How to buy a house in Costa Rica as an expat

Buying property in Costa Rica comes with its own set of considerations, especially when it comes to paperwork and legal steps. Although foreigners are free to buy real estate there, the process can be quite different from what you may be familiar with back home.

In this guide, we break down the costs, taxes, buying steps, and payment options so you know what to expect when purchasing property.

We’ve also included a few practical tips to help you spot important details that are often overlooked when buying a home, so you can better understand everything involved in the transaction.

1. Requirements for foreigners to buy a house in Costa Rica

Below, we outline each of the requirements set by Costa Rican authorities for legally purchasing a home.

You do not need to be a legal resident of Costa Rica

As a foreign buyer, you’re not subject to strict immigration requirements. You don’t need a visa, residency status, or even be physically present in the country to legally purchase land, a house, or an apartment.

If the property you want to buy is worth $150,000 or more, you may qualify for residency as an investor, which can help simplify your immigration process.

Boundaries and restricted areas: The maritime-terrestrial zone

While foreign buyers are generally free to purchase property in Costa Rica, there are certain restricted areas where ownership rules are different. One example is the Maritime Zone, which covers the first 200 meters inland from the high-tide line:

• Restricted zone from 50 to 200 meters: These areas are managed through concessions and have stricter rules. Foreigners can only own more than 50% of a concession if they’ve been legal residents for at least five years.
• Public zone from 0 to 50 meters: This zone is non-negotiable, and construction is not permitted.

Notarial documents and procedures

• Valid passport: This will be your main form of identification when signing a contract, since you don’t need to present a local ID, visa, or meet any minimum stay requirement in the country.
• Power of attorney: If you’re not in Costa Rica, you’ll need to give a trusted person or your lawyer a legal power of attorney, so they can handle the paperwork for you.
• Working with a notary public: To transfer a property, a notary prepares and certifies the documents. They also pay the taxes and register the new owner with Costa Rica’s National Registry.
• Title search: The National Registry confirms that the property owner is legitimate and that all required obligations to the state are up to date.

Option to purchase through companies

Many foreigners choose to buy property through a corporation (S.A.) or a limited liability company (S.R.L.). This can make it easier to manage utilities and protect assets, but it does come with ongoing annual maintenance costs for the company.

2. How much does a house cost in Costa Rica?

The price of a home in Costa Rica depends mainly on location, with the highest cost per square meter found in tourist and central areas. Below, we show approximate price ranges per square meter in different parts of the country.

Prices per square meter

• Central Valley: It includes the capital, San José, along with the cities of Alajuela, Heredia, and Cartago. In these residential areas, prices average around $1,100 to $1,600 per square meter. A modern home in a gated community of about 200 square meters can cost between $250,000 and $320,000.
• Guanacaste: Places like Tamarindo, Nosara, and Papagayo are among the most expensive in Costa Rica because of luxury tourism. In these areas, a luxury ocean-view villa can cost $3,000 to $4,500 per square meter.
• Rural and outlying areas: In areas like San Carlos, north of San José, or southern Puntarenas near the border with Panama, you can find properties starting at around $800 per square meter.

What other factors influence the price of a home in Costa Rica?

Infrastructure is one of the most important factors when buying and valuing a home. Proximity to highways, airports, and access to utilities and high-speed internet also play a key role.

Keep in mind that luxury homes, especially in gated communities or condos, have monthly maintenance fees of about $150 to $500.

Foreign investment vs. local purchasing power based on the minimum wage in Costa Rica

Costa Rica has two very distinct housing markets. One is the local market, where people earning around $900 to $1,000 a month usually look for affordable homes, typically priced between $80,000 and $120,000.

Location also plays a big role in pricing, so these homes are usually found on the outskirts of major or secondary cities. These areas still have workable transport and services, but they’re farther from central or key job locations.

On the other hand, foreign investors tend to have access to higher-end and more expensive properties. This means many expats can live in prime, well-located areas within cities, thanks to their higher purchasing power compared to the local average, with investments often starting around $350,000.

