Category: Real Estate Law

Buy Land in Costa Rica: Your Legal Guide

Oct 3, 2025 | Real Estate Law

Buy Land in Costa Rica: 2025 Legal Guide & Step-by-Step Closing for Foreign Buyers

Quick take: Foreigners can own property outright in Costa Rica with the same rights as locals—except in the Maritime Terrestrial Zone (ZMT), where use is via municipal concessions. A secure close hinges on registry title checks, municipal land-use (Uso de Suelo), water availability, and (when applicable) environmental screening (SETENA), plus disciplined escrow + notarial recording.

As real estate attorneys at AG Legal, we help foreign buyers complete bankable, clean closings—verifying title, zoning and utilities before funds move. Below you’ll find what foreigners can buy, the step-by-step closing flow, a practical due diligence checklist, and the costs & taxes to budget for.

Table of Contents

Author: AG Legal • Reviewed by: Real Estate & Corporate Team • Published: Nov 22, 2024 • Updated: Oct 3, 2025

What can foreigners buy?

Property Type Can Foreigners Buy? Notes
Residential, Commercial, Agricultural (titled) Yes Same rights as Costa Ricans. Standard due diligence and notarial recording apply.
Beachfront inside ZMT (first 200m) Concession Use via municipal concessions in the 150m “restricted zone”; special eligibility rules apply.
0–50m from high tide No private title This is the public zone; not privately owned.
Corporate ownership Yes Common for asset protection and shared ownership; maintain corporate records and UBO filings.

Property types: titled vs. concession (ZMT)

Titled property is inscribed at the National Registry; you acquire fee simple ownership upon notarial deed and registration. Concession property in the Maritime Terrestrial Zone (first 200m from the shore) grants use and enjoyment under a municipal concession in the 150m restricted zone; eligibility, terms and permitted uses are set by law and municipal plans.

Step-by-step: secure closing

  1. Identify property with a reputable local agent and request preliminary docs (folio real, plano catastrado, HOA/condo bylaws if any).
  2. Hire an attorney–notary to run full title and red-flag checks before you sign or wire.
  3. Registry title search (owner of record, liens/encumbrances, easements, annotations) and cadastral match (location, area, boundaries).
  4. Sign a purchase agreement (price, conditions precedent, who pays which costs, escrow instructions).
  5. Escrow: fund a supervised escrow; funds release only after successful recording at the Registry.
  6. Closing: notarial deed is executed; your ownership is registered at the National Registry.
  7. Post-close: obtain updated registry certification; update utilities/HOA; calendar taxes and compliance.

Due diligence checklist (what we verify)

  • National Registry: chain of title, liens/encumbrances, pending annotations, mortgages, easements, litigation flags; condo/HOA bylaws where applicable.
  • Plano catastrado: boundary/area match and site access; resolve overlaps or discrepancies before LOI.
  • Municipal “Uso de Suelo”: permitted uses, setbacks, height/coverage, special zoning overlays.
  • Water letter (AyA/ASADA): availability of potable water/service feasibility (critical for building permits).
  • Environmental (SETENA): determine whether screening/viability (e.g., D1) is triggered for your project.
  • Site risks: access rights, flood/topography, protected areas, shoreline setbacks (if coastal).
  • Deal mechanics: escrow terms, closing cost allocation, notarial formalities, corporate structuring if buying via company.

Costs & taxes (high level)

Expect transfer taxes and registry stamps on conveyance, notarial fees, potential escrow fees, and ongoing municipal property tax. Professional services (legal, survey, environmental) and VAT may apply to certain services. We model a transparent cost sheet early so you can budget accurately.

Documents to prepare

  • Buyer KYC (passport/IDs; corporate docs & UBO if buying via company).
  • Escrow onboarding (source-of-funds statements as required by AML/KYC).
  • Drafts: bilingual LOI/SPA if needed; Spanish controls for legal validity.
  • Closing: notarial deed, tax/stamp payment forms, and registry filing.

