Real Estate Purchase in Costa Rica: A Guide for Foreigners

Published on October 30, 2025 and written by Cyril Jarnias

Real Estate Purchase in Costa Rica

Real estate purchase in Costa Rica attracts many foreigners drawn to the natural beauty, political stability, and pleasant climate of this Central American country. However, navigating the property acquisition process can prove complex for those unfamiliar with the local legal and tax system.

Guide to Successful Investment

This article provides a detailed guide on the steps to follow for successful investment, covering crucial aspects such as:

• Property search
• Title verification
• Tax implications
• Specifics of purchase contracts

Discover how to turn the dream of owning a home in Costa Rica into a tangible reality while avoiding common pitfalls through our expert advice.

Real Estate in Costa Rica: Regulations and Obligations for Foreigners

Foreigners can purchase and own most types of real estate in Costa Rica with the same rights as Costa Rican citizens, except for specific restrictions concerning properties in maritime zones, border areas, or concessions.

Types of Properties Accessible to Foreigners:

• Titled land and houses: unrestricted access, in personal name or through a corporation.
• Properties in maritime zones (200-meter coastal zone): only a maximum of 49% can be owned by a foreigner in a concession.
• Properties located near borders, river mouths, or natural reserves: subject to specific restrictions or special permits.

Property Type	Access Rights for Foreigners	Specifics / Restrictions
Titled land / titled house	Yes, without restriction	Same rights as citizens
Property in maritime zone	Yes, but max. 49%	Municipal concession required
Property near borders	Limited or restricted	Special permits needed
Property in natural reserve	Limited or restricted	Development restrictions

Legal Requirements When Purchasing:

• Mandatory representation by a Costa Rican attorney, who also acts as a public notary.
• Signing of the transfer deed before a notary.
• Registration of the transaction with the National Registry to guarantee legal security of the property title.
• Prior verification of the title and cadastral status with the Public Registry (Registro Nacional).

Simplified Purchase Process:

1. Agreement on price and conditions.
2. Verification of property title at the National Registry.
3. Drafting of the deed by a Costa Rican attorney-notary.
4. Signing of the deed before a notary.
5. Registration with the National Registry.

Tax Obligations for Foreign Owners:

• Payment of annual property tax (0.25% of the property’s fiscal value).
• Payment of luxury tax, if applicable.
• Payment of municipal fees (services, waste collection, etc.).
• Declaration and payment of capital gains tax upon resale.

Role of the Public Registry (Registro Nacional):

• Centralizes and secures all property titles.
• Allows online or in-person consultation to verify:
  • Owner identity
  • Possible liens or mortgages
  • Limitations or easements affecting the property

Areas with Specific Restrictions:

• Maritime zone (200 meters from high tide line): the first 50 meters are inalienable (public domain), the next 150 meters are subject to time-limited municipal concessions. A foreigner cannot own more than 49% of a concession company.
• Border areas and reserves: acquisition is regulated, sometimes prohibited or requiring special permits.

Differences in Rights Between Citizens and Foreigners:

• No difference for purchasing titled land or standard real estate.
• Only maritime zone concessions impose a 49% foreign ownership limitation.

Key takeaway: In Costa Rica, access to real estate ownership is largely open to foreigners, provided legal procedures are followed, a local attorney-notary is engaged, and specific restrictions in sensitive areas (coastline, borders, natural reserves) are considered.

Understanding International Taxation for Your Real Estate Purchase in Costa Rica

Basic Principles of International Taxation in Costa Rica

Costa Rica applies a taxation system based primarily on the territoriality principle: only income generated within the country is taxable. This means foreigners and non-residents are taxed only on their income from activities or investments located in Costa Rica.

Double Taxation Agreements Signed by Costa Rica

To date, Costa Rica’s network of Double Taxation Avoidance Agreements (DTAAs) remains limited but strategic. The signed agreements mainly concern:

Country	Date/Effective Date	Main Effects for Real Estate Investors
Spain	2010	Reduction of withholding taxes, prevention of double taxation on rental income and capital gains
Germany	Since 2020	Preferential treatment of rental income, reduced tax rate
Mexico	Since 2020	Specific regulation of real estate gains
United Arab Emirates*	Most recent	Similar benefits for dividends and investments

*List may change according to tax updates.

These agreements generally allow:

• Avoiding the same income being taxed twice (in the owner/investor’s home country AND in Costa Rica).
• Reducing certain withholding taxes (e.g., on rental income or real estate capital gains).
• Obtaining clarification on tax rights allocation between states.

