Purchasing Property in Costa Rica: The decision to purchase real estate in a foreign country can at first be a daunting proposition. However, it is possible to safely buy property in Costa Rica with the assistance of a reputable Realtor and attorney. Your Realtor should be able to help you to locate property suitable to your needs, educate you as to property values and other considerations in your chosen area, and assist you with negotiating a fair price. You should also use an attorney (Certified Public Notary) with a good reputation who can handle the financial aspects of the transaction and ensure that you will have legal title to your property.
Title Insurance: Is available in Costa Rica through well-known international companies such as First American Title Insurance, Stewart Title and Fidelity Life.
Ownership: It is possible to purchase Real Estate through direct transfer where one or more individuals acquire property in their personal name. Purchasing properties through a new or existing corporation is also very common in Costa Rica. The process of setting up a corporation is not complicated or expensive, but requires the expertise of your attorney to follow the legal protocols involved.
The Public Registry of Properties: All property in Costa Rica should be registered in the Public Registry of Properties, whether the property is fee simple or concession. By means of the Public Registry of Properties your attorney will be able to confirm that the seller possesses ownership of the property, and to discern if there are any restrictions on the property before the deal goes through. Avoiding the purchase of unregistered property is strongly recommended.
Folio Real Numbers and Catastrado: Each property registered in the Public Registry of Properties has a Folio Real Number, which is the unique number assigned to each property to identify it. The number is comprised of three parts, the first number indicates the province, the second group of six numbers is the number of the property itself, and the last group indicates how many owners the property has. All properties must have this number in order for clear title to be obtained. Each registered property also has a survey plan, or cadastral. In order to transfer, mortgage, or acquire a property, the survey plan must be recorded at the Public Registry of Properties.
Property taxes: In Costa Rica are very low, only ¼ of 1% of the registered property value. Certain standard closing costs are required in Costa Rica to transfer the title of a property from the seller to the buyer, and are usually split between the two. Closing Costs: Include: (1) Real Estate Transfer Tax, which is 1.5% of the registered value of the property on the deed; (2) Documentary Stamps, which total approximately 1.25% of the registered value; (3) The Notary Fee, which is 1.5% of the first million Colones and 1.25 % on the balance of the property sales price. This means on the purchase of a $100,000 property, closing costs would be approximately $4.250 and property taxes $250 per year or lower.
Financing: If you need to borrow funds, it is generally far simpler and interest rates are usually lower in your home country. However, if your credit rating is impeccable, financing in Costa Rica may be available. Some banks, such as the Bank of Nova Scotia, offer financing to foreigners. Usually the bank will finance somewhere between 40 and 50% of the purchase. Current rates could be easily obtained from local banks. Certain projects and/or private owners may also offer some kind of financing arrangement. Your realtor should be able to tell you which projects and owners offer financing.
Dominical Dot Biz Real Estate Services provides a team of real estate professionals educated to answer your questions about purchasing property, and are dedicated to helping you through the steps required to safely purchase your dream property in beautiful Costa Rica.