Frequently asked questions

Can foreigners own land outright in Costa Rica?
Yes—foreigners enjoy the same property rights as locals for titled property. Inside the Maritime Terrestrial Zone (first 200m from the shore), use is typically via concessions granted by municipalities.
Do I need everything in Spanish?
Yes. For legal validity, closing documents are prepared in Spanish (we can attach English translations for clarity).
Is escrow necessary?
Strongly recommended. We structure funds-in-escrow → registry confirmation → funds release to protect both parties.
What due diligence is essential?
Registry title & encumbrances, cadastral match, municipal land-use, water availability, and environmental triggers (SETENA). For condos/HOAs: bylaws, budgets, and compliance.
How much are closing costs and taxes?
They vary by price and structure. You’ll face transfer taxes/stamps, notarial and escrow fees, and ongoing municipal property tax; VAT may apply to services. We provide a tailored cost sheet at LOI.

Talk to our real estate lawyers

Want a clean, bankable purchase with zero surprises? We run the full checklist, structure escrow, and record your title at the Registry.

REQUEST A CONSULTATION

15 Common Costa Rica Investing Mistakes Foreign Investors Make in Costa Rica (and How to Avoid Them)

Sep 29, 2025 | Commercial Law, Real Estate Law

15 Common Costa Rica Investing Mistakes — and How to Avoid Them (2025 Legal Playbook)

Costa Rica Investing Mistakes Quick take: Costa Rica is a rule-of-law jurisdiction with predictable registries and permitting—if you structure correctly, check zoning and water availability before buying land, respect coastal concession rules, and keep up with taxes and transparency (RTBF/UBO). Our team sets up entities, vets properties, and builds compliance calendars so your project stays bankable and sale-ready.

As corporate and real estate counsel at AG Legal, we routinely identify Costa Rica investing mistakes and rectify preventable errors that cost foreign investors time and money. This guide outlines the top 15 pitfalls we encounter when forming entities, purchasing property, or launching projects in Costa Rica, along with a step-by-step plan to ensure success the first time.

Table of Contents

Author: AG Legal • Reviewed by: Corporate, Real Estate & Tax Team • Updated: Sept 29, 2025

The 15 most common mistakes (and how we fix them)

  1. Buying first, due-dilencing later. Always verify title chain, liens/encumbrances, cadastral match, and condominium bylaws at the National Registry before committing funds.
  2. Skipping municipal “Uso de Suelo”. A municipal land-use certificate confirms permitted uses, setbacks, height, coverage, and other restrictions. Don’t close without it.
  3. No water, no permit. For buildable land, you usually need a water availability certificate (AyA/ASADA) or equivalent to advance permits.
  4. Ignoring environmental screening. Depending on project type and location, SETENA may require environmental assessment (e.g., D1). Build this timeline into your critical path.
  5. Overlooking coastal concession rules (ZMT). The first 200m from the shore are subject to special concession rules and eligibility limits; structure ownership accordingly.
  6. Using outdated entity models. Choose between an S.R.L. (member-managed) or S.A. (board/share structure) based on control and banking needs; register digitally and keep corporate books tidy for lenders and buyers.
  7. Forgetting UBO/RTBF filings. Companies must report beneficial owners (RTBF) and update changes to avoid fines.
  8. VAT assumptions from home country. Standard VAT (IVA) is generally 13%; model this into pricing and budgeting.
  9. Underestimating closing taxes & stamps. Transfers of real estate carry a 1.5% transfer tax (plus stamps/fees). Budget early.
  10. Ignoring annual property tax. Municipal property tax is generally 0.25% of the registered value (plus potential luxury-home surcharges).
  11. Improper legal representation for banking. Banks apply AML/KYC rules; draft bylaws and powers so signatories clear compliance smoothly.
  12. Hiring before registering as an employer. Register the company with CCSS (social security) and secure mandatory INS Workers’ Compensation coverage.
  13. Mixing personal and corporate use of property. Keep minutes, service agreements, and fair-market rents to avoid tax and governance headaches at exit.
  14. Poor escrow discipline. Use supervised trust/escrow and split closing: sign SPA with conditions precedent → fund escrow → record transfer → release funds on registry confirmation.
  15. No compliance calendar. Missed filings (RTBF, municipal licenses, tax returns) lead to fines and blocked transactions. We built a single, centralized calendar for all deadlines. This is one of the biggest Costa Rica investing mistakes.

