Owning Property In Costa Rica

Land Records For Property Ownership

Costa Rica boasts a safe form of title registration to protect buyers from hidden claims. In many ways, the Costa Rican system of maintaining property records is far superior to systems in use by more developed countries such as the United States. All documents are centered in the National Registry, where both titles and surveys are recorded.

Records are kept in a central computer system as well as on microfilm, and in original form. Duplicates of all records are updated daily, and sent to two separate fireproof vaults in separate locations from the registry. Any change in the status of a title, or any claim that might affect it, must also be noted on the title registry page, thus making it easy to verify.

Those who purchase land in Costa Rica should get professional advice, which includes a search of the title in the Registry, so as to confirm there are no liens or encumbrances on it, and to establish its proper ownership. Once the transaction is completed, the purchaser should receive documents to prove the sale was registered in the Registry.

Property Taxes

The yearly taxes on properties in Costa Rica are very low. Yearly property taxes based on 0.0025% of the declared value of the property. This declared value is a common law practice in which a property's value according to the government is very low, almost always lower than the sales price.

Property Insurance

Home insurance is easily obtained. Costa Rica has only one insurance company, the INS (Instituto Nacional de Seguros - National Insurance Institute), a mixed enterprise with majority government ownership. Only INS is allowed to sell insurance in Costa Rica. If you can get insurance from abroad that will cover your Costa Rica real estate assets, it is a plus. INS sells insurance directly at its various offices, or you can buy it from a registered agent. It will cost the same, but a responsible agent is preferable, as you will get advice and help with the red tape if, along the line, you have to file a claim.

There are certain things you should know:

- The value of the items being insured is determined by the applicant, using Actual Cash Value (depreciated value). INS does not have appraisers.

- Insured values and premiums are in Colones, not in dollars. Because of Costa Rica's annual 16-18% currency devaluation against the US dollar, it is best to periodically revise your policy.

- All policies have deductibles which in most cases are fixed by INS. There are few policy options. Deductibles average 20% per claim on most policies.

- Insurance binders do not exist: formal applications have to be completed and signed, and in most cases the item must be inspected and the premium paid before insurance becomes effective.

- INS is one of the largest and most solid insurance companies in Central America. It reinsures a large percentage of the risk internationally.

Types of policies available:

A) Homeowner's Fire And Natural Disaster Policy - Can cover the house, the house plus contents, or the contents alone, against the following:

Coverage "A" (Basic Coverage) - Fire and Lightening

Coverage "B" - Winds, Hurricanes, Cyclones, Falling Objects, Explosions, Smoke, etc.

Coverage "C" - Floods, Landslides

Coverage "D" - Quakes, Tremors, Volcanoes

The rate ate is 0.2436% per year for ABCD based on the estimated cost of rebuilding. The value of the land does not enter the picture. In other words, insurance for a house worth $100,000 would cost $243.60 per year.

B) Home Theft Insurance - This covers only instances of forcible entry and covers the list of ALL items in the house EXCEPT cash, jewelry and securities which cannot be insured. INS usually accepts the risk for works of art, collectors' items, antiques, etc. but this is not automatic. Theft premiums average 1% per year of the total specified on the list of insured items. The exact premium you pay depends on the features and location of the home. It may take a month or more to get theft insurance coverage operable.

C) Home Owner's Liability - This covers the amount awarded by Costa Rican courts for incidents taking place within the confines of the house. As Costa Rica is not a litigious country, this insurance is not important for the average householder.

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