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There are different types of property available to buyers, which can be purchased through personal capacity or through a corporation, regardless of the buyer's nationality (with the exception of concessions in shoreline zone, further detailed in this chapter).
This section describes the different types of property that can be purchased in Costa Rica and some aspects about each of them to take into account by the potential buyer.
- Fee Simple. This is the most comprehensive method of property ownership in Costa Rica. The procedures and conditions applied to this method are the same for foreigners as they are for local residents. The Simple Fee ownership gives the buyer the absolute right to materially own, use, lease and sell the property at his/her convenience, subject only to certain conditions specified under Costa Rican laws.
- Shoreline Zone Concessions. Beachfront parcels are known as concession property. A concession is the right to use and enjoy a specific parcel located on the shoreline for a pre-determined period of time, according to the dispositions of the Zoning Master Plan (Plan Regulador).
95% of the beachfront land is regulated by the Shoreline Zone Law #6043 and by special requirements that may be imposed by local municipalities or by the Costa Rican Board of Tourism (ICT). All regulations determine the conditions under which both foreigners and local residents can lease concession property.
The Costa Rican government grants a concession through the local municipality after a private agreement established between the concessionaire and the municipality, which is later recorded in the National Registry. This agreement establishes a yearly concession fee that is determined by an appraisal carried out by the Tax Collection Office (Oficina de Tributacion Directa).
Costa Rican shoreline has an extension of 200 meters inland (approx. 600 feet). It begins at the main high tide mark. The 200 meter zone is owned by the government, and it cannot be owned by any individual or company. It is divided in two sections:
- The first section extends for approximately 150 feet and it is known as public zone. This area is not available for any kind of ownership. Only developments approved by governmental entities are allowed on the public zone, such as marinas.
- The remaining 450 feet, approximately, can be occupied or leased by companies or individuals with a concession that can be obtained from two entities:
- From the corresponding municipality, when the land is available for residential or commercial use;
- From the Ministry of Environment and Energy (MINAE), when land is environmentally sensitive or has low density.
Concessions are usually granted for periods that may range between 5 and 20 years, at government's discretion. Concessions are usually granted for 20 years. During this period, the concessionaire pays a fixed fee for leasing that parcel. Concession renewal is negotiated directly with the governmental entity that grants it initially. Renewals are based on the concessionaire's ability to duly assume all requirements and obligations stated in the initial concession agreement. These obligations may include construction, subdivision, developments or improvements on the land, for which the concessionaire will need the appropriate permits from the local municipality.
Foreigners do not enjoy the same rights for concessions as local residents do. The law states that foreigners cannot be majority holders of concession land. However, a foreigner can establish a partnership with a Costa Rican citizen having him/her as the majority holder of the land. The only exception to this restriction applies to foreigners that have resided in Costa Rica for at least five years. Yet, every case is revised and carried out individually.
- Condominiums. There is a specific law in Costa Rica called Condominium Property Law that provides a framework for development in different types of properties, including single family residence projects, finished lot projects, vertical and horizontal property condos, among other options. This law allows a developer to regulate and control certain aspects of the process. Each condominium development has its own by-laws which have specific conditions, restrictions and regulations that apply to the owners of the project.
Condominium property ownership is fee simple, yet it usually includes additional restrictions set forth by the developer, such as architectural guidelines, land use restrictions and other limitations that may be placed on each segregated parcel. Condominium laws are designed mostly to protect the integrity of a development and maintain its physical appeal.
- Zoning. Before a concession or a management plan is processed, the corresponding government authority determines the zoning or use of the soil of the property in question. The property is usually divided in different areas for specific purposes that fit each parcel best. Nevertheless, changes in the use of each parcel may be implemented, as long as the respective authority grants them.
In order to adjust to zoning regulations, a series of requirements must be met, which include,
- Preparation of Master Plan. If the property is within shoreline zone, the master plan must conform to soil-use standards imposed by the municipality, and its approval will depend on a shoreline-land concession agreement granted previously.
- Design and recording of surveys for land subdivision, both of the main lot and the segregated parcels.
- Approval of Master Plan by the Board of Architects and Engineers, the Ministry of Health, and the Costa Rican Urban Development Office, which may require an environmental impact study before approval.
- Construction Agreement established with a contractor. The agreement must include negotiation and warranty, inspection reports and other related matters.
- Other agreements, like a Condominium Declaration, CC & R's Management, Homeowners' Association, Rental Pool, Fractional Ownership, may apply during this process.
- Sale closing. Depending on the type of ownership and tax structures, the closing may require different ownership agreements, introduction of holding companies or title transfers to be made.
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