Costa Rica has established itself as a preferred destination for foreign investment, especially in the real estate sector. Political stability, natural beauty, and economic opportunities make this country an attractive place for those looking to invest in real estate. However, before making any property investment, it is essential for foreign investors to understand their rights and obligations under Costa Rican law, as regulations vary significantly from one country to another. In some destinations, foreigners face restrictions or even prohibitions on acquiring properties; therefore, informed knowledge is key to ensuring a safe and successful investment.

 

Property Rights for Costa Rican Citizens

In general Costa Rican citizens have full and unrestricted rights to acquire, possess, transfer, and inherit real estate throughout the national territory. Costa Rican law recognizes ownership as a fundamental right, granting full freedom to mortgage, lease, or sell their property.

All real estate transactions must be registered with the National Registry, ensuring traceability and legal security. This process must be carried out through a Notary Public, who in Costa Rica is also a licensed attorney. This procedure provides the transparency and security that both domestic and foreign investors demand, guaranteeing each transaction is properly registered and legally supported.

 

Property Rights for Foreigners

Generally, foreigners enjoy in Costa Rica rights nearly identical to those of nationals regarding property acquisition. The legislation does not impose restrictions on a foreign investor, whether operating personally with their passport or through a local corporation, to acquire real estate. For this reason, Costa Rica is particularly attractive for foreign investors, who, protected by the Political Constitution, can acquire ownership of real estate with the same rights and obligations as Costa Rican citizens.

 

Restrictions and Specific Considerations

However, there are limitations in certain areas, mainly concerning the Maritime-Terrestrial Zone (MTZ). This zone consists of two sections: the public zone, which is a fifty-meter-wide strip measured from the ordinary high tide line, including areas uncovered during low tide; and the restricted zone, made up of the remaining hundred and fifty meters. Access to properties within this strip is regulated differently:

• Ownership in the MTZ: It is not possible to acquire ownership of properties located within this zone; instead, one can obtain a concession granted by the relevant municipality over the restricted zone.
• Concessions in the MTZ: The Maritime-Terrestrial Zone Law (Law No. 6043) restricts granting rights to non-resident foreigners. Concessions can only be acquired through corporations in which Costa Rican nationals hold more than 50% of the participation. Nevertheless, legal options exist to analyze for such transactions, and we are happy to provide guidance.

It is crucial for investors to understand these restrictions before deciding on any coastal area investment to avoid future legal complications.

Overall, Costa Rica offers a favorable and accessible legal framework for both nationals and foreigners to acquire real estate. However, due to the complexity of regulations, especially in restricted areas, it is recommended to seek specialized legal advice throughout the entire real estate investment process. Professional counsel ensures not only compliance with regulations but also the protection of the investor’s rights, facilitating a secure and effective operation in the Costa Rican real estate market.

Article prepared by Andrés Herrera Jaramillo, Director of Real Estate, Attorney at Law at TACTIC Legal in Costa Rica.