Closing Costs when buying Real Estate in Costa Rica

When you plan to purchase a property in Costa Rica, you need to know what needs to be paid. In Costa Rica it is a normal practice that the buyers pays the closing costs, the seller only pays his own attorneys legal fees. On the other hand the seller pays the commission to the broker 100%.

We at Century 21 Beach Area Properties will only offer you clean properties with title. For example when to purchase a property within Los Delfines you will own the property outright, the title (deed) of the property will be transferred to your name or corporation. Because the property will be yours, you can remodel and upgrade your home in your own style. The properties are registered at the public registry!

Some sellers offer to sell the corporation that holds the property, this means you will be buying the shares of the company. You have the option to purchase the existing company or transfer the property to your personal name.

1. Buying real estate in Costa Rica through direct transfer: A purchase process whereby one or more physical individuals acquire a property in their personal name.

2. Buying real estate in Costa Rica through corporations: A common practice in Costa Rica is to buy real estate through a new corporation or through an existing corporation that currently owns the property. The process of forming a corporation is not difficult, but does require a knowledgeable and reliable attorney who understands the exact protocols and procedures necessary to properly set up the corporation. The big advantage of this method is that it allows a purchaser to protect their asset anonymously.

If a buyer buys real estate through an existing corporation that already owns the property, it will save you money as there are no government transfer taxes and stamps to pay. The reason is that property transfer taxes and stamps must be paid in Costa Rica anytime that there is a change in the ownership of the real estate. If a buyer acquires the shares of an existing corporation, there will be no change in the ownership of the property.

However, if you buy real estate through forming a new corporation to buy the property, the transfer taxes and stamps will need to be paid because the ownership of the property will change.

There is a risk involved buying the shares of an existing corporation becuase there is no way to verify 100% that the corporation is clean, although most properties have just an inactive holding company.

The closing cost for a direct transfer are as follows

*Legal Stamps: 1% of the contract price.

*Property Transfer Taxes: 1.50% of the contract price.

*Notary Fees: 1.25% from the total real price (negotiable)

Therefore ask your realtor in Costa Rica what is the best option for you.

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