Biggest Mistakes Foreigners Make When Buying Property in Costa Rica

When buying property in Costa Rica as a foreigner, several common mistakes can lead to costly problems or delays. Understanding these pitfalls and taking proactive steps can help ensure a smooth and secure transaction. Here are the biggest mistakes foreigners make when purchasing real estate in Costa Rica, along with essential tips to avoid them:

1. Failing to Conduct Thorough Due Diligence on the Title

One of the most critical errors is not verifying that the property has a clean and transferable title. Costa Rica’s property system requires checking two key records: the property’s registration at the National Registry and the cadastral survey (plano catastrado) which shows exact boundaries and measurements. Discrepancies between physical boundaries and official records are common, so relying solely on the seller’s word or visible landmarks is risky. A qualified real estate attorney should review these documents to confirm there are no liens, encumbrances, or zoning issues that could affect ownership.

2. Not Hiring a Trustworthy Lawyer and Realtor

Many foreigners underestimate the importance of hiring a reliable lawyer who specializes in Costa Rican real estate. Only a licensed Notary Public who is also an attorney can legally draft and record the property transfer deed. Your lawyer should represent your interests exclusively, conduct due diligence, verify documents, and ensure the transaction follows a proper timeline. Similarly, real estate agents in Costa Rica typically work for the seller, so their advice should be cross-checked with independent experts to avoid conflicts of interest.

3. Overlooking Utilities and Infrastructure

Before purchasing, verify that essential utilities such as water, electricity, and internet are available and functioning. In rural or undeveloped areas, utilities may be limited or absent. Understanding how easy or difficult it will be to connect to these services is crucial. For example, electricity is generally provided by ICE or regional suppliers, and water may come from municipal sources or local cooperatives. Some properties rely on septic systems instead of municipal sewage, which should be inspected. Utility costs and service reliability vary between urban and rural locations, so factor this into your decision.

4. Skipping Property Inspections

Costa Rica’s climate can cause structural issues like water damage, mold, or wear and tear, especially in coastal or rural properties. Skipping a professional property inspection can result in unexpected repair costs. Inspections should include checking the septic system, roof, foundation, and overall condition to avoid surprises after purchase.

5. Ignoring Zoning and Land Use Regulations

Each municipality in Costa Rica has zoning plans regulating property use, density, and construction limits. Failing to confirm the zoning status (uso de suelo) can lead to restrictions on how you can use or develop your property. Your lawyer should obtain and review this information from local authorities to ensure your intended use complies with regulations.

6. Relying on Verbal Agreements or Incomplete Information

Avoid trusting verbal promises or overly edited photos in listings. Always visit the property in person, preferably during different times of the day at different seasons, to assess access, climate, and condition. Also, do not rely solely on sellers or informal local contacts for information about the property or transaction process.

How to Avoid These Mistakes

• Hire a qualified Costa Rican real estate attorney who will perform title searches, verify zoning, draft contracts, and record the deed. Check their reputation and referrals are key.

• Work with a reputable buyer’s agent or realtor who represents your interests and helps navigate the market.

• Conduct a professional property inspection to uncover any structural or utility issues.

• Verify availability and ease of connection for utilities like water, electricity, and internet before buying.

• Review the property’s cadastral map and official boundaries to avoid disputes.

• Visit the property multiple times during different seasons to understand access and environmental factors.

• Ensure all steps follow a clear timeline to avoid delays and complications.

Following these guidelines will help you avoid the most common pitfalls foreigners face when buying property in Costa Rica and make your investment safer and more enjoyable.

For expert assistance and trusted real estate services in Costa Rica, visit www.cabuayrealty.com. Their experienced team can guide you through every step of the process, ensuring due diligence and a smooth transaction.

Finding the Right Real Estate Agent in Costa Rica

Why Values and Expertise Matter

Buying property in Costa Rica—especially in sought-after areas like the Nicoya Peninsula—is an exciting but complex process. While market knowledge and legal expertise are essential, the right real estate agent should also share your values and understand your unique needs as a foreign buyer. Here’s why alignment in personality and professionalism is just as critical as their credentials.

1. Shared Values Create Trust and Better Outcomes

A real estate agent who aligns with your priorities—whether sustainability, community, or investment goals—can better tailor their search to your vision. For example:

• If you value eco-friendly living, an agent familiar with solar-powered properties or sustainable developments in Nosara or Santa Teresa will save time.

• If cultural integration matters, an agent who understands expat challenges (language barriers, residency processes) can provide smoother transitions.

