LEGAL - BUYING PROPERTY IN COSTA RICA

By law, anyone – Costa Rican citizen, resident, or foreign non-resident alike – may legally own land in Costa-Rica. For legal and tax reasons, however, ownership and transfers of Costa Rica real estate are best done through a corporation or S.A.

Each of the ocean view and mountain view lots at Lomas Coronado is a titled (fee simpe) property. Clear title will be immedately provided to the buyer. The actual transaction of buying Costa Rica real estate is not overly complicated, but can take some time. Remember that in Costa Rica, patience is a valuable asset. One of the reasons people choose a leisurely tropical lifestyle is to escape the fast-lane pace of North American and European living.

costa rica sunset

Each lot has been duly registered at the Costa Rican Public Record Office. Land transfers (sales) are granted through a public act. A Costa Rican Notary Public (lawyer) records this transaction by inserting the title transfer in his Protocol (numbered ledger). A Notary Public is a licensed Attorney-at-Law who is endowed with "public trust" and has the right to validate and legalize all contracts and deeds. The purchase deed is presented by the Notary to be duly registered in the public records.

Every one of our lots is registered in the Costa Rican Land Registry Office, each with its own registry number. Each individual ocean view and mountain-view property is owned by a separate anonymous corporation (or S.A.), itself registered in the Costa Rican Registry of Corporations. All of the documents detailing ownership of the land and registry information of the corporation (S.A.) are available from the appropriate registry office.

Ownership of recordable assets, such as real estate and motor vehicles, is now the main purpose of most of Costa Rica's registered corporations. This method of "indirect" possession is the most highly recommended means of managing recordable assets.

The advantages of having one’s Lomas Cororado ocean view or mountain view property or any Costa Rica real estate owned by a S.A. rather than held in an individual's name are:

  • An anonymous corporation, as the name indicates, provides a measure of privacy for its owner(s). It will be difficult to obtain information about who owns the shares, providing the discretion which many foreign investors desire.
  • Personal liabilities are reduced by having your assets registered under individual Costa Rican corporations.
  • If you own real estate in your own name, you will have to pay land transfer taxes every time a property is sold. As of this moment, if a Costa Rican corporation owns the property, land transfer taxes do not apply (although legal fees do) – if you decide to sell your Lomas Coronado property or give it to a family member, because you simply transfer the shares of the corporation to the purchaser.
  • There is no capital gains tax paid in Costa Rica when you sell a corporation owning a property, since the sale is a private transaction.
  • Inheritance taxes in Costa Rica are high, but an anonymous corporation (S.A.) never dies. Your spouse or your children can indeed enjoy the fruits of your labor without having to worry about such taxes, as long as you leave them the shares of the corporation in your will. They can then appoint themselves to the Board of Directors of the corporation and carry on the tradition.

lotplanA Costa Rican lawyer will have first incorporated the "blank" corporations that are used for the land transactions. The lawyer is usually registered initially as President and signing officer of the corporation until the corporation is turned over to you. The Board of Directors of the corporation is comprised of a President, Secretary, Treasurer and Comptroller, in order to meet legal requirements. However, only the signing officer and shareholder(s) have legal powers over the corporation.

Once you are registered as President, signing officer and principal shareholder of the corporation (along with any other person/s/ that you may wish), the corporation becomes entirely yours, along with whatever it legally owns.

The deed to the property guarantees you sole rights of who has access to and over the property.

The shares of the Costa Rican corporation which owns the Lomas Coronado ocean view or mountain view property can be endorsed in the name of an offshore IBC if you already own one. Costa Rica real estate cannot be directly registered in the name of the offshore IBC because it is not a legally registered entity in Costa Rica.

To summarize the legal position of our lots:

  • Each lot is registered in the National Registry with its own deed and survey plan (right).
  • Each property carries its own title, in the name of a single-purpose Costa Rica corporation (S.A.).
  • The title to the lot you purchase at Lomas Coronado can be transferred to you immediately - no waiting.
  • You own it - non-Costa Ricans can both own property and possess a legal corporation. You don't even have to be a resident of or live in Costa Rica.
  • Under our Purchase Agreement terms, your purchase money does not go directly to us, but into the escrow account of the Costa Rican lawyer of your choice.
  • Money will be released to us ONLY when the shares of the registered corporate owner of the property have been duly signed over to you.