Legal and Financial

Many foreigners are drawn to the natural beauty, warm climate, and laid-back lifestyle that this stunning country offers. But one question that often comes up is whether foreigners can own property in Costa Rica. Well, the good news is, yes, they can!

 

Costa Rica is known for its welcoming attitude towards foreigners, and its property laws reflect that. Whether you're looking for a vacation home, an investment property, or a place to retire, owning real estate in Costa Rica is within your reach.

 

One of the key reasons why owning property in Costa Rica is so accessible to foreigners is the country's laws regarding property ownership. Unlike some countries where restrictions may apply, Costa Rica has almost no restrictions on foreigners owning property here. Whether you're a resident or a non-resident, you can own property outright in your own name.

 

Why Consult an Expert?

 

When it comes to buying real estate in Costa Rica, having a knowledgeable broker by your side can make all the difference. As a seasoned broker here in Playa Hermosa, I've seen firsthand how crucial it is for buyers to have expert guidance throughout the purchasing process.

 

Costa Rica's real estate market is unique, with its own set of regulations, customs, and challenges. Without the right guidance, buyers can easily get overwhelmed and make costly mistakes. That's where a knowledgeable broker comes in.

 

One of the key benefits of working with a broker is their expertise in the local market. They have in-depth knowledge of the different neighborhoods, property values, and market trends. This insider knowledge can help buyers make informed decisions and find the perfect property that meets their needs and budget.

 

Additionally, a broker can help buyers with negotiations. They can leverage their experience and market knowledge to negotiate the best possible price for the property. This can save buyers thousands of dollars in the long run.

 

Another important role of a broker is to provide access to a network of professionals. From lawyers to inspectors to contractors, a broker can connect buyers with trusted professionals who can help with every aspect of the buying process.

 

A broker can also provide you with finding the proper legal team for legal advice. In Costa Rica, real estate transactions can be complex, especially for foreigners. A broker can help explain the legal intricacies, ensuring that the transaction is conducted properly and all legal requirements are met. This is especially true when you are not familiar with the process and terminology involved in transacting business in a foreign land.

 

Due Diligence is Key

 

A title or deed is called an "escritura" in Costa Rica. The first thing you are going to want to find out about a property is if the title is properly registered and free of liens, encumbrances and annotations. This is extremely important because it is common in Costa Rica for properties to have been in a family for years. Often these properties were never properly registered or have had the taxes paid. To do a title search, your lawyer will take the Folio Real Number of the property and insert in the national registry System to ensure it is clean or if it has issues. They will check their records and provide you with current information about the desired property.

 

The process of transferring the title must be prepared by and executed before an registered licensed notary. In North America, a notary only authenticates signatures, but in Costa Rica, the role is much more expansive. To be a notary in Costa Rica, you first must be an attorney, then go to school for 2 more years and pass more exams to become a "Notario" or notary.

 

Closing Costs

 

How much can you expect to pay in closing costs? The custom in Costa Rica is for the buyer to pay the costs. The closing costs will be about 4-5 percent of the purchase price. The seller typically pays the realtor’s commission. For a more in depth breakdown of closing costs please check out this article (Buyers closing costs in Costa Rica)

 

Beachfront Property: A Special Case

 

There is only one type of property that a person who has not been a legal resident of Costa Rica for 5 years cannot buy outright, and that is concession beachfront property. The first 200 meters inland from the medium high tide mark is called the Maritime Zone and can only be leased by a concession from the local municipality. This land is not titled. Concessions can be granted for 5 to 20 years, the latter being the more common.

 

The lease could be transferred through a legal shell corporation in which a Costa Rican citizen is the majority shareholder. Keep in mind the first 50 meters from the medium high tide mark is considered a public space and cannot be built on. There are strict requirements for building on the remaining 150 meters. For example, there are restrictions on building heights in certain areas to protect the environment and preserve the natural beauty of the country. So you will want to do all sorts of due diligence BEFORE deciding to purchase the concession. 

 

Conclusion

 

There are so many beautiful properties in the Playa del Coco area just waiting for you to customize and call home. What a relief it is to know that you can own it without being a resident…although once you live here you will never want to leave! 

 

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Here are 5 lesser-known facts about US Social Security the every Ex-Pat should know.

Social Security is often the foundation of retirement plans but many Americans have been paying into the system for years without knowing how the system actually works – especially when they retire abroad. Here are 5 lesser-known facts about Social Security that any retiring ex-pat needs to know.

Qualifying for Social Security benefits is really easy

To receive benefits at retirement, you must simply earn 40 "credits" over at least 10 years of work. This boils down to about $1,200 a quarter, which is so low that you could probably qualify by working a seasonal job! Many ex-pats contribute to the US Social Security system even when living abroad so the ex-pat status does not "exempt" one from Social Security benefits.

In addition, if you earned money in the US and paid into the US system, the credits you earned will remain on your Social Security record.

You can receive Social Security benefits overseas

Eligible US citizens can receive benefits when living abroad, with a handful of small exceptions. The Social Security Administration (SSA) is prohibited from sending payments to Cuba or North Korea but they will send all withheld payments you were eligible for once you leave the restricted country. Note that non-US citizens cannot receive payments for the months they lived in Cuba or North Korea, even if they move to a country where payments are allowed.

