There is a right way and a wrong way to buy Costa Rica real estate. At Buyers Agents of Costa Rica, we regularly use Stewart Title and other licensed lawyers to facilitate the purchase of your property THE RIGHT WAY.

The first step is to create a Purchase Option that specifies all the details of the agreement. It is imperative that you use a qualified attorney to create your Purchase Option, as it will lay out the terms and conditions for your complete purchase process. Feel free to ask lots of questions, for instance, an inventory of what is included, or who is responsible for taxes and assessments if there is a delay between closing and when you take possession.

Generally, 10% of the purchase amount is held in an escrow account, (not in the owners account!). According to your contract, this is fully refundable if there is a problem with the property. We usually ask for 30 days for due diligence to thoroughly and completely check the public record both on-line and the physical record in the municipality for liens, encumbrances, etc. Upon clearance from the lawyer, buyer and seller, we can proceed with the closing, and you close on your property in Costa Rica.

You will need the following:

1. Your physical passport.
2. A copy of the title of the property and the registered map ---- our agent and lawyer will attain this for you
3. The names and passport numbers for shareholders you wish to include in your corporation.

Closing Costs

When buying Costa Rica real estate, expect to pay 1.5% to 3% of the purchase price for closing fees, with a few notable precautions.

1. It is generally customary for buyer and seller to share closing costs equally. However, always check with your agent before assuming this. Also, a seller may want to report the declared value of the home much lower than the real price, in an effort to save money on taxes. This is not a recommended practice and could constitute tax fraud. Remember, when property tax is only .25% annually is it really worth it? Consider that the government needs this money to improve infrastructure, roads, schools, hospitals etc.

2. It is advisable in most cases to hold your property in a corporation, for a variety of reasons. The set up for the corporation, which must be done by a licensed Costa Rican lawyer, will cost between 500 to 700 dollars. A corporation protects your property from personal liability, gives added confidentiality to your ownership, creates an easier transfer should you decide to sell it, etc. Buyers Agents of Costa Rica and our legal team have new corporations to offer for our clients that can be ready immediately for your purchase.

3. Be careful of owners offering to sell their property with corporation included. While this can save you on transfer taxes, if their existing corporation is not fully investigated, you could be inheriting the bad history of their corporation as well. The most common exception is if it is an "inactive corporation" that has held a since its construction. In this case, you may decide to accept transferring the corporation, if your attorney has fully researched it.

4. If you plan on applying for a Costa Rica mortgage, the process is very similar to that in the United States and Canada. In general, you will have to pay closing costs to the bank for the mortgage. This is not shared by the seller. In most cases, the bank we have their own attorney at the closing, and you can pay them for your portion of the work. The most important part of the process is the creation of the contract, and you will want a qualified, experienced attorney to write this. The actual closing merely completes that work laid out in your contract.

5. Any BACR agent and our team of lawyers will be able to walk you through and explain the purchase process and fees in more detail as needed. We have been to many, many closings in Costa Rica and have seen many variations on the standard contracts and closings. Each member of our staff is a professional buyer's agent in Costa Rica.

Residency

Costa Rica Residency - You have several options

• Retiree (or Pensionado)

  A retiree must provide documentation proving that he or she receives a pension (private or State funded) of at least $600 per month for life.

• Legal Resident (or Rentista)

  Applicants are required to deposit a minimum of $60,000 for each adult and $30,000 for each child to either a Costa Rican bank or to a foreign bank recognized by the Costa Rican Central Bank. This must be done for a period of five years and you must guarantee a monthly cash flow of $1,000 for each adult and $500 for each child.

• Investor (or Inversionista)

  Applicants must invest at least $300,000 into any type of business in Costa Rica. In addition you will need to abide by fiscal requirements. Certain exceptions are made in qualified cases

• Relationship with a Costa Rican (or Vinculo con un costarricense)

  The ‘relationship’ must be deemed first degree, in other words the Costa Rican must be a spouse, child, mother, father or sibling. This application can be commenced in Costa Rica.

• Temporary Residencies

  Professional staff of foreign companies working in Costa Rica can apply for this type of residency.

* On August 12, 2006 a new Immigration Reform Law took effect. The new law states that all applications for legal residency must be submitted at a Costa Rican Consulate in the country of origin of the applicant.

Concession versus Titled Property.

Aside from the natural beauty, there are two great things about Costa Rica realstate: The 1st is that in order to own land in Costa Rica you do not need to be a resident; the 2nd is that most of the land in Costa Rica is titled. That means if you buy a piece of land, it will be titled in the National Registry under your name. But, there is an exception to this rule.

Many of us have a dream of living on the beach or having a beautiful ocean view property as a second home. What you need to keep in mind is that most of Costa Ricas ocean front land is concession. That means that the Costa Rican government owns the land and will lease it to you for a set amount of time (after which you can renew the lease).

This special situation was established by the Maritime Terrestrial Zone Law. This law states that the Maritime Zone consists of the first 200 meters after the high tide mark. The first 50 meters are the Public Zone. In this area no private development can take place. The next 150 meters inland is the concessionary zone. This land can only be leased (not bought freehold) from the Costa Rican government. You can build on this concessionary zone.