While real estate an be purchased by individuals or corporate entities in Costa Rica, purchasing property through Individuals can own one or multiple properties under a holding company. The legal entities in Costa Rica are either a Sociedad Anomina (S.A.) or a Sociedad Responsabilidad Limitada (SRC), which is similar to an LLC.
You can also purchase property in the name of your retirement fund or the corporation that represents it such as an IRA or 401K.company is a popular option for foreigner buyers. There are many advantages to housing your property under a corporate entity. It protects both privacy as well as assets and is a preferred way to hold the property for both foreigners as well as native Costa Ricans. Its sole purpose is to serve as a holding company for real estate titles and does not have any other function.
Here are four reasons to purchase property through a corporate entity:
- Liability
By having the company held in a corporation you cannot be personally sued or held liable for accidents involving tenants, guests or employees on the property. This provision is especially useful to protect yourself if you are planning to rent the property out and use it as a source of income.
- Capital Gains Tax
When you purchase a property through a corporation, you do not have to pay a capital gains tax. If the property value increases and you decide to sell, you don’t have to pay capital gains tax, real estate transfer taxes or recording fees.
- Privacy
A property bought and held under a corporate entity provides an added measure of security keeping your personal life and finances private. It provides a level of protection from intrusion into personal and business affairs.
- Wealth Protection
If you have a spouse or children, you would like to have inherited the property, putting the property in a holding company is strongly recommended. Through a corporation,
the transfer of ownership can easily be done through shares without the usual hassles of title transfer. By having the property title under a holding company the transfer of title can be simplified. A Costa Rica attorney can you walk you through setting up the company to minimize taxation in the event of your death.
Purchasing Costa Rica properties through a corporation is the preferred strategy for most foreign buyers for the reasons outlined above. Of course, consult with an attorney to find out if this approach is the best option for your particular situation.
ABOUT US
Exclusive Homes Costa Rica is a full-service real estate company that helps buyers and sellers acquire and retail property. Exclusive Homes is locally owned and operated by Shawn Ferguson and Dennis Lara and offers experience and expertise at development and management of residential vacation properties, as well as commercial, office, and mixed-use developments in Costa Rica.
The owners and brokers of Exclusive Homes Costa Rica have worked years to put together a network of professionals both in Costa Rica and Internationally. Highlighted by the fact they are connected both nationally and internationally with realtor.org, and are members of the real estate associations who act as Costa Rica’s governing bodies for real estate professionals.
Our mission is to provide exemplary service in a professional environment to achieve the real estate goals of our clients and partners. We quickly adapt to the diversity of individual investors, markets and homeowners through sound leadership, unparalleled industry expertise and our unwavering commitment to service
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