Costa Rica Purchase Process and Requirements
We sincerely appreciate your interest in investing in Costa Rica's vibrant real estate market. Costa Rica, with its stunning natural beauty, stable political climate, and strong legal framework, offers a unique and attractive opportunity for foreign investors seeking to own property in this tropical paradise. To assist you in navigating the intricacies of purchasing property in Costa Rica, we have prepared this guide to elucidate the process.
Understanding the Legal Framework:
Costa Rica offers foreigners the same property rights as its citizens to own title land. There are no restrictions on foreign ownership, and property ownership is secured by a robust legal system. The country's constitution ensures property rights are protected, giving foreign buyers peace of mind.
Due Diligence and Legal Requirements:
Before finalizing your purchase, it's crucial to conduct due diligence to ensure a smooth transaction. In Costa Rica, due diligence is typically performed by a qualified Costa Rican attorney during the offer process. Here are the key steps:
Offer Process: The offer process in Costa Rica typically involves the buyer submitting an offer, along with a deposit of around 10% of the purchase price. This deposit is held in escrow and is fully refundable during the due diligence period, which typically lasts 21 business days.
Due Diligence: It is during this due diligence period that the buyer's attorney performs a thorough investigation to ensure the property's suitability for purchase. The due diligence process includes:
Title Search: Verifying the property's title history to ensure it is free and clear of any encumbrances.
Building Permits: Checking for the existence of all necessary building permits and confirming that the property complies with local regulations.
Confirmation of Inventory List: Ensuring that all items included in the sale are accurately listed and accounted for.
Professional Home Inspection: Conducting a comprehensive inspection of the property to identify any structural or maintenance issues.
Legal Water and Electricity Connections: Verifying that the property has legal and functioning water and electricity connections. It's important to ensure that these services are up to date and legally connected to the property.
Any Applicable Checks: The attorney will also conduct any other checks and verifications required for the specific property.
Non-Refundable Deposit During Due Diligence: It's important to note that the 10% deposit submitted during the offer process is fully refundable during the due diligence period. However, once due diligence is completed and the offer is accepted, this deposit becomes non-refundable.
Closing Fees: Estimated closing fees typically range from 4% to 6% of the property's purchase price. These fees cover various costs, including property transfer taxes, legal fees, notary fees, and other administrative charges.
Closing Timeline: In Costa Rica, closings typically occur within 45-60 days from the date an offer is submitted and accepted. This allows sufficient time for all necessary legal processes to be completed, including the transfer of the property title.
We are delighted to assist you at all stages of the process!
Palm Real Estate Team
Office: + 506 2670-0400
US / CANADA: 917-460-2855