Buying Real Estate: Costa Rica vs. Neighboring Countries – A Comparison

Published on October 30, 2025 and written by Cyril Jarnias

Real Estate Comparison: Costa Rica vs. Neighboring Countries

In a context where real estate investment proves to be a favored strategy for many investors, the choice of country becomes crucial to maximize returns while minimizing risks. This comparison examines the real estate market in Costa Rica and its neighboring countries, such as Panama and Nicaragua, highlighting the advantages and disadvantages associated with each destination.

While Costa Rica attracts with its political stability, progressive environmental policies, and ever-increasing tourist appeal, Panama, bolstered by its global commercial influence, offers attractive tax opportunities for investors. Nicaragua, despite its economic and political challenges, is beginning to attract attention due to its lower entry costs.

This guide therefore explores these dynamics in depth to help readers make an informed choice based on their investment priorities.

Analysis of the Real Estate Market in Costa Rica and Neighboring Countries

Current Trends in Costa Rica

• Average Price per Square Meter (2025)
  • In the city: approximately €2,475.81 (min. €1,554.85, max. €4,579.08)
  • In the countryside: approximately €1,333.86 (min. €788.35, max. €1,840.09)
  • Varies by region and property type

Region (Examples)	Average Price/m² (CRC)	Property Type
Puerto Viejo de Talamanca	856,962 – 1,166,169	Apt. / House
Santa Ana	1,042,582 – 795,993	Apt. / House
San José	1,164,808 – 624,413	Apt. / House
Jaco	1,330,808 – 1,093,285	Apt. / House
Tamarindo	1,914,793 – 1,420,158	Apt. / House

• Attractive Regions for Investors
  • Guanacaste (beaches, international tourism)
  • Central Valley (San José, Escazú, Santa Ana: stability, services)
  • Coastal areas like Tamarindo, Jaco, Manuel Antonio (high tourist demand)

• Types of Properties in Demand
  • Luxury condos and villas in tourist zones
  • Single-family homes for expatriates (Central Valley, beaches)
  • Tourist rental properties (Airbnb, seasonal rentals)

Influencing Factors

Tourism: a major driver of demand, particularly on the Pacific and Caribbean coasts

Expatriate community: strong in Costa Rica, stimulating demand for higher quality properties

Foreign ownership policies: no major obstacles, foreigners can buy on the same terms as locals (except protected maritime zones)

Comparison with Neighboring Countries

Country	Price/m² City (€)	Attractive Regions	Foreign Ownership	Eco. Stability	Influence of Tourism & Expats
Costa Rica	2,475.81	Guanacaste, Central Valley, Jaco	Easy, except public coastline	High	Very strong
Nicaragua	900 – 1,200	San Juan del Sur, Granada	Restrictions on certain lands	Low to medium	Moderate
Panama	1,800 – 3,000	Panama City, Boquete, Bocas del Toro	Very easy, tax incentives	Good	Strong (especially Panama City)
Belize	1,200 – 2,200	Ambergris Caye, Placencia	Easy, simplified procedure	Medium	Strong (English-speaking tourism)

• Investment Opportunities
  • Costa Rica: stability, mature market, appreciation potential, but higher prices.
  • Nicaragua: attractive prices, but political instability and lower legal security.
  • Panama: attractive taxation for retirees and expatriates, strong urban growth, increased transparency.
  • Belize: developing market, appeal for North American investors, English as official language.

• Government Regulations
  • Costa Rica and Panama: simple access to property for foreigners.
  • Nicaragua: complexity in some cases, especially for areas near the coast.
  • Belize: favorable environment, few restrictions.

• Economic Stability
  • Costa Rica and Panama: considered the most stable in Central America.
  • Nicaragua: political and economic volatility.
  • Belize: relative stability, but smaller market.

Influence of Tourism, Expatriates, and Ownership Policies

Tourism: key factor in property valuation, especially in Costa Rica and Panama.

Expatriate community:

• Costa Rica, Panama: strong presence, adapted infrastructure.
• Nicaragua, Belize: growing communities, but sometimes limited infrastructure.

