How can I sell my car in Costa Rica? Notarized car transfers.
So you want to sell your car? Cars are assets registered to their owners in the Public Registry of Costa Rica. The same goes for real estate properties. So when you buy a car in Costa Rica, in your name, it must logically appear in your name. The same will happen if you sell your car. The vehicle will end up registered to the buyer, the new owner.
You should know that vehicle deeds don´t circulate like a check. You can’t sell the car by endorsing a “car deed”, like in other countries. Instead, these documents are only used to show ownership of the car. To transfer your car to another person, you must hire the services of a notary public.
What types of vehicle transfers exist under Costa Rican Law?
We are talking about vehicle transfers. There are two ways in Costa Rica, to transfer your vehicle: through a sale or a by making a donation. In both cases, both parties must hire a notary public. The attorney will draft the transfer scripture which both the seller and buyer must agree to, and sign. Besides legal fees, vehicle transfers pay 3.5% in taxes and registry costs. This tax rate will always be based on the highest of these two factors: the sale price and the fiscal value of the car.
I want to sell my car. How can I determine the car's fiscal value, for tax purposes?
If you wish to sell your car, and you are unsure about its fiscal value, all you have to do is log into the Public Registry or have your attorney do it for you. Once you access the corresponding site with the plate number, you can ascertain the vehicle’s information. The Registry will certify all important information, such as who owns the vehicle, its fiscal value, and important characteristics. It also tells us if the car has encumbrances or judicial annotations. This is extremely important information, whether you wish to buy or sell a vehicle in Costa Rica.
I wish to sell my car. Can you walk me through what I must do?
Most certainly. You must first find a buyer to sell a vehicle in Costa Rica. Once you have negotiated the price, you must hire a notary public to perform the notarized scripture. Both the seller and buyer must sign the scripture, which is the notarized sales contract. This is done in a public scripture, in a notarized fashion. Once you employ the notary and sign the paperwork, the notary public will register the copy of the public scripture in the Public Registry. He will need to pay the taxes and associated costs. The Registry will then proceed with the registration process. The car will be successfully transferred to the new owner if no defects exist in the notarized paperwork.
I wish to buy a car in Costa Rica. What can you recommend?
If you wish to buy a car and you need help finding where to look, there are interesting options online. You can search for a car from a seller on CRAUTOS. Once you find the vehicle you wish to buy, have it inspected by a mechanic, and hire an attorney/notary public to help you with the transfer. You should also consider setting up a corporation in Costa Rica to act as a holding company for the asset. This has several advantages, especially for expensive vehicles. If not, have it in your name. Your attorney must also perform a small due diligence check to ascertain that the car has no legal responsibilities or liens.
Should I sell my car or donate it? What is the difference?
A sale is an onerous contract. A sale is legally perfected when the seller and buyer agree to sell and buy an asset, respectively. An essential element in a sale is the agreement on a price. A donation, on the other hand, has no price. The person who receives the donation is not paying for the transfer. In both cases, however, you still have to pay the notary´s legal fees and the transfer taxes and registry costs. If you sell your car for more than US$10,000 (ten thousand dollars), the banks will require you to show the origin of the funds. You should request a copy of the public scripture, to the notary public that did the transfer to show to the banks.
Are there other ways to own and transfer vehicles in Costa Rica?
A popular way to own a vehicle is to put it in the name of a corporation. This is a good idea if the vehicle is expensive. Remember that the fiscal value will determine the amount of transfer taxes you have to pay. How ever, if the price of the sale is higher, it will be the price that determines the taxes. The highest of any of the latter. So if it´s an expensive car, transfer taxes can be a problem. Having the car in a corporation is a solution a lot of people consider. When you wish to sell the car, all you have to do is transfer the corporation’s shares to the buyer. You will avoid paying high legal fees, car transfer taxes, and registry costs. Another option is to simply lease a vehicle. The monthly payments are even tax deductible if you use the car for your work. You can also rent a vehicle and have the rental payments as tax-deductible. Contact us to help you with your car transfer.
Dr. Christopher Pirie Gil.