Costa Rica is a land of opportunity for real estate investors, business owners, and other entrepreneurs. When buying property or starting a business in the country, you may come across something called concession property. Although it can sound intimidating, it’s actually quite simple to understand what concession property is and how it works. Let’s take a look at this unique type of Costa Rican real estate.
What is Concession Property?
Concession property is any piece of land on which the government has granted an individual or company the right to use it for some prescribed purpose such as developing a hotel or building a home. This right is known as a “concession” and typically lasts for 20 years with the option of being renewed after that period. The owner of the concession retains all rights to the property but does not own it outright; instead, they are given exclusive rights to use it for whatever purpose was agreed upon between them and the government.
The main benefit of owning or investing in concession property is that you don’t have to worry about making lease payments or dealing with other similar issues when it comes time to renew your contract with the government. Additionally, since you are responsible for maintaining your own development, you won’t have to pay taxes on any improvements you make while using the land. Finally, because your rights are protected by law, there’s no need to worry about anyone taking away your rights or otherwise infringing upon them without due process.
The Drawbacks of Concession Property Although there are many benefits associated with owning concession property in Costa Rica, there can also be drawbacks depending on your situation and goals. For instance, if you plan on selling your development within 20 years—the length of most concessions—you may face difficulty finding buyers due to their uncertainty regarding whether or not their rights will be renewed after that period expires. Furthermore, if someone else begins developing their own project nearby yours without permission from the government, they could potentially infringe upon your rights as well. Therefore, it’s important that you consider all potential problems before committing to purchasing concession property in Costa Rica.
Understanding what concession properties are and how they work can help investors make more informed decisions when buying real estate in Costa Rica. Although there are some potential drawbacks associated with this type of ownership structure, there are also many benefits such as tax breaks and guaranteed renewal periods that make owning concession properties an attractive option for many individuals looking to invest in Costa Rica’s real estate market. It’s important to weigh all options carefully before making any major decisions but overall concessions can be a great choice for those looking for long-term investments with stable returns over time.
