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FAQs

1- Costa Rica Multiple Listing Service (MLS)
2- Using a Real Estate agent in Costa Rica
3- How Real Estate Agents Get Paid
4- Can foreigners or non-residents own property in Costa Rica?
5- Do I need a Lawyer / Notary?
6- I found the property I like… What is the next step?
7- What are the steps to buying a property in Costa Rica?
8- Step by step when buying a property in Costa Rica.
9- How to get financing in Costa Rica?
10- How much are legal closing costs?
11- How property taxes work in Costa Rica?
12- How about home inspections?
13- More information about title insurance?
14- Can I buy homeowners' insurance?
15- About the INS
16- How is the title transferred?
17- Should I list the property in my name, or under a corporation?
18- Can a foreign person or company own and operate a business corporation in Costa Rican?
19- What are the most important differences between these two types of business corporations?
20- Top of Form
21- What are the minimum capital requirements for forming a Costa Rican business corporation?
22- What regulations govern beachfront property?
23- Lets talk about zoning laws in Costa Rica
24- What is concession property?
25- Are electricity and water available in rural areas of Costa Rica?
26- Recommending Buying or building?
27- Can I have a home built in Costa Rica to North American standards?
28- How can I find a good builder?
29- Are squatters a problem?
30- How it works to hire a Property Manager?
31- Will I be able to hire household help?
32- When is it best time to visit Costa Rica?
33- Selling Costa Rican real estate?

1- Costa Rica Multiple Listing Service (MLS)

There is no central MLS in Costa Rica. Several websites advertise an MLS search, which is usually a collaboration between several real estate agents to list their properties in one location. Some local associations have supported and/or are recommending certain systems, but participation is not required and there is no one system supported by all the associations. There is one major one which got stablished approx 3 years ago in Costa Rica and most Realtors use it now, as is also autamaticly conected to Realtor.com, the website is http://www.costaricarealestatemls.com/

Overviews about the Costa Rica MLS:

The Costa Rica MLS (CRMLS) is the only non-profit, national MLS for the country, which is also part of the industry-standard, Proxio global property database. It was created for and by the most professionally qualified realtor members of associations in Costa Rica and is offered freely to global realtors, investors, and the general public who are interested in our beautiful country…

For international investors, The Costa Rica MLS offers the confidence that any listed property is identified in the National Public Registry and has an available profile of its legal status. Each listing on the CRMLS is also identified with the one realtor who was authorized to post it by the property owner, offering confidence in the accuracy of descriptions, terms and pricing.

The Costa Rica MLS is a service offered by the Costa Rica Global Association of Realtors (CRGAR). For a complete explanation of CRGAR's mission, programs, and members, go to crgar.com.

2- Using a Real Estate agent in Costa Rica.

A real estate agent can help you navigate the Costa Rican real estate market and the language barrier.

The process of buying a house is complex, and most people find it's easiest to get through with an agent by their side. It is absolutely helpful to have someone familiar with the process to deal with it. Other parts of the transaction will be happening quickly too — hiring inspectors, negotiating over who pays for needed repairs, keeping up good relations with the sellers (through their agent) and more. All of this is second nature to an experienced agent. What's more, experienced real estate agents usually have contacts with good inspectors, mortgage loan brokers, lawyers, engineers, topographers, and others who can make your buying process easier. And they know what's considered appropriate behavior and practice in your geographical area.

Reputable Realtor

The first thing that you should consider is who you should work with to help assist you in finding and purchasing your property in Costa Rica. Like any other investment you make involving a significant sum of your money the first thing you would do is look to get the advice and assistance from an experienced professional in the chosen field with a proven track record. You look for an expert that you can trust to give you accurate information, as well as all the information, so that you can make informed decisions. You should not approach purchasing property in Costa Rica in any other way. Get the results you want, work with proven professionals.

3- How Real Estate Agents Get Paid

Such an agent or broker will usually receive a commission from the seller of between 5% and 10% of the purchase price if the sale is closed.

Most agents or brokers will have their own list of properties for sale. Such a list should not be confused with what you might know as listed properties. Some real estate agents or brokers have executed legal documents establishing their right to act as agents for the seller; most have not.

Real estate agents normally work on commission, not salary. They receive their slice only after your home search is over, the contract negotiated, and the transaction complete. (In many cases, they end up doing a lot of work for nothing, perhaps because the buyers lost interest or can't close the deal.) The seller typically pays the commission to both the seller's agent and your agent — usually around 6% of the sales price, to be split between the two agents.

Variations on the typical commission arrangement also exist. For example, some buyers prefer to hire an agent and pay the commission themselves, figuring it will make the agent more loyal to the buyer's interests, and provide grounds for a drop in the sales price.

