Frequently Asked questions with answers
Anyone (foreigner, non-legal resident) can purchase titled property.
- Do you have to use an attorney?
You need an attorney who is also a notary in order to transfer a property or shares.
- Are there escrow or title companies? How is third party money held?
Under govt. regulation and compliance through the govt. entity “S.U.G.E.F.”
third party money can only be handled by an escrow company/entity approved by them. For example, attorney/notary Andres Montejo also has an escrow/trust company and bank account.
- How can you own property; family name, corporation (what type), trust?
You can own in your family name (not recommended considering estate/wills in CR), but you can own in a Costa Rican corporation “S.A.” or Limitada” or under a trust.
- What is the average time for closing a purchase transaction?
Two key factors; availability of buyer’s money and how complicated the transaction is (property issues) will determine due diligence period attorney needs.
- What are closing costs? Approx. 4% of the purchase price unless there is a mortgage involved then the fees will be higher.
- What is required for an initial deposit? How much time to get the deposit sent?
This is negotiable between buyer and seller but the higher the deposit the better chances the buyer has of getting an accepted offer. 10% of purchase price is good.
- How are the funds received in Costa Rica; cash, international transfer, cashier’s check?
The majority of funds are received by bank transfer. If a cashier’s check is not drawn on a Costa Rican bank – it could still take several weeks to clear.
- Contingencies in a contract – what are the usual and what is time frame for due diligence?
Basic contingencies include; clear title, corporation and property taxes paid, proof all utilities, HOA fees (if applicable), contractors/personnel paid off, physical inspections and any other concerns buyer and attorney may feel pertinent like corners marked or a survey required.
- Who will take care of my property if I don’t live in Costa Rica full time?
Your real estate professional will recommend a good property management company to pay your bills, collect rental fees, make repairs……
- What are the fees for a property manager? Depends on size of property and services
required beyond general. For a condo the fees will range from $75-$100 per month A large villa could be anywhere from $100 - $175 per month.
- How much are the rental fees/commission; long term, short term.
Long term 6-10%, Short term 20% and generally rental managers, agents share 50% each.
- What are Property Taxes in Costa Rica? ¼ of 1% of the value/purchase price unless a highly upgraded luxury villa then the tax will go up incrementally.
- What kind of expenses can I expect when owning a condo, home, lot?
Property taxes, Corporation taxes (inactive company only owns property doesn’t operate a profit making business - $185 per year, small annual increases), utilities, property management fee, supplies, maintenance/repairs.
- What service providers will I need for a purchase transaction and then after as an owner?
Professional real estate agent (make sure they are a member of one of the professional realtor associations: C.C. B. R. or C.R.G.A.R.), notary/attorney, construction physical inspector,
property manager (who will have employees for cleaning (maid), gardener, pool maintenance and property maintenance/repairs).
- Can I bring my pet to Costa Rica? Yes – requires documentation to be completed by your vet. and specific shots, no quarantine period.
- Can I get a mortgage on a property I purchase in Costa Rica – what are average interest rates?
As a non-legal resident there are only a few private banks that will give a mortgage. Interest rates are higher than in North America. Average around 8%.
- Should I buy a car in Costa Rica or ship one from North America?
If you export a car to Costa Rica you will have to pay a tax plus shipping. There are enough used cars available to select from in Costa Rica.
- Are there professional Real Estate Associations in Costa Rica?
Yes; C.C.B. R. and the Costa Rica Global Association of Realtors with most members also belonging to the National Association of Realtors so they can use the designation “realtor”.
- Are there capital gains taxes? NO NO NO