Real Estate Law in Costa Rica: A Legal Guide for Foreign Investors

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Buying property in Costa Rica as a foreigner is legally straightforward, but it comes with details that can create real risk if handled without proper legal guidance — from hidden liens to restrictions on coastal land. At AG Legal, we guide investors, expats, and developers through every stage of the transaction, protecting your investment from start to finish.

Why Invest in Costa Rican Real Estate?

Costa Rica has long been one of Central America’s most sought-after destinations for foreign investors, thanks to its political stability, strong legal protections for private property, and an active market across both urban and coastal areas. Unlike some of its regional neighbors, Costa Rican law does not impose special restrictions on foreign ownership outside the maritime zone, which considerably simplifies the investment process.

Still, “simple” does not mean “risk-free.” Most of the disputes we see in practice don’t stem from the law itself, but from buyers who move forward without properly verifying the legal status of a property or without structuring the deal in a way that protects their money during the process.

Due Diligence Before You Buy

Before signing any agreement, a full legal review of the property is essential. This includes:

• Title search: confirming the legitimate owner and checking for mortgages, liens, judicial annotations, or easements.
• Survey verification: comparing the registered survey (plano catastrado) against the actual boundaries, a common issue in rural and coastal areas.
• Municipal status: confirming the permitted land use matches the buyer’s intended project (residential, commercial, tourism).
• Outstanding debts: unpaid municipal or property taxes that could transfer to the new owner if not settled before closing.

Personal Ownership vs. Corporation (S.A.)

One of the first legal decisions when buying in Costa Rica is whether to hold title personally or through a Costa Rican corporation (Sociedad Anónima, or S.A.) set up specifically for that purpose. Neither option is inherently “better” — it depends on the investor’s goals.

The Buying Process Step by Step

1. Property due diligence: full title, survey, and municipal review.
2. Choose your ownership structure: personal name or Costa Rican corporation.
3. Purchase agreement: terms, timelines, and deposit are formalized, ideally held in escrow or trust.
4. Transfer deed before a Notary Public: the transfer is executed under Costa Rican law.
5. Registration: the new owner is formally recorded with the National Registry.

Escrow and Trust Services

For high-value transactions, remote purchases, or pre-construction projects, we recommend holding funds through an escrow account or trust managed by an independent third party. This mechanism ensures the buyer’s money is released to the seller only once agreed conditions are met — such as registration of the transfer or an agreed construction milestone — significantly reducing the risk of lost capital.

Maritime Zone Property and Concessions

The first 200 meters measured from the ordinary high-tide line along Costa Rica’s coastline make up the Maritime Zone, public land that cannot be directly privately owned. Within this strip, land use is granted through municipal concessions, with specific rules for foreigners — for example, limits on the percentage of ownership foreigners may hold in a corporation applying for a concession within the restricted zone. Any coastal project should be carefully evaluated before committing capital.

Taxes and Ongoing Owner Obligations

• Transfer tax: paid once at purchase, alongside notary fees and registration costs. Closing costs typically total 3%–5% of the purchase price, including a 1.5% transfer tax and roughly 1.5% in legal fees.
• Municipal property tax: an annual obligation based on the property’s registered value.
• Luxury home tax: applies to residential properties valued above the legal threshold.
• Corporate tax: if the property is held through an S.A., the corporation must meet its own annual filing obligations.

Common Legal Risks and How to Avoid Them

Frequently Asked Questions

What legal steps are involved in buying property in Costa Rica?

Buying property in Costa Rica requires completing due diligence including a title search at the National Registry, verifying ownership and encumbrances, confirming zoning and land use, and conducting a property survey. The purchase is finalized by signing a transfer deed before a licensed Notary Public, who registers the transaction with the National Registry to protect your ownership rights.

Can foreigners fully own property in Costa Rica?

Yes, foreign buyers enjoy equal property ownership rights in Costa Rica without needing a local partner. They can purchase land, homes, or commercial properties outright with the same legal protections as Costa Rican nationals.

How do escrow services work in Costa Rican real estate transactions?

Escrow services safeguard funds during a property purchase by holding buyer’s payments until all contractual conditions are met. This protects both parties by ensuring money is released only after proper documentation, inspections, and deed registration, adding security and trust to the transaction.

What are the costs associated with buying real estate in Costa Rica?

Closing costs typically range between 3% and 5% of the property’s purchase price. These include transfer taxes (1.5%), legal fees (~1.5%), notary fees, and registration costs. Buyers should budget for these alongside the property price to avoid surprises.

How do I verify property titles and avoid liens or disputes?

Verifying property titles involves reviewing the National Registry’s records for ownership, mortgages, liens, and restrictions. It’s highly recommended to hire a bilingual real estate attorney to conduct comprehensive due diligence and confirm boundaries with a licensed surveyor, minimizing risks related to ownership disputes or encumbrances.

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This content is for informational purposes only and does not constitute individualized legal advice. Every real estate transaction should be evaluated on its own facts together with an AG Legal attorney.