Foreign ownership policies:

• Costa Rica, Panama, Belize: simple procedures, transparent markets.
• Nicaragua: caution required, due to instability and land legislation.

Forecasts and Recommendations for Investors

2025-2027 Forecasts

• Costa Rica: continued moderate price increases, especially on the Pacific coast and Central Valley.
• Panama: sustained growth, particularly in urban and mountain areas (Boquete).
• Nicaragua: price volatility depending on the political situation.
• Belize: slow progression, but opportunities in hospitality and seasonal rentals.

Recommendations

• Prioritize Costa Rica or Panama for security, stability, and market liquidity.
• Explore Belize for longer-term investments in still underdeveloped areas.
• Avoid purchases in high-risk or complex legislation areas, particularly Nicaragua.
• Consider the strength of tourism and expatriate presence to maximize rental yield.

For investors seeking security and appreciation potential, Costa Rica and Panama offer the best prospects, while Belize presents a niche market to watch. Caution remains advised in Nicaragua, despite very attractive prices.

Real Estate Price Comparison: Costa Rica vs Neighboring Countries

Country / Region	Average Price per m² (USD)	Average Price per m² (EUR)	Most Expensive Areas	Least Expensive Areas
Costa Rica (national)	1,021 – 1,300	2,475.81	Tamarindo, Nosara, Santa Teresa	Cartago, GAM peripheries
Panama (city)	2,100 – 2,600	~2,000 – 2,400	Panama City center, Coronado	David, rural areas
Nicaragua	800 – 950	~740 – 880	Managua center	Leon, Granada
Honduras	700 – 850	~650 – 780	Tegucigalpa center	La Ceiba

Prices vary by precise location and property type. Euro conversions are indicative.

Factors Influencing Price Differences:

• Political stability:
  • Costa Rica and Panama offer notable stability compared to their neighbors.
  • Nicaragua and Honduras experience more political instability.
• Economy:
  • Sustained growth and strong currency in Costa Rica; stable dollarized economy in Panama.
  • More fragile economies for Nicaragua and Honduras.
• Tax policies:
  • Significant tax attractiveness for foreign investment in Panama (frequent exemptions).
  • Relatively favorable taxation in Costa Rica but increasing regulation on foreign real estate.
• Tourist attractiveness:
  • Mass influx of foreigners in Costa Rica’s coastal regions: strong seasonal rental demand.
  • Increased development of beach tourism in Panama; moderate growth for Nicaragua/Honduras.

Recent Real Estate Market Trends:

• In Costa Rica:
  • Continuous price increase since the pandemic (+16% between late 2023 and early 2025).
  • Major push on the North Pacific coast due to foreign investment and land scarcity in the central valley.
  • Appreciation of the colón against foreign currencies which increases investment costs for some expatriates.
• In Panama:
  • Slight post-COVID recovery driven by the arrival of South American/European expatriates seeking economic/fiscal stability.
• In Nicaragua & Honduras:
  • Low market dynamism. Prices remain low due to persistent political uncertainties. Lesser impact from the pandemic but little rebound after the health crisis.

Key Points Raised by Potential Buyers or Real Estate Experts:

“I chose to invest in Costa Rica despite a higher cost because it’s a safe country with excellent quality of life and strong year-round tourist rental demand.”

— Canadian expatriate buyer

“The Panamanian market remains attractive tax-wise but you must target modern central neighborhoods or high-end coastal areas to hope for real appreciation.”

— International real estate agent

“Outside of major regional or tourist capitals like Granada in Nicaragua or La Ceiba in Honduras, there is little liquidity in these markets… The risks are higher but it can appeal to those looking for a very low entry ticket.”

