4 Tips For Buying Property In Costa Rica |
Posted: September 15, 2016 |
Buying property in Costa Rica is not in any way complicated. In fact, Costa Rica has one of the most foreigner-friendly property laws in the world, making it easy for anyone to own property in the country. Before you invest in real estate in Costa Rica, here are a few tips that would help you make a smart choice. 1. Do a Folio Real Search A large percentage of properties in Costa Rica are registered under a computer database known as ‘Folio Real’. This database contains information about the property including the ownership, location, area, boundaries, mortgages and other important information. A Folio Real search would give you all the essential information about a property so that you can make an informed decision as to whether the property is worth investing in or otherwise. If the property is not listed in the Folio Real system, you can still check the public registry where it is most likely to have been listed. 2. Understand Land Ownership Rights If you’re buying land, you have to consider the ownership rights you are being offered. There are two types of rights. The first one is derechos propiedad which means ownership rights, while the second one is derechos de ocupacion which refers to occupational rights. If you are being offered occupational rights, it means that the land has not yet been registered and you would have to go through a lengthy process to have it registered. But for ownership rights, the land has already been registered and you would have about the same rights as a land owner in the United States or in Canada. 3. Understand the Process Buying real estate in Costa Rica involves a five-step process. The first step is to sign an option to purchase with the seller. After this has been completed, the funds meant for purchasing the property would have to be deposited in Escrow while a notary public or lawyer performs a title research to ensure that the property is free of any disputes or defects. If there are no disputes or defects, the deal is closed and the transfer deed is executed. The property now has a new owner and the buyer can go on to register as the new owner at the public registry. 4. Understand the Fee Structure Apart from the cost of the land, there are some other fees that you would have to pay when buying real estate in Costa Rica. You have to pay 1.5% of the purchase price to the government for recording the transfer of property and an extra 10% for stamps at the public registry. 1.25% is charged as notary fees and 0.6% for registering the mortgage deed of the property. Additional fees that are not fixed but dependent on property size and structure include escrow fees, survey fees and incorporation fees. On a final note, it helps to engage the services of a Costa Rica real estate agent to help you conduct property search and understand the process of buying properties in the country so as to avoid fraud and buying bad property.
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