3. Property taxes in Costa Rica

Before signing any documents to complete a home purchase, it’s important to understand the taxes you’ll be responsible for as a buyer and future property owner in Costa Rica. Be prepared to factor in the country’s tax costs when planning your purchase.

Taxes when buying

Transfer costs typically range from 3% to 4% of the property’s value, broken down as follows:

• Transfer tax: 1.5% of the sale price.
• Stamp duty and registration fees: Between 0.5% and 0.8%.
• Notary fees: Generally between 1% and 1.25%, plus 13% VAT on the fees.

Annual taxes

• Property tax: 0.25% per year on the value registered with the municipality.
• Solidarity tax: This only applies to luxury properties with a construction value above roughly $250,000. The tax is calculated using progressive rates ranging from 0.25% to 0.55%.

Capital gains tax

• General rate: 15% on net capital gains.
• Exemption for primary residence: If the property is the seller’s proven primary residence, the sale is fully exempt from capital gains tax.

Double taxation treaties

Costa Rica uses a territorial tax system, meaning it only taxes income earned within its borders. However, it has agreements with countries like Spain, Germany, the United Arab Emirates, and Mexico to help prevent double taxation.

4. Steps for buying a house in Costa Rica

Buying property in Costa Rica involves several legal and financial steps, so it’s important to pay close attention to the details. That’s why we’ve created a clear step-by-step guide to help you through the entire process.

1. Searching for and selecting a house

You can search for a home through online property platforms, or with a certified real estate agent registered with the Costa Rican Chamber of Real Estate Brokers. In many cases, trusted local contacts can also help you find the right property.

2. Preliminary verification of the property with the National Registry

Before making an offer, it’s important that you or your lawyer check the property records at the National Registry. Make sure the property is actually in the seller’s name and verify whether there are any mortgages, liens, or ongoing legal cases.

Also, make sure there is a current cadastral map and that it matches the actual land you intend to buy, since any discrepancies can complicate or delay the sale.

3. Offer and negotiation phase

Submit a written offer to agree on the price and who pays closing costs, which are usually split 50/50. If you want the home furnished, you should also agree on an official list of items.

4. Option agreement and deposit

A purchase agreement is signed, which officially starts the buying process and takes the property off the market. At this stage, you usually pay a deposit of 10% to 20% of the property price.

5. Review of certain legal aspects of the property

This step can take up to 30 days, as you and your lawyer need to check that all utilities and taxes are up to date, so you don’t end up with any unexpected costs after the purchase.

Check that utilities are paid and working properly. Also confirm there are no unpaid taxes, and that the property is zoned for residential use (and for business if you plan to run one).

6. Closing of the transaction and final procedures with the National Registry

Finally, you sign the official transfer deed before a notary. Once the property is fully paid, the notary files it electronically, and within about 15 days you are officially registered as the new owner with Costa Rica’s National Registry.

Avoid the following mistakes

• Not hiring a lawyer to provide legal advice: This can cause delays, money loss, or even a bad purchase, since these professionals check key things like taxes, legal status, and utilities.
• Not applying for the water permit: Without this document, you won’t be able to legally build or renovate anything, as it certifies that the property has access to water service. You can request or check it through AyA (Costa Rican Water and Sewer Institute) or ASADAS, which manage water supply in rural and coastal areas.
• Not taking into account the costs of closing the business: Taxes and fees usually add up to about 3% to 4% of the property’s value, and these are paid by the buyer, so it’s important to include them in your budget.

5. How to pay for a house in Costa Rica

Paying for a property in Costa Rica requires care and transparency because of local rules on proving the origin of funds. Here are the safest ways to pay for your home and avoid fraud.

1. Available payment methods

International SWIFT transfers are the most common way to send money from abroad to Costa Rica. The funds go directly from one bank account to another. To reduce risk, buyers usually use an escrow account managed by a lawyer or trusted third party.

This acts as a third party that holds the funds and only releases or refunds them once the property transfer is confirmed with the National Registry.

