Taxes, Legal Fees and Ongoing Ownership Costs for Foreign Buyers with Coldwell Banker Samara
Buying a property in Costa Rica is an exciting venture, especially in Samara, one of the country’s most desirable coastal areas. Over the past few years, property prices in Samara have risen steadily due to strong buyer demand from international investors and retirees seeking a peaceful yet connected lifestyle. However, before finalising your dream purchase, it is crucial to understand all the financial responsibilities that come with buying and owning property in Costa Rica.
This article explains the taxes, legal fees and ongoing ownership costs that foreign buyers should anticipate. It also shows how Coldwell Banker Samara supports clients through every step of the process, ensuring a smooth and transparent experience from start to finish.
Transfer and Acquisition Taxes in Costa Rica
When purchasing a property in Costa Rica, foreign buyers must pay several taxes associated with the transfer and registration of ownership. The most important are:
Transfer Tax (Impuesto a la Transferencia de Bienes Inmuebles):
This tax is typically 1.5 percent of the registered property value. It is paid when the property title is officially transferred into the buyer’s name. The tax is calculated based on the registered value rather than the purchase price, which may differ.
Documentary Stamp Tax (Impuesto de Timbres):
This represents approximately 0.5 percent of the declared value. It covers the cost of the legal documentation required to register the transaction.
Capital Gains Tax (Plusvalía):
If you later sell your property for more than you purchased it, you may be subject to capital gains tax. The rate depends on the profit made and how long the property was owned.
VAT (Impuesto al Valor Agregado):
Although VAT is not typically applied to residential property sales, some professional services involved in the transaction, such as legal or notarial services, may include a VAT charge.
Altogether, these acquisition taxes usually add up to around two percent of the registered property value. Buyers should always work closely with their attorney to ensure the declared value and the transaction documents comply with Costa Rican regulations.
Legal Fees and Due Diligence Costs
Legal fees and due diligence are essential elements of any property transaction, ensuring that buyers understand exactly what they are purchasing.
Attorney and Legal Representation:
Hiring a local attorney is highly recommended for all foreign buyers. Legal fees generally range between one and one and a half percent of the property value. Your lawyer will verify the property title, ensure there are no outstanding debts or liens, and prepare the purchase documents.
Title Search and Property Due Diligence:
Your attorney will conduct a detailed title search at the Public Registry to confirm that the seller has full ownership rights and that the title is clear. This process also includes checking for easements, encumbrances or boundary disputes.
Survey and Boundary Verification:
In rural or coastal areas, it is advisable to have an updated survey performed to confirm property boundaries and avoid potential disputes with neighbouring properties.
Notary and Document Authentication:
Costa Rican law requires certain documents to be certified by a public notary. This ensures that the transaction is legally binding and registered correctly.
Translation and Certification:
If you do not speak Spanish, you may need certified translations of contracts and deeds to fully understand all legal terms.
Combined, these legal and due diligence costs typically amount to between 0.8 and 1.5 percent of the purchase price, depending on the complexity of the transaction.
Title Registration and Closing Costs
Once all parties agree to the sale and the due diligence process is completed, buyers will face closing and registration costs.
These expenses include administrative fees to register the property in the National Registry, public record fees, and the cost of issuing the new title certificate. An escrow service is often used to hold funds safely until all conditions of the sale are met. Buyers may also encounter courier, document handling and minor administrative costs associated with closing.
Altogether, closing and registration expenses are generally between 0.2 and 0.5 percent of the property value.
Ongoing Ownership Costs
Owning property in Costa Rica involves recurring costs that should be considered when budgeting for long-term ownership.
Annual Property Tax (Impuesto Territorial):
This tax is relatively low compared with other countries, at just 0.25 percent of the registered value.
Municipal and Local Service Fees:
Local municipalities may charge additional fees for garbage collection, street maintenance and community services. These vary by region.
Homeowners’ Association (HOA) Fees:
If your property is part of a gated community or condominium, you will likely pay monthly HOA fees that cover maintenance, security, landscaping and shared facilities.
Maintenance and Repairs:
Costa Rica’s tropical climate means properties require regular maintenance. Painting, pest control, pool servicing and landscaping are recurring expenses to plan for.
Utilities and Services:
Electricity, water, internet and waste disposal costs depend on usage and location. Many areas now offer sustainable energy options such as solar panels to help reduce bills.
