistic projection.

Our Costa Rica Real Estate Investment Guide 2026 covers rental underwriting and investment due diligence in more detail.

14. Using the Seller's Team Without Building Your Own Advisory Team

A good transaction is collaborative, but buyers should understand who represents whom. Your real-estate agent helps with the property search, negotiation and transaction coordination; your attorney handles legal due diligence and closing; surveyors, architects, engineers, accountants and other specialists may be appropriate depending on the property.

How to avoid the pitfall: Build a team whose responsibilities are clear and use independent professional advice for matters outside the real-estate agent's role.

15. Choosing a Property Before Understanding the Location

Costa Rica is highly local. Beach towns only a few kilometers apart can have very different lifestyles, road access, services, rental patterns and property types.

In Guanacaste, for example, Playas del Coco, Playa Hermosa, Playa Ocotal, Playa Flamingo, Potrero and Tamarindo each suit different buyers.

How to avoid the pitfall: Spend time in the communities you are considering and choose the location based on how you actually expect to use the property.

A Safer Costa Rica Property-Buying Checklist

• Confirm whether the property is titled, concession or subject to another special ownership regime.
• Verify the registered owner, liens, annotations and easements.
• Review the cadastral plan and boundaries.
• Confirm legal access.
• Check zoning and intended use before buying land for a specific project.
• Confirm the water situation and project-specific permitting requirements.
• Review municipal taxes and any applicable Solidarity Tax obligations.
• Obtain a transaction-specific closing-cost estimate.
• Review HOA or condominium documents where applicable.
• Choose the ownership structure with legal and tax advice.
• Underwrite rental income conservatively if the property is an investment.
• Use qualified professionals for legal, survey, engineering, tax and other specialized due diligence.

Frequently Asked Questions

Can Americans and Canadians buy property in Costa Rica?

Yes. Foreign buyers can generally own ordinary titled Costa Rican property with ownership rights comparable to Costa Rican citizens. Special rules apply in the Maritime-Terrestrial Zone and certain other protected or restricted areas.

Do I need residency before buying a house in Costa Rica?

No. Residency is generally not required to purchase ordinary titled property. If you want your investment to support an Investor residency application, verify the current immigration threshold and documentation rules separately.

What is the biggest mistake foreign buyers make?

There is no single mistake, but many problems come from assuming that visible conditions—such as a road, fence, water line or existing use—automatically establish the corresponding legal right. Good due diligence verifies the registry, survey, access, land use, water and transaction documents.

Is buying property in Costa Rica risky?

Every real-estate market has risks, but Costa Rica has an established property registry and a well-used legal closing process. The goal is not to avoid Costa Rica real estate; it is to identify the specific property risks before closing and structure the transaction appropriately.

Planning to Buy Property in Guanacaste?

We work with international buyers throughout Guanacaste and can help you compare communities, identify suitable properties and coordinate the real-estate side of your due diligence with the independent professionals you choose.

Contact Tony & Anna Velez to discuss your Costa Rica property search.

Disclaimer: This article provides general educational information and is not legal, tax, immigration, engineering or investment advice. Rules, thresholds, administrative practices and property-specific requirements can change. Verify material decisions with the appropriate Costa Rican authority and qualified professional.