Buying property in Costa Rica can be an attractive option for those seeking a second home, retirement property or real estate investment. However, foreign buyers may encounter important differences compared with the systems they are familiar with in the United States, Canada or other jurisdictions.
Before signing documents or transferring funds, buyers should understand exactly what they are acquiring, how the property is registered and which legal structure may be appropriate for the transaction.
1. Confirm what type of property right you are acquiring
One of the first issues a foreign buyer should determine is whether the transaction involves registered property or rights subject to a special legal regime.
This is particularly important in coastal areas, where some properties may fall within Costa Rica’s Maritime Zone and be subject to a concession regime.
The distinction is significant and should be understood before any commitment is made.
2. Review the National Registry
A registry review can confirm essential information, including:
- registered ownership;
- mortgages or liens;
- annotations;
- restrictions;
- easements; and
- other circumstances that may affect the transaction.
A property being marketed for sale is not necessarily a property that is legally ready to be transferred.
3. Understand how escrow works
International real estate transactions frequently use an escrow arrangement to manage transaction funds.
The funds remain subject to agreed conditions until the requirements for closing have been satisfied.
Before transferring money, buyers should understand who will hold the funds, when they may be released and what documentation supports the arrangement.
4. Buy personally or through a company?
There is no single answer.
Depending on the purpose of the acquisition, the buyer’s profile and broader estate or investment planning, it may be appropriate to consider acquiring the property personally or through a corporate vehicle.
The decision may have corporate, tax, succession and administrative implications and should therefore be assessed before closing.
5. Understand the role of the lawyer and notary
In Costa Rica, a notary public is also a lawyer.
The notary plays an important role in formalizing and authorizing certain acts related to the transfer of real estate.
For a foreign buyer, independent legal advice from the early stages can help identify potential issues before the transaction reaches a point where they become difficult to address.
Legal review should start before you sign
The most expensive mistakes often occur when legal advice begins only after documents have been signed, deposits made or significant commitments undertaken.
Legal review should begin as soon as the buyer identifies a property they are seriously considering.
The objective is not to complicate the transaction, but to ensure that the legal reality of the property matches what the buyer expects to acquire.
Author:
Mauricio Ramírez Rodríguez
Attorney – CENTRAL LAW in Costa Rica
Certified International Property Specialist (CIPS) – National Association of REALTORS® (NAR)
As an attorney holding the Certified International Property Specialist (CIPS) designation from the National Association of REALTORS® (NAR), Mauricio Ramírez brings a perspective focused on the particular issues international buyers may face when acquiring real estate in Costa Rica.
At CENTRAL LAW in Costa Rica, we assist buyers, investors and companies in structuring and reviewing real estate transactions.
Disclaimer: This content is for informational purposes only and does not constitute individualized legal advice.