For example, a German investor renting a property in Jacó could benefit from a reduced withholding rate on locally received rental income thanks to the Germany-Costa Rica treaty.

Influence of Agreements for Foreign Buyers

Tax treaties can influence several decisions:

• Tax optimization: choosing an appropriate structure to minimize overall tax burden.
• Legal predictability: securing financial flows with fewer unexpected tax risks.
• Estate or wealth planning: anticipating transfer or resale without undue double taxation.

Thus, a Spanish investor could confidently plan their real estate operations knowing they won’t have to pay tax twice on rental income received in Costa Rica if they comply with the bilateral agreement conditions.

Specific Taxes Related to Real Estate Transactions and Ownership

Here are the main taxes applicable during acquisition, ownership, and transfer of real estate:

Tax Type	Current Approximate Rate	Tax Base
Property Tax (“Bienes Inmuebles”)	Approx. 0.25% per year	Municipal cadastral value
Real Estate Transfer Tax	1.5%	Declared purchase price
Rental Income Tax	Progressive up to 25%	Net rental income

Other points:

• When a non-resident sells their property, they may also need to pay capital gains tax.
• Declarative obligations exist with local tax authorities upon actual receipt of rental income or realization of gain upon resale.

Concrete example: A Mexican national buys a house valued at $200,000. They will pay about $3,000 (1.5%) as a one-time transfer tax. Each year they must pay $500 (0.25%) as municipal property tax. If they rent this property and generate $10,000/year net in legally declared tourist rental income, they will be taxed according to the progressive Costa Rican scale potentially up to 25% depending on their local tax status; however, thanks to agreements with Mexico, they can avoid – under conditions – a second taxation in their main country of residence.

Specific Tax Obligations for Non-Residents

• Mandatory annual declaration if receiving any Costa Rican income
• Payment of local (municipal) taxes + national taxes
• Compliance with administrative formalities: obtaining local taxpayer number
• Keeping transaction/transfer documentation

It is crucial for every foreign buyer to systematically consult a specialized tax advisor before any operation to avoid costly errors or future disputes with the Costa Rican tax administration

List of Essential Documents for Acquiring Real Estate in Costa Rica

Document	Description and Practical Tips
Valid Passport	All foreign buyers must present a valid passport to proceed with real estate purchase. This document is essential for any notarial or banking operation related to the acquisition. Verify that your passport is valid for the entire purchase process duration.
Residency Permit (if applicable)	A residency permit is not required to purchase real estate in Costa Rica. However, it may be requested for other administrative procedures (local bank account, taxation, etc.). It is recommended to consult an attorney about the benefits of obtaining this status based on your life or investment project.
Tax Identification Number (NIF)	Every foreign buyer must obtain a NIF to complete a real estate transaction. This procedure is done with the Costa Rican tax administration (Dirección General de Tributación). Expect to present your passport and sometimes a local address. The NIF is essential for property registration and any tax declaration related to the property.
Real Estate Purchase Agreement	This preliminary contract (Option to Purchase and Sale Agreement, SPA) sets the essential sale conditions (price, deadlines, contingencies). It is highly advised to have it drafted or reviewed by a Costa Rican real estate attorney to secure the transaction and avoid future disputes.
Property Verification	It is imperative to obtain a cadastral extract from the Registro Nacional. This document proves the legality of the property title, absence of mortgage or dispute, and specifies property characteristics (area, location, previous owners). Thorough verification helps prevent fraud and guarantees administrative compliance.
Proof of Funds	Financial institutions or the notary may require documents proving the buyer’s financing capacity: recent bank statements, fund certificates, international wire transfer proofs. Prepare these documents in advance to speed up the procedure and reassure all involved parties.
Notarial Power of Attorney	If you cannot be present during certain steps (signing, administrative procedures), it is common to designate a representative through a notarial power of attorney. This document must be authenticated and, if drafted abroad, apostilled and translated into Spanish by a sworn translator.
Final Sale Deed	The transaction must be formalized by an authentic deed before a Costa Rican notary, then registered with the Registro Nacional to ensure legal property transfer. Only this registration grants the buyer full property ownership. Ensure all documents are compliant before final signing.

