The Ultimate Guide to Buying Property in Costa Rica

Are you dreaming of owning a piece of paradise in Costa Rica? With its beautiful tropical climate, relaxed lifestyle, welcoming communities and wide variety of properties, Costa Rica continues to attract buyers from around the world. Whether you're looking for a permanent home, vacation property, land or an investment opportunity, understanding how the buying process works will help you approach your purchase with confidence. In this guide, we'll walk you through the key steps of buying property in Costa Rica, from finding the right real estate agent and property to due diligence, closing costs, financing and taking ownership.

Can Foreigners Buy Property in Costa Rica?

The good news is that foreigners can generally purchase and own titled property in Costa Rica without becoming residents or citizens first. For most homes, condos and land, foreign buyers have property ownership rights similar to Costa Rican citizens and can hold the property personally or through a Costa Rican corporation.

The main exception buyers should be aware of is certain beachfront property within Costa Rica's Maritime Zone (Zona Marítimo Terrestre). Property within this area may be held under a government concession rather than conventional titled ownership, and different rules can apply.

This is something your Costa Rican real estate attorney will verify during the buying process. If you're considering beachfront property, your attorney can confirm whether it is titled or concession property and make sure the ownership structure is appropriate before you proceed.

The Buying Process in Costa Rica

Finding the Right Real Estate Agent

When looking to purchase property in Costa Rica, one of the most important steps is finding the right real estate agent. Costa Rica does not yet have one established, comprehensive MLS used by the entire real estate industry. MLS systems are developing, but participation is still limited, and many active listings are shared through individual brokerages and agent networks. This makes working with an experienced local agent especially valuable, as they can help you search across the wider market and identify properties that may not appear on a single website.

Look for an agent who specializes in the specific area you are interested in. Local expertise is invaluable.

Interview several potential agents before selecting one. Make sure your personalities mesh. Ask about their background, years of experience, number of sales, and professional approach. You want someone responsive who will have the time to dedicate to your purchase.

A seasoned agent can navigate inevitable hiccups. They’ll work closely with lawyers, inspectors, developers, and other professionals involved in Costa Rica real estate transactions. This local network helps ensure a smooth buying process.

For luxury real estate in the Papagayo area, Tony and Anna Velez of Coldwell Banker Coast to Coast Properties come highly recommended. With over 15 years of combined experience selling high-end homes in this region, they are true experts.

Take your time finding the perfect agent for you. They will be your ally securing your dream home in paradise!

Engaging a Real Estate Attorney:

An experienced real estate attorney is invaluable for navigating a Costa Rica property purchase. Here’s how they can help:

Ask your agent for recommendations. An attorney who regularly works with foreign buyers will have the expertise to guide you. Speak with a few to assess their knowledge and personality fit. This is a critical advisor by your side.

Your attorney will review all contracts to ensure terminology protects your interests. They’ll also keep close tabs on the escrow company, a neutral third party handling the money flow.

A key role is overseeing the title search. Attorney ensures no liens or encumbrances, debts or other issues are tied to the property that could become your liability. If the property you are buying is owned via a corporation, the attorney team will research it to ensure no issues exist that may affect the sale or property ownership down the line. It’s worth the peace of mind.

Your attorney will also assist with establishing a corporation structure if buying under a business entity rather than as an individual. This provides liability protection many foreigners seek.

Finally your attorney will prepare and oversee the closing process and paperwork, and ensure that the deed is registered in the Registro Nacional (national registry). In Costa Rica the deed must by notarized and not all attorneys are notaries but all notaries are attorneys, unlike other countries.

Your attorney team can also assist with post-closing activities like switching the utilities into your name, opening a bank account and ongoing legal support while you enjoy your investment property in Costa Rica.

Identifying the Right Property

Once you’ve found a real estate agent you click with, the fun part begins—touring potential properties! Your agent will ask you for a wish list of your ideal home. Ocean view or mountainside? Penthouse apartment or private villa? Knowing your must-haves and nice-to-haves helps them select listings to show. Tell your agent your search criteria:

• Price range
• Type of property – house, condo, land, etc
• Number of bedrooms/bathrooms
• Preferred location
• Special requirements:
  • Gated community
  • Pet friendly, e.g. large dogs
  • Ocean View
  • Walking distance to the beach
  • Golf course proximity
  • Etc.