Remember: the agent or broker is paid a commission by the seller for the sale of the property, and therefore has a vested interest in the sale.

4- Can foreigners or non-residents own property in Costa Rica?

The great thing about Costa Rica is that regardless of your nationality or immigration status, you have most of the same property rights as native Costa Ricans. This is not true in all Latin American countries. Costa Rica's solid and egalitarian property rights are a big incentive to investing here.

5- Do I need a Lawyer / Notary?

If you purchase Costa Rica real estate, you will need Costa Rica attorneys or lawyers. Costa Rica real estate law is so different from real estate law in other countries.

The first and most important thing you must do is retain a good attorney. Closing, as we are used to the way things were done "at home", is not much different here, but we advise strongly that an attorney is a must.

When you reach the point of closing, the seller and buyer must select a notary, notario. The notary will be responsible for drafting and registering the purchase documents. Legally, the notary is working for both parties and should look after both parties' interests. In fact, this obligation is often not complied with, since the notary tends to be a trusted person of the party selecting the notary.

Notaries under Costa Rica's civil law system have much greater responsibilities than under common law. In Costa Rica, notaries must be attorneys before they are accepted by the Supreme Court to act as notaries. It is this Court that regulates notaries and their conduct.

A lawyer is an important aspect to purchasing real estate in Costa Rica. Find a lawyer who speaks your language and answers questions promptly; this will ensure the smoothest transaction possible. Your attorney will help you through several steps of your purchase, including a title search, contingency releases, distribution of funds, title transfer, closing statements, and more. Lawyer and notary fees are assessed as percentages of the sale price, not to the declared property value. Attorney fees amount to 1.5% of the first $2,000 and 1.25% of the remaining sale price.

Notaries are responsible for studying the property in the Registry and seeing that it does not have liens or encumbrances, or any other limitation registered or in process of being registered, of which the buyer does not have knowledge. The notary, in effect, makes the equivalent of a limited title search. Also, the notary will make sure the property you have selected is duly registered in the alleged owner's name and that such owner has the right to transfer title. If there are liens, encumbrances or any other restrictions registered, he must let you know so they are accepted in the closing contract.

We work and recommend the services for the law firm P & D Lawyers ( Property & Development ), located in Tamarindo beach area since 2002. Their website is http://www.pdlawyers.net/ Please feel free to contact Lic. Gabriel Chaves office phone nmber 2653-2012.

6- I found the property I like… What is the next step?

You may already have a property in mind or may want to look for one. If the latter is the case you will make your first important decision: finding a real estate agent or broker, agente or corredor de bienes raíces.

7- What are the steps to buying a property in Costa Rica?

Begin the process by making an offer of purchase. Have your lawyer draft up the purchase agreement, and make sure you're clear on all the details. When the seller accepts your offer, you will make a deposit on the property which goes to and Escrow account. Now it's time to order a survey of the property, run a title check and, if desired, purchase title insurance and hire a home inspector. When you're ready to proceed, your lawyer will help complete the sale and make sure all legal requirements are fulfilled.

Choosing your attorney is your second important decision. Your attorney will be the person who will protect your interest during the negotiations and the closing.

The attorney will check the property's registration at the Registro, and inform you of its registered legal status, its owner, and which, if any, liens and encumbrances are registered or in the process of being registered against it. He will also advise you as to the conditions and clauses of the contract for sale.

8- Step by step when buying a property in Costa Rica.

First: After you have found the right property with your Real Estate agent, have them submit an Offer to Purchase (also known as a Letter of Intent) to the Seller or the Seller's listing agent in order to agree upon the sales price and basic terms of the deal.

Second: Once the Offer is accepted, you take it to your Costa Rica attorney and they draft the formal Sale and Purchase Agreement. This document is a legally binding document, and it clearly states all conditions necessary for the transfer of the deed.

Third: The period of Due Diligence, which is the complete legal research of the property to insure there are no liens, contingencies, legal issues, and that it has absolute fee simple title. Surveys, soil tests, home inspections, and other studies requiring professional services are included in this period. If the property is being sold with an existing company, then the research of the company for any legal contingencies will also be completed during Due Diligence.

Fourth: The Closing (conveyance of the deed) occurs before a Costa Rican Notary Public, who will register the property under the new company or owner. Alternatively, if the property is being purchased with an existing company, then the shares of the company are transferred at this time by a Shares Transfer Agreement. In this case the Notary Public will make the corresponding changes to the company's ownership in the National Registry.

