Is It Safe To Buy Property in Costa Rica?
Before making your final decision to buy property in Costa Rica, you need to arm yourself with the relevant information to complete your purchasing seamlessly. The country is famous for its breathtaking nature, rivers, lakes, and the calm Caribbean Sea.
Buying property in Costa Rica is safe, but you must ensure you get what you want. Unfortunately, many scammers take advantage of naive foreigners, and you could easily fall victim. However, you can get local lawyers and realtors to help you buy your property.
Can Canadians Buy Property in Costa Rica?
Costa Rica allows foreigners and non-residents to buy property in the country, including Canadians. Foreigners have similar rights as citizens in property purchasing. However, you cannot own land in the Maritime Zone as a foreigner.
Although acquiring land in Costa Rica is easy for foreigners, it is advisable to consult a local lawyer and accountant for advice. They can help you identify the best places to own property, depending on your reason for the purchase.
While the location to buy your property in Costa Rica is essential, there are other factors to consider. Most foreigners consider investing in this state because of the positive reviews on the internet.
However, looking at all factors before committing your hard-earned money to the project is essential. Some things to note before the big purchase are;
Although Costa Rica is one of the safest countries, there are theft and fraud cases. Cases of scams are more on the internet, and you could get conned when purchasing property in this beautiful country.
Always ensure you visit the property you want to purchase before making payments. You can plan a short trip to Costa Rica or send a trusted person to view the house or piece of land.
If you are buying a home, consider hiring a constructor to check its condition. Some houses look new on the internet pictures but have tons of repair needs, costing you more money.
The Weather is not Always Cool
Most Costa Rica foreign investors are attracted by the tropical temperatures and long seasons of sunshine. However, the climate changes to rainy and colder seasons. Besides, different locations experience different weather patterns throughout the year.
For example, the mountain areas are primarily cold, and humidity is higher near the rivers and lakes. Some areas flood during rainy seasons. Therefore, ask your realtor about the climatic conditions of the place you want to buy property.
Mortgage in Costa Rica is Expensive
Planning your finances is a significant way to prepare for property purchases in Costa Rica. However, things might be tricky if you consider getting a mortgage in the state. The financial institutions have high-interest rates and are reluctant to lend to foreigners.
You can consider other financial options like using cash and making mortgages in Costa Rica your last choice.
Is it Safe to Buy Property in Costa Rica?
The increase in scammers scares many foreigners from buying property in Costa Rica. Although it is easy to fall victim to fraudsters, knowing all the property purchasing steps and requirements can reduce the chances.
Some important things to know before buying land in Costa Rica are;
Buying property in Canada is easy and safe because of the MLS system. This private database gets maintained by real estate professionals, where property buyers can connect with brokers.
The real estate industry in Costa Rica is not tightly regulated, and there are no certified real estate agents. Unfortunately, that has led to increased fake real estate agents and sellers, increasing fraud cases. Property buyers should therefore do their due diligence before purchasing.
You Cannot Buy Titled Property
Although Costa Rica gives foreigners and citizens the same rights when purchasing property in the country, there are exemptions. For example, any land within 50 meters of the high tide is public land and cannot be titled.
The property within 150 meters of the public land is called Maritime Zone. Costa Rica allows non-citizens to own up to 49 percent of the Maritime Zone land, meaning you cannot buy land at the oceanfront.
Some scams try to con foreigners by advertising the Maritime Zone land for sale. Hiring a real estate attorney can help you evade such traps saving you money. You can also do a title search online but must have the property's registration number.
Property Taxes and Title Insurance
Once you buy property in Costa Rica, you will pay a property tax rate of 0.25 percent of the land's value. In addition, owners of luxury homes pay a sliding luxury tax, and Condo owners also pay condo fees.
Most property owners in Costa Rica don't use title insurance because it is expensive. However, you can get one but ensure you consult your real estate agent first.
Costa Rica Property Purchase Process
Once you know the dynamics around property ownership in Costa Rica, you can start your purchasing process. However, choosing a real estate agent can be tricky due to the unregulated market. Therefore, ensure you hire a highly regarded agent in the area.
The steps to buying your property in Costa Rica include:
Searching for the ideal property to buy in Costa Rica might take longer than in Canada. There is more to searching on the internet because you should visit the property to ensure it is legitimate.
Once you decide on a property to purchase, your agent will write an offer and negotiate the prices. The attorney will then write a formal purchase-sale agreement which you sign and pay the deposit.
Deposits for real estate purchases get paid within two weeks in a government-registered escrow account. The deposit is 10 percent of the property value. Once you sign the purchase-sale agreement, you will have 30-60 days to close the deal.
To avoid delays, Canadians must ensure their finances are ready before signing the purchase-sale agreement. You should also arrange transfers via Wire transfer or other methods before the closing period ends.
If you are paying from your Canadian Bank, you will incur an extra cost of foreign exchange fees. However, property buyers paying in Canadian dollars can exchange their currency for Costa Rican Colon (CRC).
Note that banks and other foreign exchange currency agencies charge higher rates which could cost you more. Consider exchanging the currency at Knightsbridge. We offer competent exchange rates.
Once you complete the payment, the real estate agent will close the deal. When hiring an attorney, consider getting a Costa Rican public notary to record your purchases in the registry easily.
You will then pay the closing costs, which depend on the sale price and transfer of ownership process. Other fees to consider when planning your finances are transfer taxes, stamps, and duties which could amount to 3.5 percent of the purchase price.
There are many reasons to buy property in Costa Rica, but many foreigners fall victim to scams. The real estate market is less regulated than in Canada and other countries, hence the increase in fraud. Hiring a well-known real estate attorney can help you be safer and avoid scams.