Company formation: best-practice checklist

  • Choose the right vehicle: S.R.L. (membership quotas) vs. S.A. (shares & board). Think control, investor entry, and bank preferences. Incorporate digitally, then open corporate bank accounts.
  • Governance that works: Appoint reliable local legal reps; define signing powers, profit distributions, and transfer restrictions in bylaws.
  • Transparency: Prepare to disclose Ultimate Beneficial Owners (RTBF), keep a compliance binder (charter, bylaws, UBO confirmations, ID/KYC, tax IDs).
  • Licenses & notices: Depending on activity, register with the municipality (patent), tax authority, and sector regulators as applicable.

Real-estate due diligence (zoning, water, environmental)

Land is “bankable” when its legal feasibility is clear. For buildable parcels, we verify title & plans at the National Registry, request the Uso de Suelo certificate, obtain a water availability letter (AyA/ASADA), and analyze whether the project must obtain SETENA environmental viability (D1, etc.).

Special case: coastal & concession properties (ZMT)

The first 200 meters from the shore form the Maritime Terrestrial Zone, split into a 50m public zone and a 150m restricted zone. Only municipalities grant concessions in the restricted zone, and eligibility limitations apply (e.g., specific foreign-ownership/residency rules). Structure ownership with care before you commit capital.

Taxes & transparency essentials

  • VAT (IVA): Standard rate is 13% on most goods and services. Model cash-flow and pricing accordingly.
  • Real-estate transfer: 1.5% transfer tax plus stamps/fees on property transfers—budget at LOI stage.
  • Annual property tax: Generally 0.25% of registered value (municipal). High-value homes may face additional “luxury” tax.
  • RTBF (UBO) filing: Required under transparency rules; we coordinate filings and updates.

Labor, social security & workplace insurance

Before hiring, register as an employer with the CCSS (social security) and obtain mandatory INS Workers’ Compensation (Riesgos del Trabajo). Both are standard compliance steps for employees on payroll.

Misconception Reality (Costa Rica)
“If the seller shows me a deed copy, I’m safe.” You need current registry and cadastral checks, not copies. Use the National Registry’s official records.
“I can buy beachfront and build right away.” Coastal (ZMT) land follows concession rules; foreigners face eligibility and structuring limitations.
“Permits will figure themselves out.” No water availability → no building permit; environmental screening may be required (SETENA).

How to invest in Costa Rica the right way (step by step)

  1. Choose the vehicle: S.R.L. vs. S.A.; draft bylaws for banking/AML; appoint legal reps with clear powers.
  2. Open compliance files: Tax ID, municipal license (if applicable), RTBF/UBO preparation and calendar.
  3. Property pre-screen: Registry/cadastral review, Uso de Suelo, water availability letter, environmental trigger check (SETENA).
  4. Deal mechanics with escrow: SPA with conditions precedent → fund escrow → record transfer → release on registry confirmation.
  5. Budget taxes and fees: VAT (13%) on services, transfer tax (1.5%) on property, municipal property tax (~0.25%/year).
  6. People & payroll: CCSS employer registration and INS workers’ comp before first hire.
  7. Operational cadence: Compliance calendar (RTBF, tax, municipal), quarterly legal health checks, board minutes, and vendor contracts.

