Setting the Foundation – Building a Home in Costa Rica

Setting the Foundation – Building a Home in Costa Rica

Coldwell Banker Sunset Reef Realty | 3rd April 2024 | Share
Setting the Foundation – Building a Home in Costa Rica

Explore building a house in Costa Rica, from how to buy property in Costa Rica to navigating the legal process. Learn about property acquisition, architectural design, and construction, ensuring your vision becomes a reality.


With its gorgeous climate, stunning landscapes, and hospitable locals, Costa Rica is an enticing destination for those contemplating a tropical relocation or retirement. For many, the prospect of building a home in Costa Rica ranks high on their agenda. The allure of a bespoke residence offering comforts unavailable in preexisting structures or the opportunity to invest in a dream rental property that promises future income is undeniable.

Building a Costa Rican house entails two primary steps: securing a suitable lot and progressing with the planning and construction phases. Below, we delve into the specifics of each.


Securing a Viable Lot for Construction

Choosing the right lot for your home in Costa Rica requires careful consideration because of the many factors involved. Use a trustworthy real estate agent and hire a skilled lawyer to help. It's crucial to align with people who prioritize your interests, so ask for recommendations, talk to past clients, and ensure they are satisfied with the results.


Key Considerations for Properties in Costa Rica:

  • Water Source: Confirm accessibility to a water source, whether from local authorities or via permitting.
  • Electricity: Ensure you are close enough to existing electrical infrastructure to limit the cost and time of extending service.
  • Internet Connectivity: Assess available options for internet access, particularly in rural locales.
  • Road Access: Verify legal access to the property.
  • Property Boundaries: Get detailed property boundary descriptions, preferably checked by a surveyor or engineer.
  • Zoning Regulations: Ensure the property is suitable for residential purposes and address regulatory obstacles.
  • Title Clarity: Focus on properties with clear titles free from taxes or legal issues.


Foreign Ownership Rights in Costa Rica

When purchasing property in Costa Rica, Foreigners enjoy the same property ownership rights as locals in Costa Rica. Whether on a tourist visa or as a resident, buying land in Costa Rica is accessible without needing residency or citizenship. Most properties offer fee-simple titles akin to the systems in the US and Canada.


Finding Your Dream Costa Rica Property:

  1. Unlike the US, Costa Rica lacks a centralized MLS database. Partnering with an experienced real estate agent like Coldwell Banker Sunset Reef Realty is invaluable for understanding the market and locating your ideal home.
  2. Hiring a skilled real estate lawyer is crucial for all property transactions, regardless of citizenship. Hiring a reputable bilingual lawyer, preferably a Costa Rican public notary, is important if you need to speak Spanish better. Only a public notary can finalize the purchase registration in the National Registry, which is a crucial last step.
  3. While like procedures in the US and Canada, Costa Rica's property acquisition process differs. Once you've selected a property and negotiated terms, your attorney will draft a formal purchase-sale agreement. Deposits, typically around 10% of the sale price, solidify the deal, with closing normally occurring within 30-60 days.
  4. Typically covered by the buyer, closing costs include legal fees, transfer taxes, and registration expenses, roughly totaling 3.6% of the sales price. The seller normally covers commission fees, although buyers may incur costs if they opt for a buyer's agent.
  5. Finalizing property registration, either under your name or a corporate entity like Sociedad Anónima (SA) or Sociedad Limitada (SRL), concludes the purchase process. Consult your attorney regarding the ideal ownership structure for streamlining procedures.
  6. Costa Rica imposes minimal property taxes, approximately 0.25% of the property's value annually. Luxury Tax applies to homes exceeding $214,000 in value, capped at an estimated 0.55%.
  7. In Costa Rica, beachfront property is considered public land, and individuals can't own it entirely. Given these regulations, confirming clear title status for properties within the first 50 meters of the high tide line is paramount. Additionally, understanding the restrictions on Maritime Zone land ownership, which are limited to 49% for non-citizens, is crucial.



Significance of Legal Representation and Expert Consultation

Engaging legal counsel early in the process safeguards against potential pitfalls, ensures compliance with regulatory frameworks, and preempts any legal hurdles. It is important to involve a contractor or architect to assess site-specific considerations like drainage, topography, and accessibility.


Navigating Property Acquisition

Legal representation is crucial in the acquisition process. Hiring a lawyer not only facilitates transactional formalities but also protects your interests. After choosing a property, legal checks include researching the title, assessing zoning, and doing due diligence before making a purchase agreement.


The Construction Journey

After buying the land, the exciting process of planning and building a house in Costa Rica begins. The first step is to gather a skilled team of contractors and architects/engineers. Although real estate professionals may suggest people to work with, it's important to check potential collaborators' backgrounds carefully.


The Architectural Design Process

Clients and designers collaborate to turn ideas into plans. They discuss budgets and materials to ensure everyone understands what to expect. Having detailed plans is crucial for permits and approvals. After the plans are approved, contractors provide detailed cost estimates and materials lists, finalizing the construction contract.


Beginning Construction

With contracts finalized and deposits secured, construction begins, bringing the first glimpse of your vision. However, prospective homeowners must anticipate delays due to weather, logistical challenges, and regulatory procedures. Since there are fewer subcontractors, construction progresses step by step to maintain close supervision and quality control.


In Conclusion

Purchasing the right land and building your perfect Costa Rica home comes with challenges, but achieving your dreams is possible with good guidance and patience. By forming a skilled team and navigating procedures carefully, owning a custom home in Costa Rica becomes achievable. Contact us to view stunning Costa Rica land land listings to host your personal paradise.

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