Title Deeds & Property Rights: What Foreign Buyers Need to Know

Title Deeds & Property Rights: What Foreign Buyers Need to Know

Thinking about buying a new home in Costa Rica? The good news is that foreign buyers have the same property rights as locals. You can own fully titled land with fee-simple ownership, which is the strongest form of property ownership. However, not all properties are the same. Some come with restrictions, like concession land, while others require adherence to community rules, such as condominiums. Understanding these details will help protect your investment.

Costa Rica’s economy grew by 4.0% in 2024 and is projected to expand by 3.5% in 2025. This growth is bolstered by strong business confidence, foreign direct investment, and a robust export sector. The positive economic climate supports real estate stability, particularly in regions like the South Pacific, where increased buyer activity has led to properties spending less time on the market.

Property Ownership in Costa Rica

Costa Rica has a clear legal structure for property ownership. The National Registry records all registered properties, making it easy to verify legal ownership. When you buy a property, the transaction must be recorded with the Registry to ensure legal protection. There are two main types of property ownership in Costa Rica:

1. Fee-Simple Ownership

This is the most secure and straightforward type of property ownership. Fee-simple ownership means you have full rights to the land and can sell, lease, or transfer it without restrictions. Most properties available for sale, including homes, farms, and commercial spaces, fall under this category.

2. Concession Property

Properties located within the first 200 meters of the coastline fall under concession land rules. The first 50 meters from the high tide line are considered public land, which means no private ownership is allowed. The next 150 meters are government-regulated concession zones.

Concession land is leased, not owned outright. The government grants usage rights for a set period, typically 20 years, with the possibility of renewal. However, foreign buyers cannot own more than 49% of a concession property unless they have legal residency.

Key Steps to Registering Property in Costa Rica

To secure ownership, buyers must follow these steps:

1. Title Search at the National Registry – A lawyer should verify the title, ensuring there are no liens, pending lawsuits, or disputes over the land.

2. Public Conveyance Deed – The seller must sign a property transfer deed before a Notary Public. The deed is then registered in the National Registry.

3. Tax and Fee Payments – Buyers must pay property transfer taxes, legal fees, and registry fees, typically around 3.5% to 4% of the purchase price.

4. Final Registration – Once recorded in the Registry, ownership is officially transferred, and the buyer becomes the legal owner.

Condominium Ownership Rules

Buying a new modern home in Costa Rica within a gated community or condominium comes with additional regulations. While you still hold fee-simple ownership, you must comply with the condominium’s bylaws. These rules may cover:

● Monthly homeowner association fees

● Rental restrictions

● Pet policies

● Maintenance obligations

● Voting rights in community decisions

Before purchasing, review the condominium regulations to ensure they align with your needs.

Potential Risks and How to Avoid Them

While Costa Rica offers strong property rights, some risks still exist. Common issues include:

● Unregistered Properties – Some land has unclear ownership records. Always verify with the National Registry.

● Squatter Laws – Unused land can be claimed by squatters under specific conditions. Regular inspections help prevent this.

● Incorrect Boundaries – Ensure a certified surveyor verifies property boundaries before purchase.

● Scams and Fraud – Work with reputable real estate agents and lawyers to avoid fraudulent transactions.

Foreign Investment Incentives and Residency Benefits

Costa Rica encourages foreign investment through programs that offer tax incentives and residency options. If you invest at least $150,000 in real estate, you may qualify for Investor Residency, allowing long-term stays and tax benefits.

Protect Your Investment with Expert Guidance

Buying property in Costa Rica can be a smooth process if you take the right steps. Proper title verification, legal registration, and understanding property classifications are key to making a secure investment. If you’re looking for expert assistance in buying or selling property, Travis Comstock is a trusted name in Costa Rica’s real estate market. With deep knowledge of local regulations and a commitment to client satisfaction, Travis ensures a seamless and safe transaction.