For those interested in a profitable venture or a peaceful retreat, Costa Rica’s beachfront properties
offer an exceptional investment opportunity. However, purchasing land on the coast comes with
certain challenges and legal particularities that must be thoroughly understood to make an informed decision.
Guided by the expertise of real estate law expert and Facio & Cañas Law Firm Managing Partner
Sergio Solera Lacayo, Luxury Living Costa Rica l Forbes Global Properties proudly offer this meticulously crafted guide to the 8 essential factors for purchasing beachfront property:
1. Private Property or Concession: Verify the Land Status
Over 90% of beachfront properties in Costa Rica belong to the State and are typically managed by the respective municipality. Building and using these lands requires a concession contract, which
operates similarly to a lease agreement. As a result, only a small percentage of beachfront lands
are titled as private property, making it essential to thoroughly verify land status. If it’s a concession, ensure the records are to avoid future problems during the renewal process. If it is private property, check that all requirements have been met to hold a valid title. “In these cases, we conduct all due diligence, as we would with any other property, but we also go further by tracing the property’s origin.
We verify that the requirements were met according to a provision from a law enacted in 1970, which is essentially the only way to title these properties correctly,” commented Sergio Solera. If the titling process wasn’t strictly followed, the Attorney General’s Office could initiate a title nullification process, reverting the land to the State- and note there is no applicable statute of limitations. In such cases, a concession request would need to be initiated, which entails a slow process requiring a regulatory plan in the area which does not exist in many places. If the property of interest already has a concession at the time of purchase, it is also advisable to have legal guidance to verify the procedures involved and anticipate any obstacles that may arise when the concession’s term expires and renewal is required. “In these cases, the file should be reviewed in the Municipality to check for inspections, compliance with the zoning plan, or any administrative procedures. Once the contract is endorsed (typically by the Tourism Board), it must then be registered in the National Registry. Having the right experts is crucial to successfully navigate the process and ensure all concession procedures are met, especially for renewal,” added Solera.
2. Maritime Zone Regulations
In Costa Rica, the Maritime Zone (ZMT in Spanish) consists of two sections: the public area and the restricted zone. The public area covers the first 50 meters from the high tide line and is open to the public so this space cannot be granted in concession or titled. The restricted zone comprises the next 150 meters where a concession may be granted or where private property may exist.
3. Regulatory Plan and Land Use Permission
Before purchasing an untitled beachfront land, verify if the respective Municipality has a regulatory plan.
This plan is essential for obtaining a concession and determining the land’s potential uses such as
residential, commercial or hotel purposes. Without a regulatory plan, the concession process becomes more complicated and may take years. “In these transactions, it’s important to consider the land’s intended use in relation to the regulatory plan. For example, a 100% residential plan won’t allow hotel construction. That’s why expert guidance is crucial to navigate these aspects,” added Solera. Experts advise caution with concessions, avoiding unauthorized construction and complying with environmental laws as violations may lead to termination of the concession contract by the authorities.
4. Tax Payments or Fees
Tax payments vary based on property type. If the land is titled, the owner must pay property tax (legally set at 0.25% of the fiscal value). If it’s a concession, a fee must be paid to the Municipality, ranging usually from 1% to 4% of the fiscal value depending on the concession’s authorized use (residential, commercial, or tourist).
5. Water Supply Permit: Ensure Legal Access
Regardless of whether the land is a concession or titled, it is essential that the property has access to a legal water source. Water cannot be obtained from a spring or private well without State permits which must be verified before purchase to avoid future issues.
6. Beachfront or Ocean-View Properties with Existing Structures: Comprehensive Inspection If you’re considering a beachfront property or one with ocean views that already has
structures built, it’s recommended to hire a civil engineer for a thorough review of existing structures. Soil studies and boundary verification by a surveyor are also necessary to ensure compliance.
7. Ownership Structure for Acquiring the Property For asset protection and liability purposes, it is recommended to acquire the property under a company. This structure also facilitates certain procedures and may offer tax and estate planning advantages.
8. Papagayo Zone Specifics and Investment Residency The Papagayo zone has a special
concession and regulatory regime different from the rest of the country. If interested in a property in this area, consult a real estate lawyer familiar with these regulations. Additionally, for investments of at least $150,000, foreign investors may qualify for residency as an investor which eases the residency process in Costa Rica.
Final Recommendations
Buying property on a Costa Rican beach can be complex due to legal restrictions and administrative processes.
However, with the assistance of Luxury Living Costa Rica l Forbes Global Properties as well as expert legal advice, it is possible to make an informed, safe purchase and enjoy your beachfront property with peace of mind.
If you are interested in purchasing a beachfront property, feel free to consult our luxury team here.
Jeannina Fonseca González
Journalist
In collaboration with Facio & Cañas
