Buying a house in Costa Rica: the two hundred metres, the five years, and 1.5 percent

Buying in Costa Rica is for a foreigner as free as for a Costa Rican, and that is exactly where it goes wrong on the coast: the freedom applies to titled property, and the beach never is that.

The two hundred metres

Article 9 of the coastal law of 1977 lays down the zona marítimo terrestre: a strip two hundred metres wide along both coasts, measured from the ordinary high-water line. Article 10 divides it in two. The first fifty metres are the public zone: everyone's and no one's, not to be owned, not to be built on. The next hundred and fifty metres are the restricted zone: state land the municipality gives in concession, for a term, against an annual fee.

And then article 47: no concession to a foreigner who hasn't lived in the country five years yet, and none to a company whose shares or capital are more than half foreign. What you see on the coast as "beachfront for sale" is therefore either a concession you have no right to as a newcomer, or a construction through a company the law declares invalid, or — and that is the good variant — titled property behind the two hundred metres.

Titled, or not

Outside the coastal zone you buy in your own name, and the property sits in the Registro Nacional under a number of its own. So the first question with every home is whether it is titled and what the registry says: owner, mortgages, attachments, easements. A lawyer reads that in a day. Take a lawyer of your own, because the notary in Costa Rica is a lawyer who executes the deed and works for both parties.

Mind the difference with "derecho de posesión": possession without title, sold as if it were property and financed by no bank. What isn't in the registry, you don't buy.

What it costs

The buyer pays the transfer tax of 1.5 percent, on the higher of the purchase price and the fiscal value — the Ministry of Finance explains the rate and the basis in its own manual. On top the registry stamps and the notary, who charges by tariff. All together between three and six percent, and the bank rarely comes into it: Costa Rican banks rarely finance foreigners and at rates a Dutch person doesn't know, so almost everyone buys with their own money.

The twenty percent discount on the transfer tax from the law of 2021 belonged to the benefits that could only be applied for in the first five years of that law; those ended on 14 July 2026. Whoever buys now pays the full 1.5 percent.

Every year after that you pay the municipality a small property tax and — above a threshold — the national tax on luxury homes. And on sale Costa Rica taxes the gain at 15 percent; for property from before July 2019 the seller may once opt for 2.25 percent on the sale price.

And the Netherlands

With property the Dutch tax needs no treaty to know what it does: immovable property in the Netherlands is always taxed in the Netherlands, also if you live in Costa Rica. A house in Costa Rica is Costa Rican income as soon as you let it, and Costa Rican gain as soon as you sell it — and that is exactly the income Costa Rica does tax. See the article on AOW, pension and tax for the whole sum.