Common Mistakes to Avoid When Buying Property in Costa Rica

Buying property in Costa Rica can be an exciting and rewarding experience. The country’s natural beauty, tropical climate, and stable democracy make it one of the most desirable real estate destinations in Latin America.

However, like any international property investment, purchasing real estate in Costa Rica comes with unique challenges. Understanding what to avoid can help you secure a safe, legal, and profitable investment.

1. Not Researching the Location Properly

One of the most common mistakes when buying property in Costa Rica is failing to research the area thoroughly. Every region in Costa Rica has its own lifestyle, weather conditions, and infrastructure. For instance, Tamarindo, Guanacaste, and Nosara are popular beach towns ideal for vacation homes and rental income, while San José and the Central Valley are better suited for long-term living or commercial property.

Before making any decision, visit multiple areas, talk to locals, and understand the property market trends. Look into proximity to schools, hospitals, beaches, and airports. Researching thoroughly helps you find a location that matches your investment goals, whether you’re buying for retirement, rental income, or a second home.

2. Skipping Legal Due Diligence

Foreign buyers often assume the process of buying real estate in Costa Rica is the same as in their home country, but it’s not. One of the biggest mistakes is failing to hire a qualified real estate attorney who specializes in Costa Rican property law.

Your attorney should conduct a full title search (known locally as estudio registral) through the National Registry to confirm ownership, check for liens or encumbrances, and verify the property boundaries. In Costa Rica, every legitimate property must have a folio real number, which records all ownership details.

Avoid relying solely on verbal agreements or unverified documents. Always ensure the property title is clean and that the seller has full legal authority to sell. A reputable attorney will also draft and review your purchase agreement, ensuring it aligns with Costa Rican legal standards.

3. Ignoring Zoning and Permit Regulations

Another major pitfall is neglecting to check zoning regulations and building permits before purchasing land. Costa Rica has strict environmental and construction laws that vary by region. Some areas may fall under protected zones, agricultural restrictions, or maritime laws.

If you’re buying coastal property, pay close attention to the Maritime Zone Law, which states that the first 50 meters from the high-tide line are public property and cannot be purchased or built on. The next 150 meters may require a concession lease, which is different from full ownership.

Before buying, verify that your intended use—whether for residential, commercial, or rental purposes—complies with local zoning laws and municipal regulations.

4. Overlooking Property Inspections

Costa Rica’s lush environment is part of its charm, but it can also hide potential property risks. Skipping a thorough property inspection can lead to costly surprises later. Hire a qualified engineer or home inspector to evaluate the land or structure for issues such as flooding, soil erosion, or foundation damage.

In rural or mountain areas, ensure the property has reliable access to water, electricity, and road infrastructure. Ask for proof of a registered water concession or municipal supply, as this is required for legal construction permits.

5. Underestimating the Total Cost of Ownership

Many foreign investors make the mistake of focusing only on the property’s listing price without factoring in additional costs. Beyond the purchase price, expect to pay closing fees, legal fees, notary costs, property transfer taxes, and title registration fees.

Once you own the property, you’ll also be responsible for property taxes, which are 0.25% of the registered value—relatively low compared to other countries, but still important to budget for. If your property is valued above ₡133 million (approximately USD $250,000), you may also be subject to a luxury home tax.

Also, consider ongoing costs like maintenance, HOA fees, insurance, and property management, especially if you plan to rent it out.

6. Not Understanding Residency and Ownership Rules

A frequent question among buyers is: Can foreigners own property in Costa Rica? Yes, foreigners enjoy the same ownership rights as locals, except for concession land in the maritime zone. However, it’s advisable to buy property under a Costa Rican corporation (Sociedad Anónima or SRL) for easier management, liability protection, and tax benefits.

While owning property doesn’t automatically grant residency, it can support your residency application under the Investor Visa Program, provided your investment meets the required threshold (currently $150,000 USD).

7. Rushing the Purchase Process

Patience is key when buying real estate in Costa Rica. Rushing into a deal without understanding local laws or market trends can lead to mistakes. Take your time to evaluate multiple properties, compare prices, and review legal documents carefully.

It’s also smart to work with a reputable real estate agent who knows the local market and speaks both English and Spanish. Ensure they are part of a verified real estate network like the Costa Rica Global Association of Realtors (CRGAR) or NAR International.

8. Failing to Plan for the Long Term

Whether you’re buying a vacation villa or an investment property, think long term. Consider future resale potential, rental demand, and infrastructure development in the area. The best investments often lie in emerging regions near major tourist destinations or upcoming road projects.

Before you buy, research Costa Rica’s real estate appreciation trends, local tourism growth, and the country’s commitment to sustainable development.

Looking to Buy Property in Costa Rica?

If you’re serious about buying property in Costa Rica, choosing the right partner can make all the difference. Palmyra Properties has been guiding investors, expats, and homeowners for over 20 years, helping them secure dream homes, luxury villas, and profitable real estate investments across Tamarindo, Guanacaste, and the Pacific Coast.

With deep local expertise, a trusted network of legal professionals, and exclusive listings in the country’s most sought-after communities, Palmyra Properties ensures every step of your property purchase is smooth, transparent, and secure.

Start your journey with a team that knows Costa Rica inside and out — from zoning laws and property taxes to market trends and lifestyle needs.

Contact Palmyra Properties today to schedule a free consultation and discover how we can help you.

FAQs

Can foreigners buy property in Costa Rica?
Yes, foreigners can own property in Costa Rica with the same rights as locals, except within the Maritime Zone (first 50 meters from the high tide line).

What are the main mistakes to avoid when buying property in Costa Rica?
Skipping legal checks, ignoring zoning laws, not verifying title ownership, and rushing the buying process are the most common errors to avoid.

How much are property taxes in Costa Rica?
Property taxes in Costa Rica are very low—only 0.25% of the registered property value per year, making ownership affordable for investors.

What legal steps should I take before buying real estate in Costa Rica?
Hire a qualified Costa Rican real estate attorney, perform a title search, check zoning regulations, and confirm utilities and access rights before purchasing.

Is it better to buy property under my name or a corporation in Costa Rica?
Many foreign investors buy property under a Costa Rican corporation (Sociedad Anónima or SRL) for easier management, liability protection, and tax efficiency.

How long does it take to buy property in Costa Rica?
The process typically takes between 30 to 90 days, depending on due diligence, title verification, and legal document preparation.

Final Thoughts

Buying property in Costa Rica offers incredible opportunities, but success depends on preparation and awareness. Avoiding the common pitfalls—such as skipping legal checks, ignoring zoning laws, or rushing the process can save you time, money, and stress.

With proper research, the guidance of qualified professionals, and a clear understanding of Costa Rican real estate laws, you can turn your property purchase into a secure and rewarding investment.