Costa Rica real estate. ☎️ Property transfer costs and legal fees.
Knowing the property transfer costs and fees of your transaction is key for buying Costa Rica real estate. Let us assume that due diligence is done and the property transaction is finally signed before the notary public. He will need to register the asset, in the name of the buyer, at the Public Registry of Costa Rica. This is when the property transfer costs have to be paid. So what are the real estate closing costs that must be paid when you buy or sell property in Costa Rica? How much are the attorney´s and notary public´s fees?
What real estate closing costs can I expect when buying property in Costa Rica?
When you buy or sell Costa Rica real estate, you can expect several transaction closing costs that the buyer must pay. These may include the following:
- Legal Due Diligence, land survey, and house inspection.
- Legal fees for the Attorney and Notary Public.
- Escrow Fees.
- Transfer taxes, stamps, and registration costs.
- Setting up a corporation to act as a holding company if you wish.
- Realtor fees.
Legal Due Diligence and property closing costs for Costa Rica real estate:
Due diligence is the first step to buying costa rica real estate. An attorney performs it and involves researching the property. The attorney fees for due diligence go from $1,500 to $3,000 and are paid to the lawyer directly. Due diligence can include a house inspection and a survey of land as well. These are paid to the surveyor and topographer directly, costing $700 to $1000 plus sales tax.
Notary public legal fees:
Every real estate sale must be done by a Notary Public, in a public scripture. The seller and buyer must sign the public sales agreement prepared and drafted by the Notary. The buyer will usually select a Notary he trusts, and he typically pays all real estate closing costs. The Notary must then register the property in the Public Registry of Costa Rica. So how much are his legal fees? The property´s value determines the Notary´s fees, which are as follows:
1. If the property is worth less than ten million colones, his fees are 2% of the property transfer value.
2. Over 10,000,000 colones, and up to 15,000,000 colones, the legal fees are 1.5% of the property´s value.
3. For Over 15,000,000 colones, and up to 30,000,000, the notary´s legal fees are 1.25% of the property price value.
4. Beyond a price of 30,000,000 colones, his legal fees are 1% of the property´s price.
Escrow real estate closing costs:
Escrow can be a very secure way to do the property transaction. It´s important to find a reputable escrow agent for this. I close with Secure Title Costa Rica, as they have been in the business for years. Escrow fees depend on the property purchase value, but it´s not too expensive.
How much are the property transfer taxes, and registration costs, for Costa Rica real estate?
Besides paying the notary for his fees, the property buyer must also pay the property transfer costs. These include transfer taxes and registration costs. The transfer taxes are 1.5% of the sales price, or according to the fiscal value, whichever is higher. So if the purchase price for the property is less than the fiscal value, the latter will be used to make the calculation, and vice versa. The Notary must pay the transfer tax to the Public Registry. This, however, is not the only thing you must pay.
The buyer must also pay for registration costs, which include the stamps that must be paid to the Public Registry. These stamps include the National Registry Stamps, agrarian stamps, fiscal stamps, and other fees. In total, you pay around 2.5% of the property value in transfer taxes and stamps when you buy Costa Rica real estate.
Costs to setup a corporation and realtor closing costs:
A popular way to buy Costa Rica real estate is to open a corporation and have the corporation own the property. You must have your notary public create one for you to do this. Prices in Costa Rica range from $850 to $1500 to create one. Another item to take into consideration is the realtor commission fee. These fees are usually 5% and are included in the price sale.
How much are the transfer taxes, and registrations costs?
Besides paying the notary for his fees, the property buyer must also pay transfer taxes and registration costs. The transfer taxes are 1.5% of the sales price, or according to the fiscal value, whichever is higher. So if the purchase price for the property is less than the fiscal value, the latter will be used to make the calculation, and vice versa. The Notary must pay the transfer tax to the Public Registry. This, however, is not the only thing you must pay.
The buyer must also pay for registration costs, which include the stamps that must be paid to the Public Registry. These stamps include the National Registry Stamps, agrarian stamps, fiscal stamps, and other fees. In total, you pay around 2.5% of the property value in transfer taxes and stamps when you buy Costa Rica real estate.
How are the Costa Rica real estate closing costs split?
This is a good question. The buyer always pays due diligence since it´s his prerogative to ensure the property he wishes to purchase has no problems. If you are the buyer and want to create a corporation for the purchase, these costs are yours entirely. The realtor gets paid immediately; his commission is usually fixed on the property’s price. Regarding the notary public fees, transfer taxes, and registration costs, the buyer typically pays all of this. However, even though this is the standard, there is no legal prohibition to split this 50/50. You should also know that if financing is involved, the buyer who requires it will pay the costs related to mortgages, trusts, or whatever financial instrument is used. Contact me to help you with your Costa Rica real estate transaction. You should also inform yourself, on property taxes, before buying real estate.
Dr. Christopher Pirie Gil.