Spend time seeing different options in person. Photos hardly do these homes justice. Feel the breeze on a terrace overlooking the Pacific. Meander tropical garden pathways. Indulge your senses. Your agent will arrange the showings for you. Please ensure to give them as much notice as possible on when you will be available for the tour, as it takes time to plan an effective property tour and most places require a 24 hour notice.

While in person viewings are the best, many buyers have purchased Costa Rican properties over video calls, this has become a trend since Covid and is a great option for those who can’t travel at the moment but want to secure the deal on their dream home in Costa Rica.

For each property consider proximity to beaches, restaurants, banks, hospitals, airports. What’s the neighborhood vibe? Low-key local or touristy expat? Imagine this as your new community.

Consider these questions – are you going to live there full-time or will you rent it out part of the year? Most tourists and renters prefer to be close to the beach, shopping and restaurants, and while some off-the-grid homes may seem appealing, these could be harder to rent out in the long run.

Making an Offer

Once you’ve found the right property, your real estate agent can prepare and negotiate a purchase and sale agreement outlining the purchase price, deposit, due-diligence conditions, closing date and other important terms.

In our Guanacaste market, a 10% deposit is common. The deposit is normally placed into escrow once the agreement is accepted and the escrow account has been approved.

The agreement should also clearly outline the buyer’s due-diligence conditions. These may include a home inspection, title and lien review, topographer’s or survey report, HOA-document review, inventory verification, financing conditions, permits and land-use review, and any other conditions appropriate to the property.

Negotiations can include both price and terms. Your agent will help you evaluate the seller’s response, negotiate any counteroffers and structure an agreement that works for both sides.

In the Papagayo and Guanacaste area, we commonly see due-diligence periods of approximately 21–30 days and closings around 30–45 days after agreement, although closing can be sooner or longer depending on the property and the needs of the buyer and seller.

A small holdback from the seller’s proceeds may also be used in some transactions to cover final utility bills or other amounts that have not yet been issued at closing. Your attorney and agent can advise whether one is appropriate for your transaction.

Opening Escrow

Once your offer is accepted, the next step is usually opening escrow. Costa Rican escrow providers follow Know Your Client and source-of-funds procedures, so buyers should expect to provide identification and financial documents showing where the purchase funds originated.

Starting the escrow process early helps keep the transaction moving smoothly. Requirements are generally similar between providers, although the exact documents requested can vary depending on the source of funds and the transaction.

Typical escrow documentation may include:

1. A copy of the buyer’s passport or identification.
2. A completed Know Your Client form.
3. A recent tax filing, tax assessment or similar financial documentation requested by the escrow provider.
4. Documentation supporting the source of the funds being sent to escrow, such as salary or savings records, a property sale, dividends, inheritance, a bank loan or other supporting financial records.

Please consider:

• If the origin of funds are salaries and/or savings from salaries:
  • Paystubs or W2 declaration
  • Account statements that reflect recurring incoming wires regarding salaries
  • At least three months of account statements where salaries are received or savings are allocated
• If the origin of funds are dividends payments:
  • Proof of ownership of shares*
  • Financial statements (certified by public accountant) or tax filings from the corporation*
  • Proof of dividends payments
  • At least three months of account statements where funds are allocated
• If the origin of funds is a real estate sale:
  • Closing documents (sale deed and closing statement)*
  • Proof of payment (incoming wire to your bank account)
  • At least three months of bank statements where funds are being held
• If the origin of funds is inheritance:
  • Legal document that confirms inheritance or beneficiaries*
  • Proof of funds being received
  • At least three months of bank statements where funds are being held
• If the origin of funds is a bank loan or line of credit:
  • Documents that confirm loan amount or available balance from LOC
  • Disbursement proof to bank account
    

Depending on the escrow provider, receiving bank and type of document, certain legal or financial documents may need to be certified or apostilled. Your escrow company will let you know if this is required for your transaction.

Once compliance documents are submitted, escrow will review the documents and submit a request to the receiving bank for it to approve the transaction. Said bank will inform escrow once the financial due diligence is cleared, and the client may then wire the remaining funds.