There are also a handful of countries where payments cannot be made, but for the purpose of this article we are talking about Costa Rica and yes you can receive your benefits here.

The Social Security system isn't penniless (yet)

According to the 2014 annual report from the Social Security Board of Trustees on the financial status of the program, without policy changes, the combined Social Security trust funds will become depleted and unable to pay scheduled benefits in full on a timely basis in 2033. After that, Social Security could pay about three-fourths of scheduled benefits through 2089.

Analysts and reports differ as to what year the funds will begin to fall short but the guesstimate has remained between 2029 and 2042 for the past 20 years. Americans are encouraged to diversify their retirement portfolio to ensure they don't rely too heavily on benefits that may (or may not) be available when they are needed.

Totalization Agreements prevent dual-taxation

The US has entered into agreements with 24 countries to ensure expats are not forced to pay into two Social Security systems. These agreements allow you to choose which system you would like to pay into.

If you are self-employed, this may not the case, as self-employed individuals are generally subject to the US Social Security system. These taxes are included in self-employment taxes, currently 15.3%, and are assessed on net business income. However, in countries with a Totalization Agreement, self-employed individuals who are subject to self-employment tax in the foreign country will be exempt from US self-employment tax. A certificate of coverage must be obtained from the country of residence to provide proof of the individual's participation in another Social Security plan.

Self-employed individuals will be subject to dual taxation if they choose to live in a country with which the US does not have a Totalization Agreement, as in Costa Rica.

SSA benefits may be taxed

No matter where you go, US taxes will follow! US citizens and residents can expect up to 85% of Social Security benefits may be subject to federal income tax. How much is actually taxable depends on the total amount of your benefits and other income you receive.

Generally, the greater your total income, the higher the taxation. The taxes are calculated as follows:

Up to 50% of your benefits will be taxed if your income is greater than $25,000

Up to 85% of your benefits can be taxable if either of the following situations applies:

• The total of one-half of your benefits and all your other income is more than $34,000 ($44,000 if you are married filing jointly)
• You are married filing separately and lived with your spouse at any time during the year.

It is important to note that many foreign governments tax US Social Security benefits so we encourage you to check your country's tax laws to get an accurate picture of your overall taxation.

Note: This article was written by David McKeegan and edited for Costa Rica, all credit goes to David.

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Interested in finding a property in Costa Rica? Check out our extensive listings here:

• Homes/Villas
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• Development Properties
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Want to keep up with everything that is happening here in Costa Rica? Join my email list!

Need more information about Costa Rica in general? Read our FAQS about Costa Rica page.

Interested in owning a property in Costa Rica, checkout some great options here

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Creating a last will and testament is the responsible and right thing to do for your loved ones. Find out why and how to get this done.

When living in paradise it can be difficult to think about the less savory topics such as your last will and testament. Costa Rica will honor your US/Canadian last will and testament only after it has gone through the probate process in your home country and can take up to 2 years to go through the courts and probate of Costa Rica. The last thing you want to do is put your loved ones through a difficult and expensive probate process.

If you have assets in Costa Rica such as a property, bank account, car, and so on, you will need to have a will created according to Costa Rican laws to ease and expedite the probate process.

The process to create a last will and testament

The process to create a Costa Rican last will and testament is fairly simple and reasonably priced. You will need a Costa Rican notary public or an attorney who is also a notary. With the notary you will draft a will declaring all your Costa Rican assets and specifying who the beneficiary/beneficiaries will be. After this draft is created the notary will create a public deed including all of this information and require it to be signed by at least 3 witnesses. This public deed is called a “testimonio” and your notary will supply you and the National Records building “Archive Nacional” with a certified copy. You can revoke or modify your will at any time and since it is publicly recorded you can always request another copy from the National Records building. It is important that you also make sure to send a copy to your beneficiaries and the executor of your will.

There is always a probate process

Keep in mind that regardless if you have a will or not, there will be a probate process. Yes a last will and testament will expedite the process through the courts but you should still guarantee that your beneficiaries will have the funds necessary to go through the process. There will be notary fees, National Registry fees, and the real estate transfer taxes. If you own a bank account here in Costa Rica, you can appoint beneficiaries that will receive access to your accounts without a probate process. This way your beneficiaries can pay for the necessary costs to carry out your final wishes.

Another option: create a Trust

Another great option is creating a trust. A trust is a formal agreement between you and this entity, that states the trust owns the assets. Assets will be transferred to the beneficiaries you have designated at the time of creating the trust if you pass away. Before you purchase any assets, the trust must be created so that you can transfer the assets directly to the trust that is administered by a bank or escrow company. Of course you can transfer assets to a trust later but this will be an additional cost so it is easier to have the trust created prior to purchase.

Creating a last will & testament is the responsible and right thing to do for your loved ones. Each case is different and it is best to talk to your trusted attorney on what the best option is for you. If you have any questions or need recommendations I am more than happy to assist.