Frequently asked questions

Can foreigners own property outright in Costa Rica?
Yes, outside the Maritime Terrestrial Zone (ZMT) restrictions. Inside ZMT (first 200m), you deal with concessions and special eligibility rules.
What due diligence is essential before buying?
Title/encumbrances & plan match at the National Registry, municipal Uso de Suelo, water availability letter, and, if applicable, SETENA environmental screening.
What are the headline taxes?
VAT 13% on most services; 1.5% transfer tax on property conveyance; approximately 0.25% annual municipal property tax.
Do we need to report Ultimate Beneficial Owners?
Yes—RTBF, filed via the Central Bank platform, with penalties for non-compliance.
When can we hire staff?
After registering as an employer with CCSS and activating the mandatory INS Workers’ Compensation policy.

Talk to our lawyers

Planning to form an entity, purchase property, or launch a project in Costa Rica? We’ll structure, diligence, and permit your investment end-to-end to avoid Costa Rica investing mistakes.

REQUEST A CONSULTATION

Costa Rica Real Estate

Aug 27, 2023 | Real Estate Law

Costa Rica Real Estate Legal path for homes for sale

Are you dreaming of a new life in a tropical paradise to invest in? Welcome to Costa Rica, a beautiful country with a lot to offer expat investors.

Imagine waking up to the sound of waves crashing on the shores of a beautiful beach or enjoying your morning coffee on your ocean-view balcony. Now, wake up! let’s talk about the legal considerations in reality.

Exploring Costa Rica’s Real Estate Options

This market is a tapestry of possibilities, offering real estate listings of homes for all tastes, from a warm house for your rest to a luxurious ocean view villa for a 5-star vacation, but “not all that glitters is gold”; you should seek advice from a recognized and solid firm as AG Legal, do not rely only on a Real Estate agency that could be composed of foreigners or Costa Ricans without a license, explore the featured properties for owning a dream home in Costa Rica, but take precautions to avoid turning your dream into a nightmare.

Real Estate Investment Prospects:

Tamarindo, Liberia, Jaco, Uvita, Dominical, Matapalo, Samara, Santa Teresa, Flamingo, Arenal, and Nosara.

The Costa Rican real estate market is booming, and prices are steadily increasing. However, there are still several affordable properties available, especially in rural areas. The most popular and expensive areas for expats include San José, the capital, and the beach towns of Guanacaste, Puntarenas, and Alajuela like Tamarindo, Liberia, Jaco, Matapalo, Uvita, Dominical, Manuel Antonio, Samara, Santa Teresa, Flamingo, Arenal, and Nosara.

Doing business in Costa Rica is very possible and open to US, Canadian and European citizens; very tolerable if you have a legal team dedicated to your needs and deadlines to complete your investment project or move to Costa Rica.

Steps to buy safely and correctly.

The first mistake you should not make is to be rushed; try not to let the real estate agents put too much pressure on you to close a sale; as a foreigner, they can see you as a sales commission. Understanding the legal landscape of property in Costa Rica is essential; there are many properties for sale and investment opportunities, with conditions that must be previously reviewed, such as the complexities of the land, construction, institutional permits, complete review of property taxes, title transfers, safe ways to transfer purchase money, neighborhood where it is located, construction plans, swimming pool permits and legality of the person signing the transfer.

Some of the real estate agents in Costa Rica are unaware of everything, and they generate work for us Lawyers later.

