Buying Property in Costa Rica as a Foreigner: Legal Framework, Risks,and Best Practices
- Lic. Oscar Andrés López Hernández Attorney-at-Law
- Jan 3
- 6 min read
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.
Article 19 of the Costa Rican Constitution establishes the principle of equality between
nationals and foreigners with respect to rights and obligations. In practical terms, this
means that a foreign individual may acquire real property in Costa Rica without holding
citizenship or legal residency. As a general rule, there are no restrictions preventing
foreigners from holding full ownership of private real estate, except in specific areas
expressly regulated by law.
One of the main exceptions applies to the Maritime–Terrestrial Zone, governed by Law
No. 6043. Under this statute, foreign individuals, as well as 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, unless the foreign
individual has held legal residency in Costa Rica for at least five years. In addition,
legislation applicable to border zones restricts the acquisition of land located within the
first two kilometers of land borders for reasons of national security, with practical
limitations that 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.
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, confirming 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.
A complete registry review includes obtaining a literal certification issued by the National
Registry, reflecting 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, as well as confirmation of zoning regulations
and any urban, environmental, or regulatory restrictions. 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.
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.
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.
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.
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.
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, combining 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 focused exclusively on senior expats and their families.
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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