— Regional consultant

Main Visual Takeaways:

Approximate Evolution of Average Urban Residential Price/m² in USD
Costa Rica      ──────▇▇▇▇▇► continuous increase
Panama          ──────▇▇► moderate increase
Nicaragua       ──────▬► stable/low
Honduras        ──────▬► stable/low

Synthetic List of Main Criteria When Choosing Country/Region:

• Legal/political security
• Actual vs expected rental yield
• Administrative/tax ease for foreigners
• Local tourist potential/direct international access

Real Estate Taxation: Costa Rica Compared to Its Neighbors

Country	Property Tax Rate	Capital Gains Tax	Exemptions/Reductions for Foreigners	Tax Procedures	Recent Reforms
Costa Rica	0.25% of cadastral value	Taxed on gain upon sale (generally 15%)	No specific exemptions for foreigners, but non-residents are treated like residents for property	Annual payment to municipality; simple declaration	Tax stability, no major recent reforms affecting real estate taxation
Panama	Progressive: 0% to 1% depending on value and property age; exemption up to 20 years for new properties ≤$120,000	10% on capital gain generally	Generous exemptions for new properties, retirees, and certain tourism investments	Annual declaration and payment, simplified digital procedure	Enhanced tax incentives for sustainable and tourism investment since 2024
Nicaragua	1% on cadastral value (after deduction of first bracket)	10% on capital gain	No notable exemptions for foreigners; uniform tax regime	Payment to local authorities, sometimes complex procedures	Few reforms, market affected by political instability
Guatemala	Approx. 0.9% to 0.98% depending on value	10% on capital gain	No major exemption for foreigners	Annual payment, standard administrative steps	No major recent tax reforms

Additional Details:

Costa Rica

• Advantage: Very low and stable property taxation, simplicity of procedures, no discrimination towards non-residents.
• Disadvantage: Absence of specific exemptions for foreigners or investors, progressive price increases in sought-after areas.
• The capital gains tax generally applies at 15% of the net gain, except for primary residences under certain conditions.
• Real estate investment remains attractive for foreigners, with rights identical to those of nationals.

Panama

• Advantage: Property tax exemption up to 20 years on new properties and attractive measures for retirees; progressive rate limiting tax burden.
• Disadvantage: More complex system, stricter declaration obligations, frequent reforms that can bring uncertainty.
• Since 2024, new tax benefits encourage investment in ecotourism and sustainable construction.

Nicaragua

• Advantage: Very low acquisition and living costs, relatively simple taxation.
• Disadvantage: Political instability, lower legal security, few tax advantages for foreigners.
• Taxation on capital gains and property is uniform, without particular incentives.

Guatemala

• Advantage: Relatively moderate taxation, accessible market.
• Disadvantage: No particular advantages for foreign investors, standard administrative procedures.

Tax Implications for Residents and Non-Residents:

In all these countries, non-residents can own real estate and are subject to the same rates as residents.

In Costa Rica and Panama, the payment procedure is annual and done mainly via the municipality or online.

Real estate capital gains are taxed upon sale, generally via withholding at source.

Recent Reforms and Impact on the Market:

– Panama introduced incentive measures targeting sustainable investments, strengthening attractiveness for foreigners in tourist and ecological real estate.

– Costa Rica maintains a stable tax policy, without significant increases in real estate taxes, which reassures investors.

– Nicaragua and Guatemala have not introduced major recent reforms, but institutional stability remains an issue.

Advantages of Real Estate Taxation in Costa Rica:

• Very low and stable property tax rate.
• Simple procedures and absence of discrimination towards foreigners.
• Predictable tax environment, legal security superior to that of Nicaragua or Guatemala.

Disadvantages:

• No specific exemptions or reductions for new foreign investors, unlike Panama.
• Rapid price increases in attractive areas.

Summary of Regional Tax Choices for the Real Estate Investor:

• Costa Rica: stability and simplicity, low rates but few incentives.
• Panama: advantageous taxation for new investments and retirees, more complex system.
• Nicaragua: low entry cost, but political and tax risks.
• Guatemala: neutral taxation, without major incentives or barriers.

For a foreign investor seeking stability and tax predictability, Costa Rica remains a safe bet, while Panama will appeal to those prioritizing short-term exemptions and sectoral incentives.