Fifth: Declaring the property before the corresponding Municipality for property tax purposes by filling out a simple form and presenting it along with the some other documents either yourself or through your attorney.

9- How to get financing in Costa Rica?

Bank financing is very complicated due to local laws and bureaucracy, and interest rates are high – usually around 10-12%. However, many sellers offer partial financing, usually with a down payment of 40-50%.

One viable option, and one of the better ones, is to arrange for the seller to carry the mortgage on the property. Many sellers will, some will not. Your attorney or realtor can offer advise during the negotiating process. One thing, do not look for 25 or 30 year loan terms. The normal is 3 to 5 years. The interest rates can be more favorable between 5% – 7% in most of the cases.

10- How much are legal closing costs?

Typically, the buyer and seller share the closing costs 50/50, which are calculated as a percentage of the property's value; registration fees, notary and attorney fees, documentary stamps and transfer taxes will amount to no more than 6% of the property's declared value. Though it used to be common practice to artificially lower the property's declared value, this is a dangerous game that could cause future repercussions.

Every property acquisition in Costa Rica has to pay the following National Registry Fees:

Transfer Tax: This is a national tax of 1.5% of the purchase price that is paid (by your lawyer) to the National Registry. Prior to 2013, the cost for transferring the shares (instead of a direct property transfer) of the existing corporation to the new owner was significantly less. Now in 2013, that option does not offer any significant financial savings. These costs are often split by the Buyer and the Seller on equal parts 50/50.

Legal Fees: for the purchase of property in Costa Rica are 1% to 2% depending on the sales price, complexity of the transaction, and the allotted time spent by the attorney on the deal. Additional legal costs may include the formation of a Costa Rica corporation of around $900 USD; drafting of any supplementary contracts or Seller Financing Agreements and registering of such contracts; and translation of contracts into your native language. However, the Buyer is usually solely responsible for starting a new company, any contracts for Seller Financing (if needed) and registration of those contracts, and translations if the Seller is Spanish speaking.

Closing costs for a land transfer are:

Item Amount
Notary Public Fee 1.25% of purchase price.
Land Transfer Tax 1.5% of the highest of:a) purchase price or,b) previous recorded value of land.
Registry Stamps 1.3% of the highest of:a) purchase price or,b) previous recorded value of land.

11- How property taxes work in Costa Rica?

Taxation in Costa Rica is much more simplified than that of many other countries. There are different limits of taxation depending on your income: the more you earn, the more you pay; if you earn less than the minimum amount established by Costa Rican law, you pay no taxes. The following basic information discusses some of the tax system, but you should always check current figures with your accountant.

Property Tax: This annual tax is 0.25% (one quarter of one percent) of the registered property value and are paid to the local Municipality for where the property is located. These taxes could be paid every 3 months or can be paid in full for the year in advance. For example a $100,000 USD property pays $250 USD per year in Property Tax. Low property tax is one of the many reasons to invest in Costa Rica real estate.

Corporation Tax: This new tax was passed in 2012, and it is a fixed fee of $180 USD for inactive corporations and $360 USD for active corporations. Most properties are held in an inactive corporation, because it will not be reporting income. If you have a rental property, you can open an additional, active corporation to report income and expenses. These taxes are paid to the "Ministerio de Hacienda".

Luxury Tax: A tax levied against luxury homes valued at $250,000 USD and is also paid to the "Ministerio de Hacienda". This tax is around $2,500 and up depending on the registered value of the home. The tax is based on a sliding scale and depends on the property value. A home valued at $212,000 is taxed at .25% percent of the property value, and a $1.5 million dollar home is taxed at .40%.

12- How about home inspections?

In Costa Rica the use of a Home Inspector is usually assigned to an Architect or Engineer. These professionals are licensed through C.F.I.A. which is an acronym for the College of Engineers & Architects. However, over the last few years we have seen an increase in good home inspection services from the U.S.A and Canada. This is a good thing since the procedures the Architects and Engineers use are usually limited to an inspection as per the building code and they can also give you a qualified opinion about the structural integrity of the premises which does not really address all other items a home buyer would need to know in order to make a prudent buying decision.

When considering the purchase of a new house, apartment or condominium in Costa Rica you want to make sure that all building materials and installation procedures have been 100% completed, and all mechanical and electrical installations are functioning correctly, and in accordance with local building codes, prior to closing.

13- More information about title insurance?

Yes, several companies provide title insurance in Costa Rica; most are backed by U.S. title insurance companies. The cost is calculated at around 3% of the property purchase price.

Costa Rica has little restrictions on the ownership of property but does, however, have a complex legal system that governs the ownership of property and the transfer of titles.

