Costa Rica Investment Property Laws

Costa Rica investment property and laws of ownership are somewhat similar to property laws in the US and Canada. However there are some nuances and a few key items that you need to be aware of.

Rights of foreign investors
In Costa Rica investment property, foreign investors can own land as fee simple title with no restrictions. Land is registered with the Registro Nacional Costa Rica. Fee simple title means: private ownership of real estate in which the owner has the right to control, use, and transfer the property at will. It is estimated that 80 – 90% of property in the coastal areas of the country are owned by foreigners. The transactions for foreigners are relatively straight forward and local banks will often loan 70% of a home purchase, although generally they do not loan for land only purchases.

Maritime Zone Concession Property
The beaches in Costa Rica are public property and cannot be privately owned; this includes all land from the high tide line back 200 meters which is called the maritime zone. The first 50 meters cannot be owned or built on in any circumstance. However the next 150 meters is called the maritime concession property and in many cases concessions will be granted for the use of land within this zone, from 50 meters to 200 meters of the high tide line. You need to apply for a maritime zone concession to use the property within this area. A concession is granted similar to a lease, which would allow rights to use the property for a designated purpose for a specified period of time. Unlike fee simple property, foreigners do not have the same rights as Costa Ricans on maritime concession property and cannot own more than 50% interest it. However, a Costa Rican corporation can own maritime concession property and a foreigner can own that corporation.

Squatter's Rights
Costa Rica property law has one other unique aspect in that it allows for squatters rights. These land rights were put in place to ensure that wealthy people were not able to own all the land while the local people had no place to live. A very simple solution to any concern about squatters rights is solved by purchasing property within a gated community.

In the past unsavory characters have used the squatters rights loophole to sell land multiple times by moving Indian squatters onto a property the minute a foreign investor got on a plane and headed home. After as little as 3 months being on the property they could make a claim against the property which would tie things up significantly. Then they would offer to buy the property back at a very low price and the foreign purchaser would usually take the offer just to get rid of the hassle. Then they would start the process again with a new victim.

Owning Costa Rica investment property does require a more active role in property management than is required in other countries. You need to make sure you spend time upfront and ongoing to ensure you protect your investment. A gated community is one easy solution to safeguard against this concern. Another solution to protecting your property is to hire a property manager or caretaker to watch your property while you are away. But again you need to find a trustworthy person or company to do this. Also, be sure to discuss your property management arrangements with your local lawyer and keep all receipts of payments made to ensure that the person you hire to manage your property does not end up making a claim to it themselves.

Check out more information on a gated community opportunity as hassle free way to secure your property rights.

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