What’s the Deal with Concession Properties in Costa Rica? Let’s Break It Down

What’s the Deal with Concession Properties in Costa Rica? Let’s Break It Down

Costa Rica’s breathtaking coastline, with its pristine beaches and serene oceans, attracts people from all around the world. If you are looking to Find the Perfect Home in Costa Rica, one crucial thing to keep in mind is the concept of concession properties. If you’re planning to buy land within 200 meters of the ocean, the process isn’t as straightforward as buying regular real estate. Instead, most of these properties are considered government concessions or leased land.

In Costa Rica, the government owns the first 50 meters from the mean high tide line, and construction on this land is prohibited. However, beyond that, there’s a unique arrangement allowing the local municipality to grant special “concessions” for the next 150 meters. This area, known as the Maritime Zone, covers about 95% of the country’s coastline. But, before you think of owning a piece of this tropical paradise, it’s important to understand the rules that govern these concession properties.

What Is a Concession Property?

A concession property in Costa Rica refers to land located within the Maritime Zone (the first 200 meters from the ocean). The government owns the first 50 meters, but it allows local municipalities to lease the next 150 meters for use. As a buyer, you’re essentially leasing the land rather than owning it outright.

These concessions are typically granted for a period of 20 years, and during this time, you must pay an annual fee to the government. When the concession expires, you can apply for a renewal, but there’s a catch: the municipality may choose to purchase the property at its assessed value, or they could choose to renew the concession agreement. This creates an element of uncertainty because the decision to renew isn’t guaranteed.

The Leasing Structure

Foreigners, unfortunately, cannot directly own a concession property in the Maritime Zone’s restricted area. According to Costa Rican law, they can hold only 49% of the concession rights, meaning they cannot fully control the land. To navigate this, most foreign buyers form a corporation in Costa Rica, with a local member holding 51% of the company shares. This arrangement allows foreigners to effectively manage and control the property while adhering to the country’s regulations.

The corporation setup is one of the more common ways that non-residents secure property in Costa Rica’s Maritime Zone. Though the local member must hold the majority of shares, they typically don’t have any operational control of the property. This structure works for many buyers, providing a clear path to develop or lease beachfront property while remaining compliant with local laws.

New Modern Home in Costa Rica

While concession properties can sound complicated, they’re not without their benefits. Many buyers find the idea of owning a piece of beachside land, even on a leasehold basis, an attractive prospect. These properties often come with spectacular ocean views and easy access to the beach, making them ideal for vacation homes, hotels, or other investment opportunities.

In fact, a new modern home in Costa Rica located on concession land can offer a unique and affordable living option. With a strategic location near the beach, you can have the luxury of coastal living without the high price tag that typically comes with prime beachfront land. While these properties may not provide permanent ownership, they allow for long-term use, making them a viable option for those looking to build or invest in real estate near Costa Rica’s most famous beaches.

Finding the Perfect Home in Costa Rica

For those who are considering moving to Costa Rica or simply looking to invest in property here, it’s important to understand the difference between titled and concession properties. In popular tourist areas like Jaco, you’ll find titled properties available, which offer more straightforward ownership. However, the vast majority of beachfront properties in Costa Rica fall within the concession zone, so it’s essential to weigh the pros and cons before diving into a purchase.

Final Words

For anyone looking for more guidance in navigating Costa Rica’s real estate market, Travis Comstock, a Costa Rica Real Estate Associate at RE/MAX Oceanside, is a trusted professional. His in-depth knowledge of the local market and dedication to helping clients find the perfect home can guide you through the process, whether you are interested in a new modern home in Costa Rica or seeking the best options for beachfront property.