6 COSTA RICA REAL ESTATE MAGAZINE Rights, Legal Limits, and Common Myths U.S. Investors Should Understand Costa Rica is widely known as one of the most foreign-friendly real estate markets in Latin America. From a legal standpoint, that reputation is largely deserved. Foreigners enjoy broad property ownership rights, often comparable to those of Costa Rican citizens. However, that general rule is frequently misunderstood. For U.S. investors—particularly retirees, second-home buyers, and high-net-worth individuals—the real question is not whether foreigners can buy property, but where, how, and under what legal constraints. This article explains the true scope of foreign ownership rights, the statutory limitations, and the most common misconceptions that lead to costly mistakes. General Rule: Equal Property Rights for Foreigners Costa Rican law does not prohibit foreigners from owning real estate. Under Article 45 of the Political Constitution of Costa Rica, private property is protected, and no distinction is made between nationals and foreigners. As a result, a U.S. citizen may legally acquire: • ` Residential homes • Condominiums • Apartments • Commercial properties • Development land • Agricultural land Casimiro Vargas Attorney at Law and Notary Public Can Foreigners Own Real Estate in Costa Rica? Ownership may be recorded directly in the foreigner’s name in the National Registry (Registro Nacional). To own a Real Estate in Costa Rica there is no legal requirements as: • Be a resident of Costa Rica • Spend a minimum amount of time in the country • Partner with a Costa Rican citizen From a pure ownership perspective, Costa Rica is one of the most open jurisdictions in the region. That said, real estate investment can support an application for legal residency, particularly under Costa Rica’s Investor Residency category (Residencia por Inversión), if statutory investment thresholds are met under immigration law. Beyond the Price Tag: Taxes and Closing Costs While property prices in Costa Rica can be attractive, investors must budget for acquisition and holding costs. Unlike the U.S., where closing costs are often split, in Costa Rica, it is customary for the buyer and seller to share them, though this is negotiable. • Closing Costs: Expect to pay approximately 3.5% to 4% of the property value. This covers the Transfer Tax (1.5%), Legal/Notary Fees (approx. 1-1.25%), and registration stamps. • Property Taxes: A major benefit for investors is the low holding cost. The standard property tax is only 0.25% of the registered value annually. • Luxury Tax: High-net-worth investors should be aware of the “Solidarity Tax” (“Impuesto Solidario”), which applies to high-value residential construction. The Real Legal Limits: Where Restrictions Apply Despite the broad rule, important statutory exceptions exist, especially in coastal and environmentally sensitive areas. Maritime Zone (Zona Marítimo-Terrestre – ZMT) The most significant restriction for foreign investors is found in the Maritime Zone, regulated by Law No. 6043 (Ley sobre la Zona Marítimo-Terrestre). • The ZMT extends 200 meters inland from the high-tide line. • It is divided into: > Public Zone (50 meters): Absolute public use. No ownership or concession allowed. > Restricted Zone (150 meters): Subject to concession, not private ownership. San Isidro de El General, Costa Rica +506 2770 9041 USA: +1(860) 929 1431 +(506) 8888-3221 +(506) 86516783 casimiro@cvfirm.com www.cvfirm.com
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