If you’re a legal resident in Costa Rica, you can open a bank account and transfer money locally, which makes the process easier. If you’re not a resident, you can still open an account with your passport, but you’ll face limits on transaction amounts, which may slow down the purchase process.

2. Restrictions and money transfers

For any transfer over $10,000, the receiving bank will require documents proving where the funds come from. These can include tax returns, bank statements, sales contracts from other properties, or inheritance documents, if applicable.

If you can’t prove the source of the funds used to buy the property, Law 8204 requires banks to report suspicious transactions and allows them to freeze the money.

3. Can I qualify for a mortgage as a foreigner?

Foreign buyers can qualify for mortgages in Costa Rica, but the terms depend on your immigration status and meeting certain requirements, which we’ll explain below.

• Non-residents: Some private banks offer loans, but they usually cover only 60% to 70% of the appraised value, so you’ll need to pay the remaining amount yourself.
• Residents: If you already have a Costa Rican residency ID, you may qualify for public banks, which can finance up to 80% or even 90%, depending on your buyer profile.

4. Required documentation

Valid passport, credit history from your home country, financial statements, and proof of stable income.

5. Standard payment terms and interest rates

Interest rates on loans are usually between 8.5% and 10.5% per year, with typical repayment terms of 15 to 25 years. You should also expect an opening fee of around 1% to 1.5% of the loan amount.

6. Benefits of paying in full or using financing

Paying in cash is the fastest and most preferred option for sellers, as it speeds up the transaction and also gives you room to negotiate about 5% to 10% off the final price.

Owner financing is also an option, especially in properties located in tourist areas. In these cases, the seller typically requires a 50% down payment, with the remaining balance paid in installments over a period of up to five years.

However, since this arrangement carries higher risk for both parties, it requires strong legal safeguards to ensure payments are made and ownership is transferred once all installments are completed.

6. Tips before buying a house in Costa Rica

We know that buying a home in Costa Rica is a major investment, so we want to share a few tips to help you protect your money and also anticipate issues that are easy to overlook before the purchase.

Thorough legal due diligence

Never sign any document or purchase agreement without a full check of the property in the National Registry. Make sure there are no outstanding taxes and always request an up-to-date water availability certificate.

Stay connected

To stay connected and access information throughout every stage of the buying process, we recommend Holafly’s monthly plans. They keep you online wherever you are, and even if you’re abroad and need to travel to Costa Rica on short notice, you’ll still have coverage in over 160 countries.

You can choose between a 25 GB plan or unlimited data, and you can also share your connection with other devices if you need to use your laptop.

Both plans include the Always On benefit, which gives you 1 GB of free data every month with coverage in over 70 countries, so you stay connected even if you run out of data or temporarily pause your plan.

If you’re planning a quick trip to Costa Rica to check on the buying process in person, you can use Holafly’s Costa Rica eSIM, which lets you choose exactly how many days you need unlimited data.

Expert advice

Hire your own lawyer and a broker affiliated with the CCCBR. Avoid relying on agents who represent the seller, so you can have more confidence in the process and ensure the deal is fair.

Get to know the area

Check whether the area you’re considering has easy access to transport, properly installed basic utilities, nearby healthcare and supermarkets, and overall good safety levels at all times of day.

Analyze the real estate market

Compare prices per square meter in the area. Costa Rica has a wide market with many listings, so make sure the asking price is in line with recent sales in the same area.

Be on the lookout for potential scams

Be cautious if the price seems too good to be true, if the seller pressures you to pay without using an escrow account, or if they refuse to show original documents.

Frequently asked questions about buying a house in Costa Rica

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Paula Henderson

Spanish-English Translator

Hi! I'm a Spanish-English translator working with Holafly, helping bring travel content to life for curious travelers. As a digital nomad with a passion for exploring, I'm always adding new spots to my bucket list. If you love to travel like me, stick around because you're in the right place to find inspiration for your next trip! ✈️🌍

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