Don't be scared off by the complexity of it though, because many excellent attorneys specialize in streamlining the process for comparatively modest fees.

14- Can I buy homeowners' insurance?

Homeowners' insurance is available for a very reasonable rate. You may choose various options and add-ons, such as earthquake or theft insurance.

Next is the INS (Instituto Nacional de Seguros) is the government insurance company, which was a monopoly until recently. They sell all kinds of insurance through agents, including medical insurance, auto insurance, home insurance, and so forth.

Home insurance for natural disasters is also very reasonable, and covers most everything you can imagine. While construction methods are excellent, floods and quakes do occur, so insurance coverage may be wise. And there is no need to worry about stability, as the Insurance institute and the country are reinsured by the largest companies worldwide.

15- About the INS:

INS sells insurance directly at its many offices throughout the country, or you can purchase a policy directly from a registered agent. It will cost the same, but a responsible agent (not all are – be careful) is preferable, as you will get advice and help with the red tape if, along the line, you have to file a claim.

There are certain things you should know:

a) The value of the items being insured is determined by the applicant, using Actual Cash Value (depreciated value). INS does not have appraisers.
b) Insured values and premiums are in Colones, not in dollars. Because of Costa Rica's annual 16-18% currency devaluation against the US dollar, it is best to periodically revise your policy.
c) All policies have deductibles which in most cases are fixed by INS. There are few policy options. Deductibles average 20% per claim on most policies.
d) Insurance binders do not exist; formal applications have to be completed and signed, and in most cases the item must be inspected and the premium paid before insurance becomes effective.
e) INS (probably because it is a monopoly) is one of the largest and most solid insurance companies in Central America. It reinsures a large percentage of the risk internationally.

Types of policies available:

HOMEOWNER'S FIRE AND NATURAL DISASTER POLICY – Can cover the house, the house plus contents, or the contents alone, against the following:
Coverage "A" (Basic Coverage) – Fire and Lightening
Coverage "B" – Winds, Hurricanes, Cyclones, Falling Objects, Explosions, Smoke, etc.
Coverage "C" – Floods, Landslides
Coverage "D" – Quakes, Tremors, Volcanoes
The rate is 0.2436% per year for ABCD based on the estimated cost of rebuilding. The value of the land does not enter the picture. In other words, insurance for a house worth $100,000 would cost $243.60 per year.

HOME THEFT INSURANCE – This covers only instances of forcible entry and covers the list of ALL items in the house EXCEPT cash, jewelry and securities which cannot be insured. INS will accept the risk for works of art, collectors' items, antiques, etc. but this is not automatic. Theft premiums average 1% per year of the total specified on the list of insured items. The exact premium you pay depends on the features and location of the home. It may take a month or more to get theft insurance coverage operable.

HOME OWNER'S LIABILITY – This covers the amount awarded by Costa Rican courts for incidents taking place within the confines of the house. As Costa Rica is not a litigious country, this insurance is not important for the average householder.

16- How is the title transferred?

The Costa Rican government entails the prompt registration of all land newly possessed or transferred ownership. Documents that prove support in the ownership details of a real estate property are checked in the Public Registry office's property department as required by the Civil Code. Properties are numerically cataloged and land titles are kept in the Folio Real database. This contains a complete record of land titles, which can be searched according to the title index or number. The database can be accessed via the internet, making it very convenient for foreign investors.

The informal registration report contains basic information on a land property, such as the name of the owner, the mortgage arrangements, appraisal of taxes, and other legal concerns affecting the land title. Also found in the report are topological details such as the total land area and locations of property boundaries. This information is useful in keeping track of the country's numerous properties put on the market every year.

When you have signed the transfer document, you will need to pay the transfer taxes. Usually the notary will ask you for a specific amount of money, which should include the notary's fees and those taxes. It is the notary who will be in charge of paying all the necessary taxes and tax stamps, so always ask for a detailed receipt of what you are paying for. Another thing to keep in mind is that transferring a property is relatively simple. No unreasonable delays should take place.

Once a transfer deed is accepted for registration, the Public Registry will return the original document with all the documentary stamps affixed to it and properly sealed. Assuming no defects in the transfer deed, it should be registered by the Public Registry with 45 to 60 days after presentation. It is therefore important to follow up with the notary to ensure registration.

17- Should I list the property in my name, or under a corporation?

Property can be owned individually, jointly, in trust, as household property, or in the name of corporations, or a combination of these. It can be owned and held either by one or more individuals or in the name of one or more companies.

For reasons pertaining to limitation of liabilities and estate planning, the most common and advantageous way to own property in Costa Rica is through a corporation. Costa Rican corporations can have all issued stock owned by one individual. Share sale income, if not part of normal business, is not taxable. There is no capital gains tax in Costa Rica. Share sales pay no transfer tax.

