Costa Rica Real Estate – This is part of our series on buying real estate in Costa Rica. We hope to provide information needed to make an informed decision about purchasing land, condos, houses or commercial property in Costa Rica. If you want more information about this property or buying real estate in general you can request the free e-book, “Secrets of Buying Real Estate in Costa Rica”
Purchasing a property in a foreign country may be scary but it can also be a fun and interesting process if you have a reliable and knowledgeable real estate broker and a reputable lawyer who will look out for your best interest. The more you learn about the country’s climate and weather conditions, its terrain, the culture and people, the easier it is to decide what part of the country you would purchase a parcel of land on.
Once you find the perfect property in Costa Rica that is of reasonable price range and within your budget, follow the steps provided below to acquire the property you have always dreamed of:
- Sign an Option to Purchase/Sale with Seller – the purchase contract is usually prepared by a real estate agent and is modeled after a US purchase agreement. It is designed to set out the terms and conditions of the property purchase and documents the responsibilities of both the buyer and seller during the due diligence period of the purchase process. Once everything has been ironed out, your lawyer should then prepare the actual formal Buy/Sell Agreement which would be reviewed, agreed upon and signed by both the buyer (you), and the seller.
- Deposit funds into escrow – an escrow account is a type of bank account that is held by a third party to protect both the buyer and the seller. Deposits, final balance and other fees involved should be held in the escrow account to ensure that all monies are disbursed to all parties involved in a timely manner and that the terms of the contract are met.
- Title Search done by the Public Notary / Lawyer – this phase is dedicated solely to reviewing and verifying that the property you will purchase is free of any mortgages, defect, encumbrances and liens that may affect the property ownership and hinder you from enjoying and utilizing the property.
- Closing – this is when the execution on transfer deed, endorsement of shares, disbursement of funds and payment of applicable transfer taxes are done in the presence of a Public Notary.
- Register new owner with Public Registry – upon closing, the Public Notary is tasked to present the transfer deed to the Property Section of the Registro Nacional. When the transfer deed is verified and accepted by the Registro Nacional, the Public Notary will receive the certified transfer deed with all the required documentary stamps and seals affixed to the deed. The Public Notary must then register the transfer deed under the new owner’s name with the Registro Nacional. It may take 45 up to 60 days for the registration to be completed.
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Fee Structure
Transfer Tax and Registration Fee – For the transfer of the property to be recorded, the government will charge 1.5 per cent of the registered value of the property. In addition, 1 per cent is charged for other stamps and Public Registry.
Notary Fee – the Public Notary who handled the transaction is entitle to 1.5 per cent of the first million Colones of the actual purchase fee and 1.25 per cent of the remaining balance; this amount is stipulated by the Costa Rican government.
Survey Fee – this is only applicable if you required or demanded a new survey on the property. Pricing varies depending on the location and size of the property to be surveyed.
Mortgage Registration Fee – the mortgage document can be a clause in the transfer deed or it can be another mortgage instrument depending on the agreement between the buyer and the seller; in any case, the person who will receive the financing normally pays the cost of drafting the mortgage which is 0.6 per cent of the mortgage value.
Escrow Fee – the fees vary depending on the escrow provider.
Incorporation – the fee for establishing and registering a corporation is around $500 to more than $1000.
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Property Ownership
Types Is the Property Really for Sale?
What is the Maritime Zone?
Myths About Squatters
Construction, Architects & Engineers
Purchasing Under a Corporation
Financing
And so much more……..
