You found the property. You negotiated the price. Now comes an important question: How much will it actually cost to complete the purchase? When buying real estate in Costa Rica, the purchase price is only part of the amount you need to plan for. Closing costs cover the legal, tax, registration, and professional services necessary to transfer a property from one owner to another.
Understanding these expenses before making an offer can help you budget accurately, compare properties more effectively, and move toward closing with fewer surprises.
What Are Closing Costs in Costa Rica?
Closing costs are the expenses associated with legally completing a real estate transaction. Unlike the purchase price, which is paid to the seller, closing costs may be paid to the government, National Registry, attorneys, notaries, escrow providers, inspectors, and other professionals involved in the transaction.
There isn’t one flat closing-cost amount that applies to every Costa Rica property purchase. The final total depends on factors such as the property value, how ownership is transferred, the professional services required, and the terms negotiated between the buyer and seller.
This is why buyers should ask for a transaction-specific estimate rather than relying only on a general percentage.
Property Transfer Tax
One of the primary government expenses involved in purchasing real estate in Costa Rica is the property transfer tax.
When ownership of a property changes, the transfer is documented and registered with Costa Rica’s National Registry. The transfer tax is generally calculated based on the value used for the transaction under Costa Rican law.
This expense should be considered early in the buying process because it is one of the significant costs associated with legally transferring ownership.
National Registry Fees and Stamps
A real estate purchase doesn’t end when the buyer and seller sign the documents. The transfer must also be properly recorded with the Registro Nacional, Costa Rica’s National Registry. The registration process involves various fees and required legal stamps. These costs are generally calculated according to the property’s value and the type of transaction being registered. Once the transfer deed has been submitted and properly recorded, the National Registry reflects the change in ownership.
Attorney and Notary Fees
The role of the notary is particularly important in a Costa Rican real estate transaction. In Costa Rica, a Notary Public is a licensed attorney with additional authorization to perform specific legal acts, including preparing and formalizing real estate transfers. The notary prepares the transfer deed, obtains the necessary signatures, and submits the documentation for registration.
Buyers may also hire an attorney to represent their interests throughout the purchase. That attorney can review documents, conduct due diligence, explain contractual obligations, and help identify potential legal issues before closing. Depending on how the transaction is structured, the attorney representing the buyer and the notary handling the transfer may or may not be the same person.
Due Diligence Is Part of the Bigger Picture
Not every expense involved in purchasing property technically falls under “closing costs,” but buyers should still include due diligence expenses in their overall purchasing budget. Before closing, a buyer’s attorney should confirm important information about the property. This can include reviewing registered ownership, liens, mortgages, easements, restrictions, and other matters recorded against the property.
Depending on the property, additional due diligence might include:
- A property survey or review of an existing survey
- Home or building inspections
- Verification of municipal information and property taxes
- Review of permits and construction documentation
- Condominium documentation and HOA obligations
- Water availability and other utility considerations
- Review of zoning or permitted land use
A beachfront home, rural farm, commercial property, and undeveloped parcel of land may require very different levels of investigation. Spending money on appropriate due diligence can be an important part of protecting a much larger investment.
Escrow and International Transfers
International buyers should also consider how funds will move into Costa Rica. Real estate transactions may use a qualified escrow provider to receive and hold funds until the conditions of the transaction have been satisfied. Escrow services can involve additional fees, and buyers should ask about these expenses in advance.
Banks and financial institutions may also charge wire-transfer or intermediary-bank fees when transferring money internationally. Buyers should be prepared to provide documentation regarding the source of funds. Costa Rica’s financial institutions and escrow providers have compliance requirements designed to verify where transaction funds originate. Preparing these documents early can help prevent unnecessary delays as closing approaches.
Buying a Property vs. Buying a Corporation
Some Costa Rican properties are held in corporations. This can create another question during a transaction: Will the real estate itself be transferred, or will ownership of the corporation holding the property change? These are not necessarily the same type of transaction and can have different legal, tax, due diligence, and cost considerations.
A corporation should never be assumed to be the simpler or less expensive option solely because it already owns the property. An attorney should review the corporation, its records, obligations, assets, liabilities, and standing before a buyer agrees to acquire it. The appropriate structure depends on the individual property and transaction.
Who Pays Closing Costs?
Buyers often ask whether the buyer or seller is responsible for closing costs. The answer depends partly on the purchase agreement and how the transaction is negotiated. Certain costs may traditionally be assigned or shared in a particular way, but the final agreement between the parties matters. This is one reason the closing-cost discussion should happen before signing the purchase agreement, not a few days before closing. Your attorney should be able to explain which costs you are responsible for, which expenses belong to the seller, and whether any costs are being divided between the parties.
Don’t Forget Ongoing Property Expenses
Closing costs are one-time transaction expenses, but buyers should also look beyond closing day. Depending on the property, ongoing ownership costs may include annual property taxes, condominium or HOA fees, utilities, insurance, property management, maintenance, and other expenses.
Certain higher-value properties may also be subject to Costa Rica’s luxury home tax when they meet the applicable criteria. These aren’t closing costs, but understanding them before purchasing provides a much more realistic picture of what it will cost to own the property.
Get the Numbers Before You Make the Decision
Closing costs shouldn’t be an afterthought. Before committing to a property, ask your attorney or notary for an estimated breakdown of the taxes, professional fees, registration expenses, and other costs expected for that particular transaction. If you’re comparing several properties, these additional expenses can also become part of your decision-making process.
At REMAX Pura Vida, our goal is to help buyers understand the process from the beginning of their property search through closing. We can help you navigate the steps involved and connect you with qualified Costa Rican professionals who can provide the legal and financial guidance specific to your purchase.
Ready to explore property in Costa Rica? Browse REMAX Pura Vida listings and start your search with a better understanding of what comes after you find the right property. Contact a local expert at REMAX Pura Vida.