18- Can a foreign person or company own and operate a business corporation in Costa Rican?

Although the CR Code of Commerce restricts the carrying out of business by foreign persons to those with at least ten years of legal residency, there is no restriction to a foreign person or company either forming or acquiring a business corporation. A locally formed business corporation is by definition Costa Rican and enjoys all legal rights on par with Costa Rican nationals operating a business with very few exceptions that are usually accommodated through association with CR citizens. Despite the fact that Free Trade Agreements, Globalization and the Internet, are rendering the above restrictions for non long term residents irrelevant, using a CR corporation is the universal practice for nationals and foreigners in CR.

19- What are the most important differences between these two types of business corporations?

An important difference between the two is that the "S.A." must be represented by a board of directors with a minimum of three members and have a statutory examiner, whereas the "Ltda." need only be represented by one or more Managing Directors at the choosing of the shareholders; another difference is that stock transfers in a "Ltda." have a legal "first right of refusal" in favor of current shareholders, whereas in an "S.A." a "first right of refusal" on stock transfers must be specifically included in the corporate bylaws if desired. It is important to note that the "S.A." allows for different types of privileged or preferred stock whereas the "Ltda." does not.

A consideration for some U.S. companies is that the "Ltda." has reportedly been understood by the IRS to be a "partnership" and thus have a different tax situation when considering a consolidated or global U.S. taxable income. However under CR law this distinction does not exist, so it is questionable that the IRS should do so.

20- Top of Form

How many persons are required to form a Costa Rica business corporation?

The CR Code of Commerce stipulates that a corporation must be formed by at least two initial shareholders. It also allows, however, the acquisition of the totality of the capital stock by a single shareholder immediately after formation, thus essentially permitting the formation and control of business corporations by a single interested person or company with the help of a nominal and temporary shareholder.

21- What are the minimum capital requirements for forming a Costa Rican business corporation?

Business corporations in Costa Rica generally do not have a minimum capital requirement for purposes of formation. The most notable exception are those business corporations intended for operations in the financial and banking sectors where mandatory and significant levels of initial capitalization do apply. Of course, specific needs such as participation in public bids and concessions, obtaining of financing, etc. can dictate a need for real levels of registered capitalization. Registered capital stock may be denominated in local or foreign currency.

22- What regulations govern beachfront property?

Costa Rica is famed throughout the world for its beautiful, untainted beaches. It is therefore no surprise that beachfront property is actively sought by American developers, retirees and those looking for vacation homes. The significant caveat regarding beachfront development is that it is rarely the bargain it appears.

The principal problem is that no private ownership of beachfront property is allowed. The Costa Rican government owns the first 200 meters of the beach front area, known as the Zona Marítimo Terrestre, or the Maritime Zone, and it is governed by the Ley sobre la Zona Marítimo Terrestre (hereafter referred to as 'ZM'). The first 50 meters are public beaches on which absolutely no construction may take place or any concession be granted. The remaining 150 meters may be developed via special "concessions" that are granted by a governing Municipality (ZM Art. 35). In order for any construction to take place on this 150 meters the area must be part of a Plan Regulador, or a special zoning district created by the Instituto Costarricense de Turismo (ICT). It should be noted that some privately owned beachfront property does exist, due to the fact it was registered prior to the 1977 Maritime Zone law, which has a grandfather provision providing for such ownership (ZM Art. 6).

23- Lets talk about zoning laws in Costa Rica

Yes, there are zoning laws in Costa Rica, although San Jose is the only area with prominent zoning.

Zoning Regulations on Maritime Beach Properties in Costa Rica

In the late 70's, the Costa Rican government developed specific laws to govern the appropriate ownership of properties that fall within the country's maritime area. The constitution basically divides the coast line into two separate zones, namely the Pacific and the Atlantic Costa Rican coast line. These areas are classified according the high tide levels measured from the interior. An important region of Costa Rica's nautical locale is a constrained zone administered strictly by local municipality officials.

The general classifications of the area are divided with two hundred meters breadth from the coast line. The first division, the public zone, includes a fifty-meter belt that stretches from the high tide mark of the beach down to the outer limits of the restricted area. The public zone, as the name suggests, is disclosed to public use. It follows then that there are no private properties and private use of the land is limited to legal consents.

The government offers lease grants called concessions for investors who wish to occupy the area for a long-term range. These profitable areas are lucrative for business and private use. Building requirements in these areas are also regulated accordingly by the municipality officials.

24- What is concession property?

