Real estate can be purchased by a foreigner as the government of Costa Rica is very democratic when it comes to property transactions. There is, however, one exception: beachfront properties comply with other regulations. They are called concession property and can not be fully owned but only leased from the state according to certain plan for a stated period of time. Such leases are, so to say, granted by the government, and though they are considered leases, they differ from the normal ones. In all other cases foreigners have equal property rights as citizens. Moreover, for a foreigner it is not even necessary to be a legal resident; in some cases even physical presence is not required.
There are various ways of property owning: it can be individual, joint, trust, also household property, or property as a corporationĺs possession. There are cases when the aforementioned ways are combined. The rights are either full or restricted. Joint property presupposes physical location on the land; or it can be percentage of entire real estate. Condominium ownerships are becoming wide-spread more and more recently. Other ways of property holding are also possible: for instance, by lease, by agreement, or as a squatter; there also can be de facto occupant or occupant with permission from owner, and etc.
In case the property is purchased for the owner use, it is recommended to place it under the "homestead" protection. It is allowed for family homes in the Costa Rican Family Code. This will mean that the property will have protection from all liens apart from mortgages or property taxes, or the like.
If a property is bought as a business venture, it is important to take into consideration some aspects of Costa Rican law. The Code of Commerce do not allow foreigners carry out business on their own in Costa Rica; which means that either a prospective businessman should live in the country for ten years legally or he/she can arrange business through some Costa Rican corporation.
What concerns rural properties, it is not recommended to buy it unless there is no intention to live there and use it accordingly. Absentee-owned properties are exposed to certain risk. Squatter problems are quite frequent in Costa Rica and, taking into consideration the fact that the measures against squatters are not very strict, in order to avoid them it is advised to purchase anything, be it land or real estate, in rural areas only if there is a prospective plan to settle down there.
One more undesired risk can be avoided by making sure that the prospective property has got a free and clear title. A title is something that guarantees that the property will come into possession without any pitfalls.
All the titled property in Costa Rica is registered under the civil law system. The property that is untitled can neither be registered, nor is it easy to define its true ownership. Property possession is secured by law, but only title can ensure the legal ownership of the land. That is why not every possession is legal. The information about title can be found in the 'Registro Nacionale' or public registrarĺs office. It includes title holder name, boundary lines of the property, tax assessments, liens referring to the property, and also other information about the title.
All the real estate transactions are carried out through a Notary Public. This is an attorney, who has approval of the Supreme Court and rather broad powers, such as to draft, authenticate and certify the validity of the documents. As all the procedures are in Spanish, a Notary Public can also serve as an interpreter. There are two main documents that verify the actual property; they are the 'escritura' (transfer deed) and the 'catastro' (plat map).
What concerns the closings costs, they are usually split equally between the seller and the buyer, if not agreed otherwise. These costs include government transfer taxes, registration fees, Notary Public and legal fees; there can be other mortgage-related costs. When all the fees are paid, a transfer deed is registered by a Notary Public in the Registro Nacional. The owner receives all the documents with stamps 60 days afterwards. It is recommended to make sure that the registry was made in order to avoid undesired problems.
Protection of private property is ensured by the article 45 of Costa Rican Constitution. It is illegal to deprive someone of its property apart from for a public justified reason that is proved and legal. If this to be the case, a compensation in accordance should be provided.
Still, those who plan to purchase property in Costa Rica, should keep in mind that the country is dynamic and changing and the prices as well as laws are bound to alter as well.