Navigating Real Estate Investment in Costa Rica: A Guide for Senior Expats
- Lic. Oscar Andrés López Hernández Attorney-at-Law
- Jan 3
- 6 min read
Updated: Apr 20
Costa Rica has become one of the most attractive destinations in Latin America for foreign real estate investment. Democratic stability, strong legal institutions, and a robust system for the protection of private property have positioned the country as a reliable jurisdiction for international investors. From a legal standpoint, Costa Rica offers a particularly favorable framework for foreign individuals seeking to acquire real estate.
Understanding Legal Framework for Foreign Investors
Article 19 of the Costa Rican Constitution establishes the principle of equality between nationals and foreigners regarding rights and obligations. This means that a foreign individual may acquire real property in Costa Rica without holding citizenship or legal residency. Generally, there are no restrictions preventing foreigners from holding full ownership of private real estate, except in specific areas regulated by law.
Exceptions to Ownership
One of the main exceptions applies to the Maritime–Terrestrial Zone, governed by Law No. 6043. Under this statute, foreign individuals and corporations with more than fifty percent foreign ownership may not hold concessions within the coastal strip extending one hundred fifty meters inland from the high-tide line. This restriction applies unless the foreign individual has held legal residency in Costa Rica for at least five years. Additionally, legislation applicable to border zones restricts the acquisition of land located within the first two kilometers of land borders for reasons of national security. Practical limitations may extend up to fifty kilometers for direct purchases by foreigners.
Outside these specially regulated areas, foreign investors enjoy full legal certainty when acquiring real estate in Costa Rica. Nevertheless, the success of a real estate transaction depends not only on the legal framework but also on proper legal due diligence prior to closing.
The Importance of Legal Due Diligence
Legal due diligence is the cornerstone of a secure acquisition. Costa Rica maintains a centralized and public National Property Registry in which all real property rights are recorded. Before proceeding with a purchase, it is essential that a trusted attorney and notary public review the property’s registry status. This confirms that the seller is the lawful owner, that the registry information matches the current deed, and that the property is free of mortgages, liens, judicial annotations, easements, or other encumbrances.
Steps in Due Diligence
A complete registry review includes obtaining a literal certification issued by the National Registry. This reflects the property’s ownership history and any registered burdens. This review should be complemented by a physical inspection of the property to verify boundaries, access, and possession status. Additionally, confirmation of zoning regulations and any urban, environmental, or regulatory restrictions is crucial. Where special concessions apply, such as properties located within the Maritime–Terrestrial Zone, it must be verified that the concession was validly granted by the competent municipality and complies with all legal requirements. If potential liabilities or contingencies are identified, it is common practice to recommend holding a portion of the purchase price in escrow or trust until such issues are resolved.
Closing the Deal: What You Need to Know
From a formal perspective, real estate transfers in Costa Rica must be executed by means of a public deed before a notary public. The deed must include the full identification of the parties, the registry description of the property, the purchase price, payment terms, and all legally required declarations. Ownership is legally transferred only upon registration of the deed with the National Registry, a process handled by the notary public.
Understanding Closing Costs
Closing costs include the Real Property Transfer Tax, assessed at one point five percent of the property’s value. Beneficiaries under Law No. 9996, including investors, rentistas, and pensioners, may qualify for a twenty percent reduction of this tax. Additional costs include fiscal stamps and notarial fees, which together typically amount to approximately two point five percent of the transaction value. Unless otherwise agreed, these costs are customarily borne by the buyer. When a transaction is structured through the sale of shares of a property-owning corporation, the legal and tax treatment differs, making specialized legal advice essential.
Ongoing Obligations After Purchase
Following the acquisition, property owners must comply with ongoing tax obligations. These include the Annual Property Tax, equivalent to zero point twenty-five percent of the registered property value, payable to the corresponding municipality. This declared value must be updated every five years. Depending on the construction value, the Luxury Home Tax under Law No. 8683 may also apply.
If the property is used as a rental investment, rental income sourced in Costa Rica is subject to local income tax. Owners may elect to be taxed under the ordinary regime, applying progressive rates to net income, or opt for the presumed rental income regime, which applies a flat fifteen percent tax on gross rental income without deductions. Since 2019, Costa Rica has also imposed a fifteen percent capital gains tax on the sale of assets, including real estate, subject to limited exemptions such as the sale of a taxpayer’s primary residence.
Common Pitfalls to Avoid
In practice, many legal disputes involving foreign buyers stem from avoidable mistakes. Common errors include failing to retain independent legal counsel, neglecting a comprehensive legal review of the property, overlooking environmental or regulatory requirements, and misunderstanding the distinction between full ownership and concession rights in coastal areas. Another recurring risk involves postponing the execution and registration of the public deed and relying solely on private agreements or powers of attorney, leaving the buyer exposed to third-party claims.
Conclusion: Secure Your Investment with Confidence
In general, purchasing real estate in Costa Rica constitutes a secure investment supported by a strong constitutional and legal framework for the protection of private property. However, effective protection ultimately depends on thorough due diligence and proper legal structuring of the transaction. This becomes especially relevant when the acquisition forms part of an immigration strategy, as residency eligibility may depend on the ownership structure and how the investment is documented.
At Expat Legal Advisors, we advise foreign investors and buyers through every stage of the Costa Rican real estate acquisition process. We combine real estate, tax, and immigration law expertise. Our role is to provide legal certainty from initial due diligence through final closing while ensuring that each transaction is properly structured and aligned with the client’s broader legal and investment objectives. If you are considering purchasing property in Costa Rica, you may schedule an initial 30-minute consultation with our legal team.
Property Management for Senior Expats in Costa Rica: Your Trusted Partner After Closing
Buying property in Costa Rica is just the beginning. What happens after closing day? If you're purchasing a home you won't live in full-time — or buying for a parent who's relocating — the real question becomes: who's looking after it when you're not there? That's where I come in.
I'm Tere, founder of Expat Senior Concierge — the only property management and concierge service in Costa Rica with diplomatic experience.
Why Work With Me
Personal, not corporate. When you work with me, you work with me. Not a rotating team, not a call center, not an app. You get my direct attention, my personal WhatsApp, and my word.
Built on trust and discretion. My background includes managing high-end residences where precision, confidentiality, and accountability weren't optional — they were expected. I bring that same standard to every property I oversee.
Designed for seniors. Whether it's your own retirement home or a property for your aging parent, I understand the unique concerns: safety, accessibility, reliable vendors, and the peace of mind that comes from knowing someone trustworthy is nearby.
My Property Management Services
Regular property inspections with detailed photo reports
Vendor coordination: plumbers, electricians, gardeners, pool maintenance
Bill payments and municipal tax management
Storm and emergency preparedness
Move-in preparation before your arrival
Liaison with attorneys, accountants, and local authorities
Monthly status updates so you always know what's happening
For Families Abroad
If your parent lives in Costa Rica and you're overseeing their wellbeing from another country, I also offer the Guardian Angel Program — combining property oversight with personal check-ins, medical advocacy, and regular family reports. You shouldn't have to worry from a distance. I'll be your eyes, ears, and trusted advocate on the ground.
Attorney Oscar Hernández and I work together to support expats through every stage of the Costa Rica journey. He handles the legal side. I handle everything that comes after.
Schedule a consultation with Oscar's legal team at Expat Legal Advisors for your property purchase.
Contact me to discuss property management or senior support services
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