The Cost of Buying Property in Costa Rica Revealed

  • 13 years ago
  • Uncategorized

Costa Rica is now even more tempting for overseas buyers as it has recently changed the currency law to allow property transaction contracts to be written in US Dollars when the sale was negotiated in Dollars. Up until recently, transactions made in dollars had to have contracts written using the Costa Rican currency of colones

International real estate buyers are often confused re conveyancing costs summarise the fees to watch out for :

Conveyancing  costs in Costa Rica

There are three main closing costs in Costa Rica:

·         Stamp tax

·         Legal fees – based on the sale price of the property

·         Transfer land tax – calculated based on the property’s declared value

The closing costs will generally total around 3-6 per cent of the sale price and are normally paid by the buyer.  However, if a property is owned by a Costa Rican corporation, these taxes and fees can be significantly reduced or sometimes eliminated.

Property taxes payable to local municipalities

When buying property in Costa Rica it is also important to know that every property owner is subject to property taxes according to the location of the land.  Local municipalities are responsible for collecting property taxes in the country.

The value of your land has to be declared every five year or an appraiser can be appointed to determine the value.

The Costa Rican property tax rate is up to a maximum of 0.25 per cent of the value of the property. During a property transaction, the Notary Public or lawyer will obtain a certificate of payment of municipal taxes from the seller.  If property taxes remain unpaid, municipalities are entitled to begin collection procedures to obtain outstanding monies.

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