In Costa Rica, a concession is defined as the right to use and enjoy a specific portion of land located on the shoreline zone for a pre-determined period of time and based on a predetermined use of soil (zoning or master plan, known as "Plan Regulador"). The Government, through its corresponding municipality, grants this right by means of a private agreement between concessionaire and municipality that is further recorded in a Public Registry. This agreement also establishes a yearly concession fee that is paid based on an appraisal performed by government financial authorities.

Costa Rica's shoreline zone is comprised of 200 meters starting at the mean hightide mark and heading inland. The 200 meter zone is government owned. No individual or company can own the 200 meter zone. The shoreline zone is is divided into two strips of land:

i) The first strip is 50 meters (approximately 150 feet) wide is known as the "public zone" and is absolutely public. This zone is not available for ownership of any kind. No development is allowed, except for constructions approved by government entities (i.e. marinas). Furthermore, this area is deemed public, therefore, it is available or use of any individual.

ii) The following 150 meters can be subject to occupation or lease by individuals or companies, either through a concession with the respective municipality (in case of residential and commercially exploitable portions or land) or a management Plan with the Ministry of Environment and Energy (MINAE), in the case of environmentally sensitive, low density, portions of land. In both cases, the property can be used, although not owned (same as with a lease). Both concession agreements and managements plans are entered into between private parties and the Government for a limited period of time that ranges between 5 and 20 years, at Government's discretion; however, most concessions and management plans are granted for 20 years. During such period, the concessionaire pays a fee to for the use and occupation of such Government land. Renewal for equal and consecutive periods is negotiated between private parties and the corresponding government authority and, such renewal is usually based on the concessionaire's ability to comply with its commitments and obligations during the previous agreement. Such obligations include having assumed the compromise to build on that concession land, subdivide it or perform other acts of development or improvement on the land, in which case, the concessionaire will require to obtain with all appropriate permits from the local municipality.

25- Are electricity and water available in rural areas of Costa Rica?

This largely depends on the location, but most properties have electricity and water brought to the property boundary. It is the responsibility of the owner to connect those utilities on the property itself.

The telephone service, electricity, and internet is owned and operated by ICE, the government agency that controls almost all the utilities in Costa Rica. Costa Rica has an excellent phone system. The first thing to know is that the ICE only registers fixed lines for residents. If you are waiting for residency or are a tourist, you will have to use a cellphone, or use your corporation name to register a new residential phone line.

Electricity/Gas

The government agency, ICE, provides electricity to approximately 95 percent of the country, in Guanacaste we mainly use Coopeguanacaste electric company. The remaining five percent is located in remote rural areas where few, if any, expatriates live.

Electricity costs approximately USD$0.10/kWh, which averages about USD$20-$30 per month for a modest home. ICE also charges rates on a sliding scale depending on how much you use and the time of day in which you use your electricity. Houses that use more, pay more. Luckily, Costa Rica is full of cost-saving devices to help keep your electricity bill low. Many households use on-demand water heaters and energy-saving appliances.

Water/Sewer

In urban areas, over 95 percent of homes are connected to a municipal water supply which provides treated, potable, drinking water direct to your home. Most rural homes are also connected to a water supply and may also use a water well to supplement their water needs. These homes will have water meters that the government utility, Acueductos & Alcantarillados, or A&A, will monitor and charge USD$0.25 per cubic meter of water. Most water bills come to USD$5-10 per month thanks to low costs and a number of low-consumption appliances in most Costa Rican homes. Clothes washers are usually semi-automatic and use less water and many homes have on-demand water heaters and adjustable shower heads. While more newer homes are using hot water tanks that supply a constant stream of hot water to faucets and appliances, most people are accustomed to using cold water for almost everything, especially if they live in coastal areas.

Almost all homes in the country have access to either public sewage systems or individual septic tanks, or both. If you are living with a septic tank, there will be a few local companies that can provide you with septic services.

26- Recommending Buying or building?

I assume a question that is on the mind of those of you planning to come to Costa Rica and looking for a place to stay is whether it is best to rent a house in Costa Rica, buy an existing home and move into it, or buy a piece of land and build on it. Obviously, it all boils down to a personal preference.

That depends on what you want. If you find your dream property already built, chances are you can negotiate a great deal. However, purchasing your ideal land and building can also prove an amazing value, so it all depends on your preferences and needs.

If you're planning to retire to Costa Rica or live here permanently, then it's a totally different story. Most of us, if not all, have been conditioned to own our homes, and indeed there is no better feeling than the security that comes with owning the property you're living in. So if you've been to Costa Rica a few times or know that Costa Rica is right for you and want to call it home, then you should seriously consider owning a house, either through buying an existing home or buying a piece of land and building on it.