Learn about the process from a legal practice perspective:

  1. Request your visa to enter the country; if you are a US or Canadian citizen, you do not need a visa. if you are from another country, have a look at our publication in this regard CLICK HERE
  2. Meet with your lawyer to start collecting the requirements to apply for a residence in the country. there are several types, but if you are determined to buy a property, the residence that best fits your profile is the investor residence, the government of Costa Rica has implemented a new law with benefits to attract foreigners to the country, and the ideal is that while deciding to buy your property, you also collect the official documents required to upload the residency application.
  3. Visit the property with a legal team; the experience of attorneys goes beyond the normal vision of a person who is enthusiastic about a beautiful property; therefore, due diligence is started to verify that this property is optimal and not a fraud, in Costa Rica there are many good people, but there are also those who seek to take advantage of foreigners. Your lawyer will check if the property is subject to a lease. This may be a problem, depending on the legal term the tenant has left.
  4. Make a purchase option contract drawn up by your lawyer; this is a contract of commitment to sell the property in exchange, usually for an advance of money. This contract protects the purchase against impossibilities that arise along the way to the property purchase.
  5. If, in the said period, you need to leave Costa Rica, you can grant a power of attorney to your lawyer or anybody else to take care of the purchase process; likewise, it is recommended that the money destined for the purchase be managed by a “trust” or “escrow” and once everything has been reviewed and you have the approval of your legal representative, authorize your payment to the seller, so your money will be safe. AG Legal, due to its experience, has a “Trust” company registered with the Costa Rican Regulatory Authority for these procedures, a client facility.
  6. Once the property is purchased, your residency application will be completed, and you can begin your new life in Costa Rica with peace of mind.

Costa Rica Tax Implications:

There are taxes involved in purchasing real estate which you need to know about:

Property transfer tax: This is 1.5% of the value of the transaction.

Legal fees: These are usually between 1-2% of the property’s sale value.

Government Fees: They are mandatory for the effective registration as a new owner in the National Registry of Costa Rica, it provides legal security as an owner, and these are paid at the same time as the property transfer tax, normally.

Capital gains tax: This tax is equal to 15% of the gain on the sale of the property. The first time the property is sold, you can choose between paying 2.25% of the property’s value transaction or 15% on the gain. All subsequent sales will pay 15% of the gain. This tax does not apply if you sell your primary residence.

Taxes on rentals: 13% VAT applies to rentals for more than 1.5 monthly basic salary (approx. 680,000 colones). Applies to the total amount paid monthly.

Commercial rentals: 13% VAT applies to the entire rental amount, with no exceptions. Small and medium-sized companies can have a different VAT treatment if they are registered before the MEIC.

Property transfer tax: This is 1.5% of the value of the transaction or the value registered, whatever is the higher.

Legal fees: These are usually between 1-2% of the property’s sale value.

Never miss the tax of a luxury home!

The Costa Rican government has created a tax law on luxury homes; for the year 2023, the owners of properties with a value greater than one hundred and forty-eight million colones (¢148,000,000.00) will be obliged to make the payment of this solidarity tax, which is described below:

RATE STEP  TO APPLY

Up to ¢371,000,000.00 0.25%

On the excess of ¢371,000,000.00 and up to ¢744,000,000.00 0.30%

On the excess of ¢744,000,000.00 and up to ¢1,116,000,000.00 0.35%

On the excess of ¢1,116,000,000.00 and up to ¢1,490,000,000.00 0.40%

On the excess of ¢1,490,000,000.00 and up to ¢1,859,000,000.00 0.45%

On the excess of ¢1,859,000,000.00 and up to ¢2,333,000,000.00 0.50%

On the excess of ¢2,233,000,000.00 0.55%

Almost all dream homes in Costa Rica with pools and luxury structures, especially in the capital and Guanacaste province, must pay this solidarity luxury tax.

Buying Property in Costa Rica – Customs:

The buyer of the property can choose the notary of his choice for the purchase. However, he pays 100% of the notary fees.

Even though the rule is upon agreement by both parties, usually, the buyer pays all expenses and transfers taxes.

The seller must help in the due diligence to obtain the correct information, the identification number of the property, the cadastre plan, proof of being up to date with the payment of public services, being up to date with municipal taxes, building permits in order and last information in case the property is mortgaged before a financial entity in Costa Rica. The seller assumes payment to real estate agents (realtors) in Costa Rica.