It’s important to note that the sent wire or wires need to be consistent with the origin and accounts provided for compliance purposes. If you plan to send the initial deposit and final closing amount of funds from different banks or financial institutions, all documentation from each bank/financial institution, must be supplied in the beginning process to make the final closing as smooth as possible. Please specify if you are using funds from more than one bank/financial institution.

Compiling all this paperwork can take a few days. Be sure to get it to your escrow agent as quickly as possible. The escrow company and receiving bank will review the documentation before approving the transaction, so providing the requested information promptly can help avoid unnecessary delays.

If you don’t have one of the documents initially requested, speak with your escrow company. In many cases they can help identify alternative documentation that satisfies the same compliance requirement.

Once approved, escrow will draft the escrow contract for both parties to sign. Only then can you wire your deposit to secure the property. After months of searching, these funds make it official!

If you’d like to be proactive, you can open escrow before selecting a property you want to make an offer on, this way your escrow file will be already approved and you can expedite the process of buying your Costa Rican dream home.

Conducting Due Diligence

Once your offer is accepted, the due-diligence period gives you and your professional team time to review the property in detail before closing. In our market, due diligence commonly lasts approximately 21–30 days and may include:

• Title search – Verify no other claims on the land.
• Lien search – Ensure no debts tied to the property.
• Seller’s corporation docs – If owned through a business entity, review paperwork.
• Permits and land use – Confirm zoning allows your plans.
• HOA rules – Review bylaws if part of a homeowner’s association.
• Rental commitments – review any rental commitments past the closing date of the property.

You’ll also want fresh inspections. Your agent will recommend a reputable home inspector to perform a detailed inspection and prepare a report for you identifying any issues found. In some cases you may want to bring in architects and engineers to check out more complex properties. Identify problems before closing.

If purchasing a vacant land parcel or a stand alone home, you might want to request an up-to-date survey report and have the corners staked to ensure the boundaries match the description. You don’t want surprises later.

Inventory verification is key too. Seller will remove any excluded items, like decorative fixtures or personal items. Review the inventory document what remains through photos and written lists.

Due diligence takes time but brings peace of mind. Don’t skip steps even when eager to close. A few weeks upfront prevents major headaches down the road. Lean on your agent and attorney to check all boxes.

With paperwork in order, required fixes completed and belongings sorted, you’ll be ready for the big day – keys in hand!

What if issues are found during the Due Diligence?

Most issues discovered during due diligence can be addressed or negotiated with the seller. For example, if the inspection identifies repairs, the buyer and seller may agree that the seller completes the work, provides a credit, adjusts the terms, or otherwise resolves the issue. What is reasonable will depend on the property, the negotiated purchase price and the terms of the agreement.

The due-diligence period is there to protect the buyer. If the buyer is not satisfied with one or more of the due-diligence conditions set out in the purchase agreement, the buyer can cancel during the applicable due-diligence period in accordance with the agreement and have the deposit returned.

Closing the Deal

The big day is finally here! Closing is when you officially take ownership.

Before closing, we recommend doing a final walkthrough of the property with your agent. This gives you an opportunity to confirm that everything is in order and that any items the seller agreed to address have been completed.

Your attorney and notary will coordinate the closing and prepare the necessary documents. At closing, the transfer deed is signed before a Costa Rican notary public and then submitted to the National Registry to register the property in the new owner's name.

Make sure the remaining purchase funds are received by escrow within the timeframe requested for your transaction. Your escrow company, attorney and agent will coordinate with you before closing so you know exactly what is needed. If you are signing in person, bring the same identification used in the purchase documents—typically a passport for foreign buyers.

The notary will review all contracts and read out the deed before both parties sign. Read thoroughly even though you’ve seen these before. Initial any last minute changes.

Once signed, the keys are handed over – cue the celebratory dance!

You might want to change the locks especially if the property was handled by many people with multiple key sets.

Congratulations, you now own a home in paradise! Break out the Imperial cervezas and get ready to make lifelong Costa Rican memories. Pura Vida!

How Does the Title Transfer Work?

In Costa Rica, titled property is transferred from the seller to the buyer through a transfer deed executed before a Costa Rican notary public.

