Understanding the different costs involved when buying properties in Costa Rica is important. Before starting the buying process, being financially prepared is the smartest decision. Each expense, no matter how small, can add to the final cost. To the total cost of the property, some other variables must be added that depend on things such as the place where the house is located, percentage of financing, legal representation expenses, and others.

Here is everything you need to know about the costs of buying properties in Costa Rica:

Buying properties in Costa Rica is an excellent investment. The market is quite stable, with reasonable prices and areas with constant urban growth. However, the real estate buying process is complex, especially if you are buying a property for the first time. It starts from the moment you decide to invest in a home until you officially become the owner, which can take several weeks or even months.

Some of the extra expenses (in addition to the price of the property) to take into account when investing are the following.

Title Transfer

The seller is the one who transfers the property to the buyer by means of a public notary deed. This lawyer, chosen by the parties, is in charge of verifying the documents, authenticating them and finally to register the transaction in the National Registry.

The attorney’s fees vary according to the chosen person, but according to the law, the costs for these services range between 1% and 1.25% of the total cost of the real estate transaction.

In general, the costs of buying properties in Costa Rica are the buyer’s duty, in exchange for certain benefits, such as a reduction in the total price of the property for example. However, there is also the possibility that legal expenses and tax costs are divided equally between the parties.

Government Taxes and Fees

This section includes the tax on real estate transactions of 3%, registration fee of 0.5% and documentary stamps with an approximate of 0.55%.

Municipal taxes vary depending on where the property is located. It is best to inform yourself correctly about the costs and expenses that may derive from it, since those are monthly payments.

Checking with the corresponding Municipality before buying properties in Costa Rica, can clarify the real costs that may become after the process is done.

Mortgage

In case you need a mortgage to finance your home, it is important that you take into account the extra expenses. The tax rate depends on the financial institution with which you decide to contract.

A mortgage can be created simultaneously at the time of sale or independently. However, every mortgage registration process carries the costs of preparing the document by a notary (usually 1.25% of the total amount of the mortgage) in addition to the starting amount.

Additional Expenses

Depending on the property that you decide to buy, there may be extra costs or expenses. Some of them can be:

Property appraisals
Minor remodels
Major remodels

Sometimes you must invest in extra remodeling, either for aesthetics or necessity. You can negotiate with the seller if they will do the renovations in exchange for a price reduction or do them separately once the property is purchased.

Am I ready to buy a house? 8 questions to help you decide

Before making the decision to buy properties in Costa Rica, it is important that you consult the professionals to have an estimate of costs. Based on the appraisal of your property you will know if the sale price is correct. Buying properties that need to be remodeled is a good investment as long as it is done correctly.

If it is your first time buying real estate, it is best to inform yourself as much as possible before making any decision so you do not find yourself in trouble at the end of the process. Consulting a real estate agent can help you with all the questions that arise during the different stages of the buying process.

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