The term for the eviction of the property is agreed between the parties. ¡Be careful if there are tenants!

Questions about Costa Rica real estate

How much does it cost to get a real estate license in Costa Rica?

In Costa Rica, there is a Costa Rican Chamber of Real Estate Brokers, which offers official courses to approve your incorporation as an Associate. The Government of Costa Rica passed a law that requires all real estate agents and property managers to be registered with SUGEF. SUGEF authority oversees all banking, investment, and monetary transactions. For example, escrow agents and trust companies are registered with SUGEF. So, the cost is not that high, but it requires time and formalities before the authorities.

How much do real estate agents cost in Costa Rica?

Most listing brokers in Costa Rica charge a commission of 5% to 8% on successful sales transactions; they also charge a residential rental commission equivalent to 1 month + VAT, a commercial/industrial rental commission of 5% of the total value + VAT, vacation rental of 15-25% of the value + VAT.

Can a US citizen buy a property in Costa Rica?

Yes, a US citizen can buy property in Costa Rica. The Costa Rican constitution grants the same property rights to foreigners as it does to Costa Rican citizens; as long as you pay attention to the step-by-step that we gave you previously, any foreigner can buy properties in Costa Rica.

Is it worth buying property in Costa Rica?

Yes, it is worth the risk to invest in Costa Rica if you do it with legal advice; this is the only way to enjoy tax incentives linked to the laws applicable to foreigners, and you will not be subject to fraud or overvalued sale, if you try to buy property as a foreigner without help you are likely to acquire a problem.

For example, residency investors may qualify for credits and benefits such as reduced rental income taxes, capped capital gains taxes, and estate and transfer tax exemptions.

Where is the cheapest place to live in Costa Rica?

The cheapest places to live in Costa Rica are in the provinces of Cartago and Limón, where you will find less touristy towns and where real estate is much cheaper than in other places where foreigners usually choose to retire. Other cheap places to live and buy land are San Ramon, Grecia, Nicoya peninsula, San Isidro, and Atenas.

What is the average price of a house in Costa Rica?

The price can vary depending on the location, house size, and amenities. For example, a three-bedroom house at Hermosa in the Central Pacific region might be $190,000, a house in Cartago in the Central Valley might be $150,000, and your next beach home in Playa Flamingo might be $350,000. Though these prices are just an idea, you need to be advised by a good realtor, who can lead you to what you are looking for. you can find wonderful properties that are for sale in Costa Rica.

What is a residency for investors in Costa Rica?

You may qualify for temporary residency as an investor in Costa Rica if you or your spouse are willing to invest USD 150,000 in a business or real estate properties in Costa Rica, or USD 100,000 in a forestry project.

Under this category, the principal applicant may receive residency for a spouse and children as dependents and is valid for 2 years.

It can be renewed for another 2 years if you keep the project you invested in (business, property, etc).

After 3 years of holding temporary residency, you will become eligible for permanent residency.

Amenities and features that Costa Rica offers

Without a doubt, you can generate a great business in the world of real estate; you can sell and buy in this tropical paradise, from luxurious beachfront villas to cozy condos tucked away in gated communities throughout Costa Rica, offers a diverse range of properties that cater to every taste, you can find a from luxurious beachfront villas to cozy condos tucked away in gated communities, vacation home, apartments for sale, single family homes for sale, luxurious houses or find commercial real estate properties.

Navigating this market is made easier with Costa Rica’s diverse listings, and we at AG Legal can help you find your dream property in the best of Costa Rica.

Your Real Estate and Immigration Allies

With our assistance, you’ll unlock the full potential of Costa Rican real estate and business prospects; visit our offices located in the best part of downtown San José, Barrio Escalante. You’ll love talking about listing in Costa Rica and having lunch in one of the delicious restaurants surrounding our office.

Your Costa Rican dream starts here.

Contact us at:

info@aglegal.com