What You Should Always Ask Before Buying Property in Costa Rica

A sunset in a Costa Rica beach.

Can I really buy property safely in Costa Rica? What happens if there is a dispute? Will the legal system protect me? What if I discover something after closing that nobody told me about? These are all valid doubts, but the uncertainty is not something that the investor has to live with, it can be managed and resolved. 

The reality is that Costa Rica has one of the strongest property ownership systems in Latin America.

Foreigners enjoy the same ownership rights as Costa Rican citizens in most situations, the National Registry provides transparency that many jurisdictions lack, and property transactions follow a well-established legal framework. The challenge is not whether the system works. The challenge is understanding how it works.

I constantly sit on both sides of the equation, buyers and sellers, and have seen transactions that move forward without much friction, and others where everything becomes complicated for issues that were not addressed in the beginning. I want to offer my perspective on the most common points of friction so that you can ask the right questions and address uncertainty head on.  

One of the most important questions is surprisingly simple: can I actually use the property the way I intend to? Buyers often assume that because they own a property, they can automatically develop it according to their plans. In reality, zoning regulations, environmental restrictions, building setbacks, condominium rules, concession limitations, water availability, and municipal requirements can all affect what is possible. Before focusing on what the property is today, it is equally important to understand what it can become tomorrow.

There are also high closing costs and the legal closing process, for someone who isn’t familiar with intricacies of it can feel quite lost and surprised. The registry, notary role, how the transfer is formalized, and more importantly, how much it actually costs to close the deal have their complications. Transfer costs are high, and they are often not clearly discussed at the beginning. I’ve seen million-dollar transactions move smoothly, with everything seemingly on track, and then the client feels uncomfortable with the closing costs. The system is different in every country and because of that is different from what someone can be accustomed to and these differences can feel intimidating and confusing. Understanding the process before falling in love with a property benefits everyone  and allows the transaction to move from infatuation to a well-informed long term commitment. 

Another point worth noting is how purchase funds are brought into Costa Rica. One of the safest tools for both buyers and sellers is an escrow account. Although some parties consider waiving escrow to simplify the process or reduce costs, I rarely recommend it. Escrow adds an independent layer of protection by releasing funds only when agreed conditions are met, reducing risk for everyone involved. Escrow accounts also increase transparency. International buyers often transfer large sums into an unfamiliar country, while sellers want assurance that funds are available and verified. A professionally managed escrow account bridges that gap, gives both sides confidence, and helps prevent misunderstandings during a critical stage of the transaction.

A futher question that frequently arises is whether the property should be acquired in the buyer's personal name or through a Costa Rican company. There is no universal answer, as the right structure depends on the buyer's objectives. Some investors prefer direct ownership because it is simple and straightforward, while others choose a corporate structure for estate planning purposes, liability management, privacy considerations, or because they intend to hold multiple assets and business interests in Costa Rica.

The important thing is to evaluate the ownership structure before closing rather than after. Changing the structure later can involve additional costs, taxes, and administrative steps that could have been avoided with proper planning. In many cases, a brief discussion at the beginning of the transaction can save significant time and expense in the future.

On the other hand, there are always “hidden” costs of holding the property, most people focus on the purchase price, but fail to ask (or be informed for that matter) how the monthly or yearly payments will actually look like. Municipal taxes, luxury homes taxes, and maintenance fees sound easy, but they rarely are, it is not just about the current number, it is about how that number is calculated, what it actually includes, and whether it can change over time. In some cases where the fee looks reasonable at first, but does not cover basic items, or where taxes are reassessed end up affecting the cost of the property to levels that make the buyer really uncomfortable. 

Due diligence is another area where there is very little room to be casual. It is not just

about pulling a certification and moving on, it is about truly understanding what you are

buying. Whether there are easements or limitations that are not immediately obvious. In my experience, problems do not usually come from something sophisticated, they come from uncertain terms that were not explained at the beginning or discarded as minor.

Another common issue is plot size and location, sometimes the actual lot doesn’t match what had been offered or advertised and that can lead to disputes with neighbors, complications during construction, or problems when trying to resell. If this is not properly reviewed from the beginning, fixing these kinds of problems later can be difficult and costly. While attorneys can identify legal inconsistencies, only a licensed surveyor can confirm whether the physical boundaries match the registered information. Surprisingly, many buyers are reluctant to incur the additional cost of a survey, only to discover later that it would have been money well spent. 

Water is probably one of the most critical and underestimated factors. You need to know if the availability they offer is functional for the type of construction planning to do. I have seen projects get stuck, because there is not enough capacity, or the infrastructure is not fully developed, and the buyer has to pay the price of these services.  The same applies to public services, there is often an assumption that everything works the same way it does in a fully developed city, and that is not always the case. It depends on the specific location, and that is where expectations need to be adjusted to reality.

Buying property in Costa Rica should be exciting. The objective is not to eliminate every possible risk. No investment works that way. The objective is to understand the risks before they become surprises. The best transactions I have been involved in were not the ones where nothing went wrong. They were the ones where the right questions were asked early enough that potential problems never became obstacles.

Surround yourself with advisors who are willing to discuss not only the opportunities, but also the uncomfortable questions. In my experience, the most successful buyers are not the ones who avoid risk. They are the ones who understand it before signing.

In real estate, certainty rarely comes from luck.

It comes from preparation.

SEBASTIAN JIMENEZ

Attorney at Law