Insurance:
While not mandatory, most homeowners choose to insure their property against natural events such as storms, floods or earthquakes.
Property Management Services:
If you are not living in Costa Rica full-time, you may need a property manager to handle rentals, guest check-ins and upkeep.
In general, homeowners should budget between one and two percent of the property value annually to cover all ownership expenses.
Market Trends and Cost Projections
The real estate market in Samara remains strong, driven by increasing international interest, improved infrastructure and Costa Rica’s reputation as a stable, safe investment destination.
Rising material and labour costs have influenced property maintenance expenses, while municipal taxes may gradually increase as valuations are updated. Additionally, sustainability upgrades, such as installing solar panels or water recycling systems, are becoming more popular and can increase initial costs but reduce long-term expenses.
Overall, market conditions suggest continued growth in property value, making Samara an attractive destination for both lifestyle and investment purposes.
Why Choose Coldwell Banker Samara
Buying a property in a foreign country can seem daunting, but with the right local partner, the process can be seamless and rewarding. Coldwell Banker Samara offers a level of professionalism, local expertise and client care that sets them apart.
Local Expertise and Market Knowledge:
The team at Coldwell Banker Samara lives and works in the area, giving them in-depth knowledge of local zoning laws, community developments and property values. Their agents guide you through every step, from finding the ideal property to understanding all related costs.
Proven Track Record of Success:
As one of the most trusted real estate offices in the region, Coldwell Banker Samara has successfully helped numerous international buyers secure homes and investment properties in Costa Rica. Their reputation for transparency and reliability has made them a leading choice for expats.
Personalised Strategies and Tailored Support:
Every client is unique, and the team takes time to understand your goals, budget and preferences. Whether you are buying a holiday home, retirement residence or investment property, their approach is customised to your situation.
Comprehensive Guidance from Start to Finish:
Coldwell Banker Samara’s agents coordinate with attorneys, surveyors and local authorities, ensuring each transaction proceeds smoothly. Their hands-on support removes the uncertainty often associated with buying abroad.
Global Brand, Local Service:
As part of the international Coldwell Banker network, they combine global standards and marketing tools with local insight. This provides buyers with both security and convenience.
Transparent Costs and Ongoing Support:
From the initial viewing to final registration, all costs are clearly explained upfront. After purchase, they also assist with property management and local service provider connections, giving buyers complete peace of mind.
Frequently Asked Questions
Can foreigners own property outright in Costa Rica?
Yes. Foreign buyers enjoy the same property rights as Costa Rican citizens. There are no restrictions on owning land or homes in your own name, except for concession properties within 200 metres of the high tide line, which have additional requirements. Coldwell Banker Samara will guide you through the ownership structures best suited to your needs.
Do I need residency to buy property?
No, residency is not required to purchase real estate in Costa Rica. Many buyers acquire property first and later apply for residency if they decide to stay longer. Residency may offer certain tax benefits and simplify other legal processes.
How long does the buying process take?
Most transactions close within six to ten weeks. The timeline depends on due diligence, financing, and registry processing times. Cash purchases tend to close faster, while transactions involving complex titles or financing may take longer.
Are there additional taxes on rental income?
Yes. Rental income is subject to Costa Rican income tax, and in some cases, VAT if rental services are offered. Coldwell Banker Samara can connect you with local accountants to ensure your property is compliant with tax regulations.
What happens if the declared value differs from the sale price?
It is important that the declared value accurately reflects the market value of the property. Under-declaring values to reduce taxes can result in fines or reassessment by authorities. Always consult your attorney to ensure proper documentation.
Can I obtain financing as a foreign buyer?
Some Costa Rican banks offer mortgages to foreigners, but the requirements are often stricter. Most buyers either pay in cash or use financing from their home country. Coldwell Banker Samara can recommend reliable financial institutions that understand foreign buyers’ needs.
Conclusion
Purchasing a property in Samara, Costa Rica, is an exceptional opportunity, offering both lifestyle and investment value. Understanding the associated taxes, legal fees and ongoing costs ensures a smooth transaction and confident long-term ownership.
With its combination of local insight, professionalism and personal support, Coldwell Banker Samara is the ideal partner for foreign buyers. Their experienced team will help you make informed decisions, anticipate all costs and protect your investment at every stage.
Ready to start your journey? Contact Coldwell Banker Samara today for expert advice, property listings and guidance on navigating Costa Rica’s real estate market with confidence.