Practical Tips for Gathering These Documents:

• Contact a specialized Costa Rican real estate attorney early to anticipate requirements and avoid administrative pitfalls.
• Verify validity and compliance of all documents (translations, apostilles, legalizations if necessary).
• Allow sufficient time for obtaining the NIF and potentially opening a local bank account.
• Always require presentation of titles and property certificates before any fund advance.
• If absent, appoint a trusted representative via a notarial power of attorney compliant with Costa Rican legislation.
• Always request an independent technical and environmental verification to avoid post-acquisition surprises.

Owning Property in Costa Rica: Myth or Reality for Foreigners?

Legislation and Regulations on Real Estate Purchase by Foreigners in Costa Rica

Foreigners can purchase and own real estate in Costa Rica without restrictions and enjoy the same rights as Costa Rican citizens. Costa Rican law guarantees the acquisition, ownership, and sale of land, regardless of nationality or residency status. Purchases can be made in personal name or through a Costa Rican corporation, offering additional legal protection.

Main Restrictions

• Restrictions mainly concern property acquisition in maritime zones (first 200 meters from the coast), river mouths, areas near natural reserves, and offshore islands.
• In the maritime zone, only citizens or corporations majority-owned by Costa Ricans can obtain concessions.

Property Rights for Non-Residents

• Non-residents have the same property rights as citizens.
• Residency is not required to purchase or own property. Even a visitor with a tourist visa can become an owner.

Tax Advantages and Obligations

• Acquisition costs include transfer fees (1.5% to 3%), notary fees (approx. 1.25% of price), and annual property taxes (0.25% of fiscal value).
• No specific taxes for foreigners upon purchase.
• Owners may benefit from certain tax advantages if they create a local corporation to hold the property.

Key Steps in the Purchase Process

1. Property Search: Selection via agencies, platforms, or local networks.
2. Offer Submission: Written offer submitted to seller.
3. Title Verification: Check with Registro Nacional to ensure title validity and absence of liens.
4. Contract Signing: Before public notary, often accompanied by a deposit (typically 10%).
5. Registration: Notary proceeds with property registration at Registro Nacional.
6. Final Payment: Balance of price, associated fees and taxes.

Required Documents

• Valid passport or ID.
• Written purchase-sale agreement.
• Tax identification number (for corporations).
• Certificate of no debt on the property.
• Cadastral certificate (Plano Catastrado).

Summary Table of Steps and Documents

Step	Main Document Required
Property Search	–
Purchase Offer	Written offer
Title Verification	Extract from Registro Nacional
Contract Signing	Passport, notarized contract
Registration	Cadastral certificate, notarized deed
Final Payment	Proof of payment, receipt

Common Myths and Realities

• Myth: Foreigners cannot be full owners.
  Reality: Foreigners have the same rights as citizens for titled properties outside maritime zones.
• Myth: Residency is required to purchase.
  Reality: No residency status is required; even tourists can purchase.
• Myth: There are additional taxes for foreigners.
  Reality: Taxation is identical for all owners.
• Myth: The process is risky and opaque.
  Reality: The registration system is centralized and secure, with notaries playing a key role in transaction transparency.

Why Many Foreigners Buy in Costa Rica?

• Dynamic real estate market with varied offerings: beaches, mountains, tropical forests.
• Pleasant climate year-round, with microclimates depending on regions.
• Attractive cost of living compared to Europe or North America.
• Political security and recognized legal stability.
• High quality of life: preserved environment, efficient healthcare system, welcoming population.

List of Reasons Cited by Foreign Buyers:

• Search for a natural and healthy living environment.
• Profitable rental investment (growing tourism).
• Retirement in the tropics with low tax pressure.
• Ease of integration thanks to international community.

Testimonials

“We bought a house near Tamarindo as non-residents. The process was transparent, our notary guided us at every step. The formalities were simple and we feel completely protected by the law.”
Sophie and Marc, France

“I thought it would be complicated as an American, but after verifying titles and working with a local agent, everything went smoothly. I now own an apartment with ocean view, registered in my name.”
James, United States

“Costa Rica won me over with its stability and welcome. Buying here was easier than I imagined. The procedures are clear and the market is very open to foreigners.”
Maria, Spain

Key Points to Remember

• Costa Rican laws offer high legal security for foreign buyers.
• The market is open, with few restrictions outside maritime or protected zones.
• Assistance by a notary and title verification are essential.
• Costa Rica attracts for quality of life, stability, and investment opportunities.

Costa Rica welcomes foreign investors with a secure legal framework and high transparency in real estate transactions.