• A transparent communicator ensures you avoid misunderstandings about property titles, fees, or zoning laws.

Personality fit reduces stress—especially when navigating unfamiliar legal systems or remote transactions.

2. Legal Expertise + Foreign Buyer Insight = Fewer Risks

Costa Rica’s real estate laws are foreigner-friendly but have nuances:

• Maritime Zone restrictions (only Costa Ricans or long-term residents can own within 200m of the coast; foreigners lease instead).

• Title verification is critical—unregistered agents may miss liens or ownership disputes.

• Corporate ownership (common for foreigners) has tax and estate-planning implications.

An agent who combines legal compliance (SUGEF registration, residency status) with experience assisting foreigners ensures you avoid pitfalls like fraudulent titles or concession land scams.

3. The Right Agent Solves Unique Challenges

Foreign buyers often face hurdles an average agent might overlook:

• Financing: Local banks rarely lend to non-residents; cash or international loans are typical.

• Due diligence: Checking for squatters’ rights, water access, or road easements requires local savvy.

• Cultural gaps: Negotiation styles, bureaucracy, and even property measurements (hectares vs. acres) vary.

Agents who’ve guided expats through these steps provide practical support beyond the sale, like recommending lawyers or property managers.

How to Vet for Alignment

• Ask targeted questions: "How have you helped buyers with my priorities?" or "Explain a complex deal you navigated for a foreign client.".

• Check references: Prior clients can reveal responsiveness and integrity.

• Assess transparency: Do they clarify fees, timelines, and potential risks upfront?

Final Insight

In Costa Rica’s decentralized market, a skilled agent is your greatest ally—but only if they understand both the legal landscape and your personal goals. Whether you seek a jungle retreat, a beachfront lease, or a rental investment, prioritize expertise with empathy to turn your vision into a secure reality.

Tip: Start with agents who specialize in your target area (e.g., Nicoya Peninsula) and verify their experience first.

Can Foreigners Buy Property in Costa Rica?

What International Buyers Need to Know before they buy.

Costa Rica’s breathtaking landscapes and welcoming culture have made it a magnet for international property buyers. If you’re considering real estate in Cabuya, Santa Teresa, Montezuma, or anywhere on the Nicoya Peninsula, understanding the rules for foreign ownership and the benefits of the Inversionista (Investor) Residency Program is essential.

Equal Rights for Foreign Buyers

Foreigners enjoy the same property ownership rights as Costa Rican citizens. You can purchase titled property outright in your own name or through a corporation, with no requirement for residency or citizenship. This makes purchasing property in Cabuya, Santa Teresa, Montezuma, or elsewhere on the Nicoya Peninsula straightforward and secure.

Titled vs. Concession Land

Titled Land:
Most inland and some select coastal properties are titled, meaning you own the land outright. This is the most secure form of ownership and is highly sought after by both locals and foreigners.

Concession Land:
Properties within the Maritime Zone (the first 200 meters from the high tide line) are concession land. Here, the first 50 meters are public, and the next 150 meters can be leased (not owned) for up to 20 years, renewable. Foreigners can only own up to 49% of a concession property unless they have resided in Costa Rica for at least five years. These properties are subject to additional regulations and taxes, so due diligence is crucial.

The Inversionista (Investor) Residency Program

Costa Rica offers a clear path to residency for foreign investors through the Inversionista program. If you invest at least $150,000 USD in real estate, shares, or a Costa Rican business, you can apply for temporary residency. Here’s how it works:

• Minimum Investment: $150,000 USD in real estate, a business, or other approved assets.

• Residency Benefits: Temporary residency for two years, renewable as long as you maintain the investment. After three years, you can apply for permanent residency.

• Family Inclusion: Your spouse and dependent children can be included in your residency application.

• Path to Citizenship: After seven years of legal residency, you may apply for citizenship.

• Additional Perks: Residency holders can import household goods and a vehicle duty-free, and enjoy access to Costa Rica’s healthcare system.

Note: Inversionista residents cannot work as employees in Costa Rica but can earn income from their investments or work remotely for foreign companies.

Final Tips

• Work with a reputable local real estate agent and attorney to ensure a smooth, legal transaction.

• Understand the difference between titled and concession land, especially for beachfront properties.

• Consider the Inversionista program if you plan to invest $150,000 or more, as it offers significant residency and lifestyle benefits.

Costa Rica’s property laws, combined with the natural beauty of Cabuya, Santa Teresa, Montezuma, and the Nicoya Peninsula, make it an ideal destination for your next real estate investment.