Zoning laws in Costa Rica Explained: Titled vs. Concession Land

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If you are a foreigner looking to buy real estate property in Costa Rica it is important you know that the Political Constitution protects private property and foreigners and nationals can enjoy the same rights in terms of acquiring and owning real estate property with just a couple of restrictions.

Considering that most foreigners that want to invest in property in Costa Rica are looking to buy beach front property it is important that you are clear on what the Maritime Zone is and what concession property means.

The maritime land zones are those properties on locations facing maritime coasts, and it includes islands, mangroves, estuaries, and natural rock formations that overcome the level of the ocean the maritime land zone is the first 200 meters from the ordinary high tide and heading inland; this area is owned by the government, and has a public and a restricted area. The land located in public areas, which comprises the first 50-meter-wide belt between the ordinary high tide and the areas exposed during low tide are not available for ownership of any kind.

The other 150 meters of maritime land zones may be subject to concession rights for a limited, although extendable, period of time. The municipalities are the entities in charge of granting concessions, which are subject to royalty payment to the municipality and the Costa Rica Tourism Board.

This is where one of the restrictions mentioned before come into place regarding foreigners investing in real estate property. A concession cannot be granted to a foreigner that has not resided in the country for a period of at least five years; in the even the foreigner has resided in Costa Rica for five years or more, then there is a chance that he or she is permitted majority ownership of a property. Deloitte Company explains this in its Investor’s Guide 2017 in detail :

Concessions cannot be granted to (a) foreign nationals who have not resided in the country for a period of at least five years; (b) corporations (S.A.’s) with bearer shares; (c) corporations domiciled abroad; (d) entities formed in the country by foreign nationals; or (e) to those entities whose stock, capital quotas or capital stock are owned by foreign nationals in a proportion of over 50%. Additionally, only physical individuals and companies that are qualified to hold concession rights (see above) may participate in tourism developments on the maritime-land zone or in locations with access thereto. Similarly, foreign entities may participate therein provided they are tourism companies whose capital investment toward the development is owned by Costa Ricans in a proportion of over 50%”.

In other words, foreigners with less than 5-years residing in the country can own only up to 49% of a concession.

Concession land is very valuable, and therefore it usually pays higher taxes and are subject to a series of restrictions which makes this land difficult to develop and heavily regulated.

Titled property, on the other hand, is probably the most common form of real estate investing in Costa Rica, since it is pretty straight forward. The seller should be able to provide all necessary information and with the help of an attorney you can review the details of the property and get additional information from the public registry and the municipality. It is important that you verify the property you are acquiring is free of any mortgages, leans, etc. Confirm the measurements and boundaries. It is also necessary to check the restrictions it may have, if it is located near a river or a protected area for example, this could limit your possibilities of developing the property, the municipality can also give the information on the use of soil, (what the property can be used for), if the property has a water connection already or you’ll need to request it, etc.

If what you are looking for is a vacation home in Costa Rica, titled property is the best way to go. Make sure to get a reputable real estate agent and a real estate attorney that can guide you through the process and help you get the property you want at an affordable price.
There are many beautiful residential projects in different beach communities that are affordable and a great investment. Bellazo by Kalia Living in Nosara, Guanacaste is just one great example. For competent real estate attorneys, see Axioma Legal law firm in San Jose.

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