If you want to build, you should keep in mind that the Costa Rican law requires any application for a construction permit to be presented by a licensed architect or engineer. Costa Rica does have very strict construction regulations and all must be approved at the local Municipality before staring any construction.

If building, prices per square foot of construction including materials runs approximately $80 or $110 in Costa Rica) My advice is to visit Costa Rica and personally check and analyze the housing opportunities that avail themselves to you while you are here. It's a personal decision, one that you should very carefully consider and think about from every angle.

27- Can I have a home built in Costa Rica to North American standards?

There are numerous Canadian and American builders and architects that work in Costa Rica and build homes using U.S. standards. Many have adapted their building methods to take advantage of local building materials and labor.

Building a home is an exciting experience. The planning and imagination involves many people, family members to construction crews, which involves detailed communication and precise engineering. There are few companies with North American standard's comprised with designers, engineers, builders and trade workers who are supervised together to produce luxurious, tropical homes.

Choosing a builder is just as important as choosing a home. When it comes to building in Costa Rica builders must be informed of the legal process that are very different then in North America. If You're out of the country then progress photos, videos and detailed emails will keep you informed as your home building advances. Builders must provide warranties, certified pro-formas, work site insurance policies and adhere to the all architectural and engineering regulations in CR.

28- How can I find a good builder?

Recommendations and references are extremely important in Costa Rica. Ask around, check with friends, and inquire on online forums and message boards for good recommendations. Your embassy may also be able to help.

There are 3 options for building your home in Costa Rica.

  • Local Builders recommended, you select a local builder that has a good reputation for quality and service.
  • Use one of our crews and have an engineer or architect to supervises the construction.
  • You manage one of our crews and you supervise the construction.

When building a home in Costa Rica, the number one concern must be constructing your home for earthquake conditions. While earthquakes are rare, our last good shake came in September 2012, they do happen. There are many ways to construct a home in Costa Rica. You could work with a recommended architect and contract out for labor only. This way, you get all of the discounts on building materials and there is no builders' markup on the items purchased for construction, this options just in case you are close in the area to watch after the construction to be sure all will get done the way you want. Most Builders will markup the cost of building materials 30% to cover cost and profit.

29- Are squatters a problem?

According to Costa Rican law, a squatter can acquire rights to a property if the property owner allows that person to use or maintain possession of the property for more than a year. Once the property has been acquired it cannot be taken away, except for reasons such as eminent domain, and then only with proper compensation. To guard against this possibility, hire a caretaker to live on the property, or a close friend or realtor to watch after your property.

Squatters Rights in Costa Rica

Squatters, or precaristas, begin to receive rights to a piece of real estate after 3 months of living on the land. After a year, the squatter can apply for expropriation with the Agriculture Development Institute (IDA). If the IDA declares the property in conflict, the land is sold and handed over to the squatters. Oceanfront real estate in The Maritime Zone can not be owned, it can only be leased, and prime beach front properties often attract many problems with squatters. If squatters are not evicted within 3 months, the process of eviction can be long and expensive, often resulting in the loss of the property.

30- How it works to hire a Property Manager?

Yes, caretakers are affordable – generally about $600 per month plus lodging and including social security – and offer excellent protection for your property.

Think about hiring professional property managers. There are advantages to this expense. This company will handle repairs and screen potential renters, they will book your rentals, do your checks in/check outs, look after any kind of maintenance on the property, work on your accountant, etc. That will give you more time to look for additional investment opportunities.

31- Will I be able to hire household help?

Household help is very affordable. Housekeepers, who often double as nannies and cooks, earn approx. $3 per hour. Handymen and gardeners charge about the same.

Labor laws in Costa Rica are very comprehensive and totally universal. Strict enforcement of these laws ensures that all Costa Ricans are protected without discrimination. As a foreign resident, one should have a thorough understanding of the rules in order to develop a trusting and fair relationship with the employee and to avoid penalties and legal entanglements concerning workers' rights.

a. Length of Employment

The first thirty days of employment is the trial period. Either party, employee or employer, can terminate the work contract without notice. If, during the trial period, the employee works over 20 days, both vacation and a Christmas bonus are due, as well as social security for the worked time. After the trial period, one day of vacation time is granted for each full month of employment for about two weeks of vacation per year. However, many employees, by custom or through union contracts, will receive three weeks of vacation per year.