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Interested in finding a property in Costa Rica? Check out our extensive listings here:

• Homes/Villas
• Condos
• Lots
• Commercial/Businesses
• Development Properties
• Farms and Ranches

Want to keep up with everything that is happening here in Costa Rica? Join my email list!

Need more information about Costa Rica in general? Read our FAQS about Costa Rica page.

Interested in owning a property in Costa Rica, checkout some great options here

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Thinking of throwing in the towel, tired of being bossed around and under-appreciated by your boss or the company you work for? The Team at Tres Amigos Realty in Playa Hermosa, came up with a list of Costa Rica business ideas we think would be profitable for the owner and good for the area as well.

We hear all the time from people that want a new adventure and a life in Costa Rica, “what can I do to make a buck”? Now I am not recommending you start a business that you know nothing about and I am not saying you are going to make a fortune, but that all depends on you and your work ethic. Most of us in the group have lived and worked in the area for an average of 10+ years, we see the opportunities that are needed.

Of course, there are a lot of legalities working in a foreign country and setting up a business. The most important thing I can tell you is you need good legal advice to help you do things correctly and legally. As an example, here in Costa Rica a foreigner cannot legally work until they have their full permanent residency, without restrictions or they must be sponsored by a corporation and can prove your skill set is something that cannot be filled by locals. However, you are legally allowed to be the owner of a business, you just cannot take away the job of a local, that is until you have your full residency.

Below is the list of business ideas we came up with and I placed a few comments after some of them

1. Salad bar with all the fixings: Fresh produce is abundant in Costa Rica and with great farmers market in Liberia this would do really well so long as you also promote to locals as a way of eating healthy.
2. Home Inspection Company: Being in the Real estate industry we do have 2 options we offer our clients but would really like more.
3. Pet Sitting Service: I know many expats that adopt loving Tico dogs and cats but they like to travel back to their home country and if you’re an animal lover this could be a great option for you
4. Traveling Food Truck, road coach as it used to be called years ago. With the big trend of food truck in the US and Canada, it is making its way here, someone serving original, different and fresh foods will surely be popular. Think about going from beach to beach while serving great food.
5. Official Translator that is fluent in both English and Spanish: I know many times I am in need of this service and so are others. If you 100% fluent in Spanish the gringo expats will be knocking down your door.
6. Appliance Repair: We utilize one guy who is great and does a really good job. The problem is he lives an hour away and you have to wait till he is in the area. Imagine no refrigerator for a week and half?
7. Boat Mechanic: This is a no brainer, we are on the Pacific coast and to find someone that really knows what they are doing, without taking the boat to Puntarenas (about 2.5 hour away by car) would be a God send.
8. Senior Care Giver (in Home): This is an important one especially since we have many retirees that move to the area and well we all will get old and sometimes need some help.
9. Any Online Based Business: Now that we will have fiber optic lines being laid throughout the Playa Hermosa, and Playas Del Coco areas providing much better high speed internet.
10. Plumbers: I mean a real plumber, not just a guy that can do some basic stuff.
11. Home Security Systems: We have a few companies here but the follow up is much to be desired and of course there is the communication issue.
12. Electricians: See Plumbers above same thing.
13. Golf Cart Rentals and Especially Repairs: Being a small area, a lot of people own them here, and vacation renters like to use them as well. But most are electric, gas would be so much better and people that are certified or trained on how to repair them properly.
14. Activity Equipment Rentals: You know, items like bicycles, or scooters, kayaks, beach stuff, fishing gear, stand up paddle boards. Since we are right on the ocean these would be great to have that maybe even deliver and then pick them up after you are done.
15. Home Decor Store: No explanation needed here, Heck when I wanted new pillows for my sofa it was a chore to find nice ones and I had to go to San Jose just to get new lamp shades.
16. Exterior Window Washing: If you start this type of business, your hired, I live on the third floor, you won’t see me trying to clean the outside windows
17. Real Delicatessen with Smoked Meats: This is probable the best one on the list as far as I am concerned. I miss this the most from the US
18. Sporting Goods Store: And not just Soccer supplies.
19. Real Asian Food: Yes, there are sushi joints around and so called Chinese restaurants and they are ok, but I would die for some real Thai food, or even north American style Chinese food. It is really easy to turn Arroz con Pollo (rice and chicken) in to Chicken fried rice. Just add soy sauce, and stir. HAHAHA. Indian cuisine would be great, different curries, Tandoor cooked meats and fish and let’s not forget naan. Yummy, I'm getting hungry.

So, if you’re thinking of making a move and want to start a new life in the tropics, there are many options to consider that can keep you busy and make you money. Do you have a specialty you’re good at? Want to know if it is needed here? Just send me a note and let’s discuss.

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Interested in finding a property in Costa Rica? Check out our extensive listings here:

• Homes/Villas
• Condos
• Lots
• Commercial/Businesses
• Development Properties
• Farms and Ranches

Want to keep up with everything that is happening here in Costa Rica? Join my email list!

Need more information about Costa Rica in general? Read our FAQS about Costa Rica page.

Interested in owning a property in Costa Rica, checkout some great options here

Have a comment or a question? Feel free to EMAIL ME

Like the article? Please share!