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Under Costa Rica Law, a landowner needs a court
order to evict a squatter from his property. If that squatter has been
there for a year, he has the legal right to stay there indefinitely.
After living continuously there for ten years, he can apply for legal
title. In a recent International Fruit court case, that company has so far
spent $5 million in legal costs for land it bought for $10 million, and
the case is still going on. 1 Dream Getaway will be certain you do not
have such problems when you buy Costa Rica Real Estate through us.
We have had so many
inquiries from clients looking to relocate or buy property here, that we
decided to include this valuable information on Costa Rica in our 1 Dream
Getaway site. You first need to understand that when the Government of
Costa Rica---and most people outside of Costa Rica---speak of Costa Rica,
they are referring to San Jose. The "Central Valley" contains 3/4 of the
country's population like a concentrated, dehydrated drink. All government
services and the little tax money that makes it back out of Government is
spent in San Jose. But the beauty, charm, people and beaches in 1 Dream
Getaway Territory far outweigh the deficiencies in roads, telephone,
government and internet service.
Two years ago a 1 Dream
Getaway client purchased a farm near us, and has turned his $500,000
investment into $5 million. But in those two years, he invested a lot of
time and work. Another client decided to buy a nice condo in a Gringo area
for $120,000. As banks generally do not give mortgages here, the developer
offered his own financing. Being a banker, our client worked for weeks to
get all the fine print from the lender (in California). He explains that
financing is structured to get you easily into your new condo---and even
an attractive rental program to recover your investment (and more).
However the payments seem to be structured so you are hit with a huge
balloon payment after your second year and their profits come from
repossessing and reselling the condos. Were our client not a banker he
likely would have bought and later be faced with a decision as to whether
to make extreme sacrifices to salvage his condo in Costa Rica or let it
go. This is a Gringo trick---not a Tico one.
As much as we complain about
the services in the monopoly of Costa Rica, we are coming to realize that
they may be no worse---or even better than in the US, where everything
costs much, much more. It took us 4 years to get our phone line at 1 Dream
Getaway, and our cell service was iffy. But now the phone and
internet work great. My mother is always having trouble getting
online with AOL, and many calls we receive from clients' cell phones are
broken and garbled. As CR has no extremes in weather, insurance is not a
necessity. In the States, it is required, hard to obtain in some
areas, and ridiculously expensive. Our property taxes are next to
nothing, and people do not live and travel in fear as they do in the US.
There are Tico prices and Gringo prices. This is where we are of great
service.
There exists an animosity between San Jose and Guanacaste, and the people
are quite different. In fact, until about the time of the American Civil
War, Guanacaste was in Nicaragua. Currently the government of Costa Rica
is cutting its own throat by openly demonstrating racism and
discrimination against "foreigners". When business is slow, they send
Transitos (traffic cops) to Gringo neighborhoods to write tickets for not
wearing seatbelts. Prices are different for Gringos than for Ticos.
According to this week's news, they are even cheating Gringos on the money
exchange at the airports. Taxes on bringing your personal belongings here
to live are so exorbitant that it just is not worth it. And so we relate
this to buying property in Costa Rica.
In reading this, please keep in mind that CR government has no concept of
a Grandfather Clause, so conforming to all current laws does not guarantee
you that Costa Rica will not change the laws at some future date, putting
you in violation. We'd like to first advise you to get a good
attorney---but we are not certain that such exists anywhere in the world.
There are different types of properties: beachfront, condominium, untitled
and time-share. Each has its own set of laws, and beachfront properties
often have "Concession Zones" from the municipality. Except for untitled
properties, these titles are recorded in "Folio Real". The Folio Real
number contains location, nature, boundaries, area, liens and survey plan
of the property.
In buying property, you should reconcile your property with the "Escritura"
(title document) and the "Catastro" (filed property plan). Commonly the
Escritura differs from the Catastro, and this can lead to problems. You
should always have a topographical study to verify property boarders
BEFORE buying the property. Property is transferred by having a Notary
(lawyer) execute the Escritura, and a Notary Deed is required before
purchase of your property can be recorded in the Public Registry. Closing
costs are generally shared equally by buyer and seller. They include:
1. IMPUESTO DE TRASPASO (property transfer tax).....1.5% of the property
value
2.TIMBRE MUNICIPAL (Municipal Stamp), TIMBRE DE COLEGIO DE ABOGADOS
(lawyer stamps), TIMBRE AGRARIO (Agricultural Stamp), TIMBRE DEL ARCHIVO
NACIONAL (National Archives Stamp), ESPECIE FISCAL (Fiscal Stamp)
3. The Public Registry tax of .05 % of the value of the property.
4. A Public Notary tax of 1.5% of the first million colonies, and 1.25% of
the rest of the value of the property.
5. Finally, you must present your documents to the local municipality and
pay your property taxes.
Certainly very few Ticos have followed these procedures and paid these
taxes, but the Costa Rica government will be on Gringos like flies on
manure if you do not. When you are ready to build, you may be required to
do an Environmental Impact Study (again, only Gringos) and to buy a
building permit (Policia---again, only Gringos, but thousands of dollars).
In our new 1 Dream getaway facility, we have been visited three times by a
Municipality Executive and an Engineer demanding to see our Permit and
threatening to cease construction if we do not produce it. Yet five Tico
neighbors are building houses without permits, and when we point them out,
the Municipality is not interested. I am a Costa Rica Resident, so the
only difference between me and my neighbors is the color of my skin.
One of the very few private marinas in Costa Rica (Flamingo) was
invaded 46 cops and the Coast Guard. Although the Gringo owners bought
the property many years ago and spent millions developing it, the
Municipality (Santa Cruz) evicted them on the spot, had the boats towed
from the dock (a couple sank), and closed the marina. This is
Concession Property (mentioned above), and you basically lease the land
from the government. Although you will hear that Costa Rica always
renews its Concession leases, this is obviously not true.
On this website, we hope to inform and enlighten. I cannot imagine a place
I would less like to be than San Jose. Yet I would not live anywhere but 1
Dream getaway Territory. Remember that my neighbors and friends are all
Ticos, and they believe that what the Costa Rica government is doing is
wrong. Yet they (as would you) are glad it is someone else they are
picking on. I believe that one day the San Jose government will learn that
when you step on a dog's tail, you should expect to be bitten. As always,
we are here to help you in any way we can.
Note: It is illegal in Costa
Rica for "foreigners" to own property, so if you do not have your
Residency, you will have to form an "Association" (Costa Rica
Corporation...about $400), and have a Tico "employee". In
2007, we again feel the "cheap land" is all gone, but in the years we have
said this, property prices multiply every year. As Guanacaste, Costa Rica
gets 20% of the country's rainfall and has 80% of its construction, you
need to check out the availability and legality of attaining water. If you
move to a Gringo neighborhood, you will have crime problems.
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