At closing, the appropriate parties or their authorized representatives sign the transfer documents. The notary then submits the deed to Costa Rica's National Registry for registration.

If you can't attend the closing in person, it may be possible to authorize someone to sign on your behalf through an appropriate power of attorney. If you're purchasing through a corporation, your attorney can explain the signing options available for that transaction.

Once the deed has been processed and registered, the National Registry will reflect the new ownership. Your attorney can provide you with confirmation once the registration is complete.

Buying with Corporation or in Personal Name

Buying with Corporation

When purchasing property in Costa Rica, buyers may choose to hold the property in their personal name or through a Costa Rican corporation. Both structures are commonly used, and the best option depends on your individual circumstances and plans for the property.

Attorneys in Costa Rica often recommend corporate ownership for reasons such as liability protection, succession and estate planning. A corporation can also make it easier to structure ownership when a property has more than one owner and may help avoid probate complications if an owner passes away.

Costa Rica has different types of corporate structures, including the Sociedad Anónima (S.A.) and Sociedad de Responsabilidad Limitada (S.R.L.). Your Costa Rican attorney can explain the differences and recommend the structure that best fits your ownership, liability and succession needs.

Corporations also come with ongoing legal, accounting and tax obligations, so the decision should be made with your attorney and, where appropriate, your tax adviser—particularly if you have tax obligations outside Costa Rica.

Buying in Personal Name

Foreign buyers can also purchase titled property directly in their personal name. For some buyers, particularly those purchasing a property primarily for their own use, this can be a simple and appropriate ownership structure.

Your attorney can help you compare personal and corporate ownership before closing, taking into account liability protection, succession planning, the intended use of the property and your individual circumstances.

It's best to make this decision before purchasing. Transferring a property from personal ownership to a corporation later can create additional legal fees, transfer taxes and other costs.

Closing Costs – How much do buyers pay in Papagayo region of Costa Rica?

In the Papagayo and Guanacaste area, buyers should generally budget approximately 4–5% of the purchase price for closing costs. In most transactions in our market, the buyer pays the closing costs, although certain expenses, such as escrow, may sometimes be shared between buyer and seller depending on the agreement.

Typical closing costs buyers should expect include:

• Transfer Tax: 1.50%
• Registry and Stamp Costs: approximately 1.10% — the exact amount can vary depending on the transaction and property value.
• Notary/Legal Fees: approximately 1.30% + 13% VAT

Buyers may also have additional transaction expenses depending on the property and services required:

• Escrow services: commonly around 0.25%, often subject to a provider's minimum fee, plus VAT.
• Due diligence and legal review: varies depending on the property and the extent of the investigation required.
• Home inspection: varies by property size and complexity.
• Survey or topographer: may be recommended for land and stand-alone homes.
• Corporation setup or related legal work: varies depending on the ownership structure selected.

Before closing, certain expenses may also be prorated between buyer and seller, including property and municipal taxes, HOA fees and utilities.

As a practical rule, we advise our buyers to budget approximately 4–5% of the purchase price for closing costs. Your attorney will provide a detailed breakdown based on the purchase price and the specifics of your transaction before closing.

Is Financing available to foreigners?

Financing is available to foreign buyers purchasing property in Costa Rica, although the options and requirements can be different from those in the United States or Canada.

Bank financing is available through some Costa Rican lenders, and interest rates currently start at approximately 8% in many cases, depending on the lender, borrower qualifications, loan structure and market conditions. Buyers with Costa Rican residency may qualify for improved rates or terms with some lenders.

The application process generally requires financial documentation such as proof of income, bank statements, tax returns and information about the source of funds. Approval and funding can also take longer than many foreign buyers are accustomed to, so it's a good idea to explore financing early in your property search.

Seller financing is another option available on some properties. Terms are negotiated directly with the seller and vary from property to property. In our experience, most sellers offering financing expect approximately 50% down, with the remaining balance financed for an agreed period. Interest rate, monthly payments, term and any balloon payment are negotiated as part of the purchase agreement.

Your real estate agent can help identify properties where seller financing may be available and can connect you with lenders and professionals familiar with financing property purchases in Costa Rica.

