Purchasing real estate in Costa Rica is a fantastic and sound investment idea. This is a less hurried land, a place where you can relax. Can foreigners buy property in Costa Rica? The short answer is yes, but special care must be taken if you are acquiring a maritime concession! I am Christopher Pirie, a real estate attorney in Costa Rica. Nothing is as relaxing as the ocean, and many people contact me to buy beachfront real estate in Guanacaste and other areas of the country. Indeed, buying a home in Costa Rica is a dream come true.
If this is your case, and you wish to purchase real estate in Costa Rica, there are more aspects to consider than just your everyday due diligence if you want a beachfront property home. If so, you must look into the maritime zone issues. Maritime area due diligence becomes essential when buying a vacation home in Costa Rica if it´s beachfront property.
If you wish to buy beachfront real estate, it is best to be clear on what the maritime zone is. Imagine the ocean in front of you. The maritime area is a zone where there is no private property, but a State-owned area. It runs two hundred meters from the mid-tide line. All beaches are public by law, so there is no private ownership in these areas. According to Costa Rican law, the maritime area is divided in two zones:
The first fifty meters from the mid-tide line is called the public zone. This public zone extends to islands as well. In good theory, no edifications should be in this public zone, which is destined to public enjoyment.
From where the public area ends and up to another one hundred fifty meters inland, the law establishes this is a restricted zone. It’s in this zone, where you can acquire a concession, by the state, to use and enjoy this area. With the corresponding permits, you can enjoy and use the area, with the use of a concession. The point is, you can’t purchase property in this area.
The local governments of Costa Rica, or “municipalities,” grant concessions to use and enjoy the land in the restricted zone for a determined time frame. So even though you can’t buy a home in Costa Rica in this area, you can surely acquire the concession from the Municipality itself or from the person to whom the concession was granted in the first place. Concessions vary from municipality but are usually given for twenty years and may be renewed constantly.
You may want to buy a home in Costa Rica that’s in the maritime zone. But as a lawyer, I must advise you to be very clear. If you acquire beachfront real estate in the maritime area, you would not buy a privately owned home in Costa Rica but instead acquire a State Concession. This is a State-owned area by law, so you would not be acquiring a secure private property title. You would just get a concession or State Permission to use and enjoy that area. It’s important to know what you are getting yourself into! It’s always much better to buy real estate in Costa Rica that is privately owned, which is what most people do.
Every municipality has a Municipal Regulations Plan that establishes the zoning of each concession lot. If the municipality grants the privilege to build houses, you have every right to build one. As part of due diligence, it’s essential to investigate zoning when purchasing beachfront property in Costa Rica, especially in the restricted zone. Even though zoning might allow building, obtaining the necessary permits is still required before proceeding. The person entitled to the concession must also pay a benefit to the municipality, which substitutes the territorial tax.
Since a concession is not private property, you can´t transfer, sell, compromise, or mortgage it. You need authorization from the Municipality and the Costa Rican Tourism Institute for most things. There is no mediation nor arbitration with the State. So, can foreigners buy property in Costa Rica? Yes, you can buy titled property without a problem. However, concessions are a problem. No concessions can be granted to foreigners who have not resided in the country for at least five years. Neither can they be given to corporations constituted entirely by foreigners or to corporations whose shareholders are foreigners, in at least 50%. There are, however, many ways around this. Many people opt to have Costa Ricans set up the corporation, and they later transfer the shares.
You may ask yourself, what happens if you build a house in a restricted area, and the Municipality decides not to renew the concession? The municipality can deny the concession renewal for public interest reasons, convenience, contract breach by the entitled person, or if the property ends up in the public zone. If the concession is extinguished for reasons not to blame the person to whom the benefit is granted, then the state must pay for the just price of the uplifts, similar to an appropriation. All in all, if you are looking into buying a home in Costa Rica, avoid a headache and buy one that is not in the maritime zone.
That´s the easy part. You can choose between the two oceans to buy a beachfront property in Costa Rica. Maybe you like the Caribbean vibe? In this case, you should visit Limón, which is beautiful.
I prefer the Pacific Ocean. I recommend visiting the Manuel Antonio area in Puntarenas or heading to Guanacaste. You will find that buying Guanacaste real estate is a dream come true. This area is dryer and has white beaches and incredible sunsets. Even though Guanacaste is far from San Jose, the Liberia International Airport is convenient. Tamarindo is a popular place to buy Guanacaste real estate.
Many ex-pats, however, enjoy purchasing real estate in Jacó, near San José, the capital of Costa Rica. Buying a vacation home in Costa Rica makes sense. Our country is beautiful and peaceful. We don´t even have an army!
Purchasing real estate in Costa Rica is an excellent idea because of the diversity of climates. We have all environments except for snow. If you are looking into buying a vacation home in Costa Rica, there are many places to choose. Even near the beaches! But I always advise that you buy a home in Costa Rica that´s titled property. Concessions give you a lot of limitations. However, if you are set on acquiring the concession, our real estate law firm can help you with the process.
Dr. Christopher Pirie Gil.
Property attorney at law in Costa Rica.
Law offices in San José, and Guanacaste.