One of the most attractive notions of owning land or buying property in Costa Rica is that Costa Rica property laws for foreigners are the same as they are for nationals. This fact alone makes owning property in Costa Rica very desirable as you will have the same rights as a native born Costa Rican.
Much like in the United States, Canada, or Europe the property laws vary depending on the different types of property that are available for ownership. The common type of property that foreigners choose to invest in is residential property; houses, villas, condos, or apartments. The most efficient way to purchase this type of property is through a corporation. The limited liability corporation, or in Costa Rica the Sociedad Anonima (S.A.), must be incorporated by at least two people before a Costa Rican Notary. After the initial corporation the shares may be transferred to one person, making it completely within the parameters of Costa Rica property laws for one person to be the sole owner of all of the corporation’s shares. While you do not need to form a corporation to purchase property in Costa Rica, there are several reasons why this is the most popular and efficient way in which to do so.
First off, when you purchase property as a corporation, it may be beneficial for any income from rentals or capital gain that may come from that property taxed within a Costa Rican company rather than as personal income. This while of course, depend on your country of origin and the tax laws there.
A second reason that many people chose to incorporate when buying property in Costa Rica is that if you decide to sell your property at anytime you can avoid paying property transfer taxes a second time by simply transferring the shares of the corporation to the new owner.
Depending on what type of property you plan on buying, your intended use for that property, and the tax laws in your home country you may decide that forming a corporation is right for you or you may decide to purchase property as an individual. Both options are completely legal within the Costa Rica property laws.
The best way to determine the right way for you to purchase property in Costa Rica is to come down and stay for a prolonged period of time. It is best if you can live in Costa Rica for six months or even a year, renting a house or apartment and learning more about the laws and structure of the legal system in Costa Rica. By renting a property in Costa Rica long term before deciding to purchase property you will have a better understanding of the property laws and you will have a chance to form a relationship with a lawyer in the country who can help you purchase property when you are ready. Also, by renting long term in Costa Rica before purchasing property, you will have a better understanding of the various regions of the country and which one is best suited to you wants and needs. While many people think they want to move to Costa Rica and live on the beach, they may find that living in the Central Valley, near to San Jose, is easier for them and a better fit. Either way, the property laws in Costa Rica are very straight forward, transparent, and friendly towards foreigners. Please contact us with any questions about finding a condo or home in paradise.