Concession vs Fee Simple Title

Most property purchased in Costa Rica is titled property, often referred to as fee-simple ownership. However, some beachfront properties fall within Costa Rica's Maritime Zone (Zona Marítimo Terrestre) and may be held under a concession rather than conventional private title.

Titled Property

With titled property, the owner is registered with Costa Rica's National Registry and generally has the right to use, sell, lease or transfer the property, subject to applicable Costa Rican laws and regulations. Foreign buyers can generally own titled property with the same ownership rights as Costa Rican citizens.

Maritime Zone and Concession Property

Costa Rica's Maritime Zone generally extends 200 meters inland from the ordinary high-tide line. The first 50 meters are the public zone and generally cannot be privately occupied or developed. The following 150 meters form the restricted zone, where qualifying properties may be held and used through a government concession rather than conventional titled ownership.

Concessions are granted for a specified term (usually 20-25 years) and are subject to Costa Rica's Maritime Zone Law, the applicable municipality, local zoning and other requirements. Concessions may be renewed subject to the applicable legal requirements and approvals. Because the terms and status of an individual concession can vary, your attorney should review the specific concession, its term, renewal status and permitted use as part of the due-diligence process.

Foreign ownership rules can also be different for concession property, particularly for buyers who have not been residents of Costa Rica for the required period and for corporations with foreign ownership. Your attorney should review the concession and ownership structure before you purchase.

It's also important to know that not every beachfront property in Costa Rica is concession property. Some properties have registered title due to historical or legally recognized exceptions. This is why beachfront buyers should have their attorney confirm whether a particular property is titled or concession property rather than making assumptions based simply on its distance from the beach.

Both titled and concession properties can offer excellent opportunities in Costa Rica. The important thing is understanding which type of property you are purchasing, the rights associated with it and having an experienced Costa Rican attorney verify the documentation during due diligence.

Who pays the commission?

The seller pays the real estate commission most of the times unless a special agreement was made with the buyer. This may be the case where a buyer wants their agent to look for properties that don’t pay commission, such as private sales or foreclosures.

Post Closing Steps

Woohoo, the keys are yours! As a new property owner though, a few tasks remain. Make these a priority to settle into your new Costa Rican life.

Opening a Costa Rican bank account is not mandatory for owning property, but many buyers find it helpful for paying utilities, HOA fees, property expenses and other local costs. If you'd like to open one, your attorney or real estate agent can often recommend a bank and help connect you with a banking representative. Requirements vary by bank, so it's a good idea to confirm the documentation you'll need before applying.

Transfer all utilities like water, electricity and internet into your name. Same with services like pool maintenance or landscapers. Provide copies of your ownership deed – companies will need this verification. In most cases your attorney team will help with utilities’ transfer, make sure to ask, and if not ask your trusted real estate agent for help.

Prepay any annual taxes or HOA fees. Some of these are minor and can be overlooked down the road, hence getting it out of the way from day one helps to avoid issues.

While property insurance is not common in Costa Rica, review and update as needed. Property, liability, flood – ensure you have adequate coverage from day one. Shop around for quotes. Ask your agent for insurance broker recommendations.

If purchasing in a gated/HOA community, let your neighbors and HOA board know about you so you don’t miss out on any important updates and announcements.

If renting the property out, select a property manager and give them access to the property. Address any missing items or repairs needed before it can be rented out. Ask your real estate agent for recommendations on reputable property managers.

Start enjoying your new Costa Rican investment property

Conclusion

Buying property in Costa Rica can be an exciting and rewarding experience, and with an experienced local team guiding you through the process, it can also be surprisingly straightforward.

From finding the right property and negotiating the purchase to escrow, due diligence and closing, having knowledgeable professionals on your side can make all the difference.

Tony and Anna Velez specialize in helping international buyers navigate the Costa Rica real estate market, with a particular focus on Guanacaste and the Papagayo region. Whether you're searching for a full-time home, vacation property, investment, condo, luxury home or land, we're here to help you find the right property and guide you through the purchase from beginning to end.

Ready to start your Costa Rica property search? Explore our Costa Rica real estate listings or contact Tony and Anna to tell us what you're looking for. We'd be happy to help.