Purchasing property in Costa Rica is an exciting endeavor, but it’s crucial to be aware of the various closing costs involved to ensure a smooth transaction. While we’re not attorneys or CPAs, we can provide a general overview of the typical costs you might encounter. Here’s a breakdown of what to expect in terms of closing costs when buying real estate in Costa Rica:
1. Property Transfer Taxes and Stamps
When transferring property ownership in Costa Rica, several taxes and stamps come into play:
A. Transfer Tax:** This is a flat rate of 1.5% of the property’s sale price. It’s a standard fee applied to all real estate transactions in the country.
B. National Registry Stamp:** This stamp costs 0.5% of the property’s value and is necessary for registering the new ownership in the national registry.
C. Documentary Stamps:** These include several types of stamps that vary in cost:
– Agrarian Stamp:** ¢1,000 per million colones of the property’s value.
– Fiscal Stamp:** C625 (approx. ¢625).
– National Archives Stamp:** C20 (approx. ¢20).
– Bar Association Stamp:** C5,000 (approx. ¢5,000).
– Municipal Stamp:** ¢2,000 per million colones of the property’s value.
2. Notary Fees
In Costa Rica, notaries play a significant role in property transactions, and their fees are regulated by the Colegio de Abogados de Costa Rica. The notary fees are tiered based on the property value:
– Up to 10,000,000 Colones:** 2% of the property value.
– On the next 5,000,000 Colones:** 1.5% of this portion.
– On the next 15,000,000 Colones:** 1.25% of this portion.
– On the remaining balance:** 1% of this portion.
Additionally, all services, including notary fees, are subject to a 13% Value Added Tax (VAT), which is not included in the abovementioned percentages.
3. Escrow Fees
Escrow fees are another essential component of closing costs. While these fees can vary based on the escrow company and the transaction specifics, they generally cover the cost of holding and managing the funds until all conditions of the sale are met.
Final Thoughts
Navigating closing costs in Costa Rica’s real estate market can seem daunting, but understanding these fees will help you budget effectively and avoid surprises. It’s always wise to consult with local attorneys or CPAs to get precise estimates and ensure all legal and financial aspects are appropriately handled.
We are your real estate experts, not lawyers or accountants. Our team can direct you to the appropriate professions.