b. Hours of Employment

As a general rule, domestic labor shall work no more than eight hours a day, six days a week. In addition, employees should get a paid day-off for major holidays including January 1st, Holy Thursday, Good Friday, Juan Santamaria Day (April 11th), Labor Day (May 1st), Annexation of Guanacaste Day (July 25th), Independence Day (September 25th), and December 25th. If an employee works on these days they are entitled to double their wage. For regular, non-domestic employees, double time is paid for work on Saturday and Sunday.

c. Social Security

Managed by the Caja Costarricense del Seguro Social (CCSSS), the institution of Social Security covers health care, disability and sick leave. It is probably the most important obligation for the employer and the one most stringently overseen by the government. Within the first eight days of employment, the employer must register the worker with the CCSSS. Failure to do this can produce stiff penalties. If an unregistered employee becomes injured or sick, the employer could be obligated to pay for the medical bills and half of his/her earnings for the time that they are incapacitated. Once the worker is registered, the employee is only liable for 50 percent of the earnings for the first three days, after which Social Security picks up the rest. Pregnancy is another issue that employers must be informed about. A pregnant employee is entitled to both full salary and a leave of absence. The leave of absence begins one months before the projected birth of the child and lasts until three months after birth. During this time, the employer is obligated to pay for half of the salary and Social Security picks up the rest.

d. Wages

The minimum wage varies according to the job and skills of the employee. As of 2001, the minimum wage was US$125 per month, now it is somewhere by $400. This wage probably seems very low to the Westerner, exceedingly high to workers in neighboring Central American countries, and relatively low to the actual domestic help in Costa Rica. The truth is that US$125 is about twice what hired labor is paid in surrounding Central America, yet very low by Costa Rican standards. As a rule of thumb, in order to pay a fair wage and attract good, reliable help, employers should pay the acceptable wage of labor in that area, even if it is higher than the minimum wage.

e. Christmas Bonus

Otherwise known as Aguinaldo, hired labor is guaranteed by the employer an annual Christmas bonus payable between December first and the 20th. Payment works like this: Employees that have worked for a full year prior to December first should receive a Christmas bonus equal to one and a half month's pay. Those that have worked longer than the 30-day trial period but less than a full year shall receive a prorated bonus. Therefore, an employee that has worked for six months should receive a bonus equal to 9/12 of one month's earnings.

f. Notice and Severance Pay

Employees of more than 90 days and less than a year are guaranteed a two week notice before being laid off. Those employed after a year are entitled to a one month notice. If the employer fails to give notice, they are required to provide the employee's full wages for the period of notification. Dismissing an employee must be documented with the CCSSS and an appropriate severance pay is required dependent upon the employment period: up to three months, no severance is required; two weeks' pay for four to six months; one month's pay for seven months to one year. For each additional year of employment, one month's salary is due, or the employee is entitled to a prorated fraction of one month's pay after the first six months. The maximum amount of severance can never be more than the equivalent of eight month's pay. In addition to the total severance pay, the employee must be paid unused vacation time, the proportionate aguinaldo, and all wages due.

While it is evident that the Costa Rican government protects its workers, employers are also protected from the misbehavior of their employees. An employer can hold an employee responsible for damages to property or person caused intentionally or by accident. In addition, an employee can be dismissed without notification and severance if the employer can show a "notorious lack of respect or civil treatment". However, it is important to remember that the Ministry of Labor is partial to the working citizens of Costa Rica, and that to accuse your employee of such transgressions requires good, solid proof and, better yet, a reliable witness.

32- When is it best time to visit Costa Rica?

Anytime of the year is a good time to visit Costa Rica. This really depends on individual taste and on the activities you want to experience during your stay.

If you are looking for maximum sunshine and water activities, the Dry Season (also known as, the High Season) may be your best option. From December thru April, the weather is sunny and warm (hot at sea level). Beach resorts and tour companies are very busy during this time of the year. The Peak Season includes Christmas, New Years, and Easter. These three weeks are the most expensive and busy of the year. Finding accommodations can be difficult during this time, so plan ahead.

The Green Season (Rainy Season) typically runs from May to November. The countryside is lush and the rivers and creeks are full. There is usually sun in the mornings and rain in the afternoons, typically for a couple of hours. Some days it may rain for more than that or until next day, but those are the exception. The Green Season is attractive because the price for rooms and rentals are lower.

In general, the best time of year to visit weather-wise is in December and January, when everything is still green from the rains, but the sky is clear.

33- Selling Costa Rican real estate?

Because the seller owns the Costa Rican property, they can sell their real estate property in Costa Rica at any time. The seller may choose to list the property with a local realtor in Costa Rica or international newspapers. It should be noticed that there is a well-organized active real estate market in Costa Rica and working with a knowledgeable Costa Rican realtor is just the same as working with a realtor in the U.S.A.