The closing costs on Costa Rica real estate property transfers are usually shared 50/50 between buyer and seller unless negotiated differently. This makes the closing costs a negotiable part of the offer process. The exact amount and allocation of closing costs may vary depending on the terms of the sale but typically range from 4% to 6% of the real estate purchase price. Here’s a rundown of the key costs usually involved in buying and selling real estate in Costa Rica:
1. TRANSFER TAX AND REGISTRATION STAMPS :
There are two major expenses when buying titled property: transfer tax and registration stamps. Both of them are calculated on a percentage basis using the highest value between the purchase price and the fiscal value (this is the property value recorded by the National Registry). The rule is for these expenses along with the fees to be split by the parties.
Transfer tax is a tax paid by the Buyer at the time of closing and is calculated using the highest value between the purchase price and the fiscal value as explained above. The transfer tax rate on real estate transfers is 1.5%. At closing, the notary public retains this tax and pays it to the tax authorities.
Registration stamps are taxes associated with registering the sale of the real estate property with the National Registry of Costa Rica. The notary must pay on your behalf a registration fee of approximately (0.85%) for a combination of stamps distributed to different entities.
Please see the example below of a purchase valued at US$100,000.00 :
| Tax stamps | $1.00 |
| Archive stamps | $0.04 |
| Attorney Bar stamps | $27.00 |
| National Registry stamps | $507.11 (0.5%) |
| Municipal stamps | $203.00 (0.2%) |
| Agrarian stamps | $152.13 (0.15%) |
| TOTAL | $890.28 |
| Transfer Tax | $1,500.00 (1.5%) |
| TOTAL TAXES AND STAMPS | $2,390.28 |
2. LEGAL FEES:
The Buyer and Seller will typically have legal representation during the transaction and be responsible for paying their legal costs. These fees can vary depending on the complexity of the real estate transaction. Typically attorney fees amount to 1.5% of the first $2,000 (one million colones) and 1.25% of the remaining sale price.
3. ESCROW FEES :
The average cost of an escrow fee is 0.25% of the purchase price of the home. That means, if you’re looking at a home with a sales price of $750,000, the escrow fees may cost around $1875. The escrow officer may also charge a flat fee for its services.
4. NOTARY FEES:
A notary public is required to oversee and certify the transfer of ownership of the property. The costs for the notary’s services are typically split between the Buyer and Seller but it can be agreed otherwise. When the market is strong Seller’s will push for Buyer to pay one hundred percent of closing costs.
5. PROPERTY TAXES AND CONDO FEES:
The Seller is responsible for paying any outstanding property taxes and condo fees owed on the property up to the date of the sale.
Property taxes are calculated at a rate of 0.25% of the value recorded for the property at the Municipality.
Condo fees are calculated and prorated according to a budget approved by each homeowner’s association in a condominium.
6. MORTGAGE FEES :
In Costa Rica, the borrower is required to pay all mortgage drafting and registration fees. A mortgage may be issued at the time of sale by adding a mortgage registration draft to the transfer deed. This type of mortgage registration costs are assessed at approximately 0.5% of the amount of the mortgage. An additional 1.25% of the mortgage amount is due in notary fees.
7. REALTOR COMMISSIONS :
As per Costa Rican law, real estate commissions may range from 3-10% of a property sale price. The usual percentage in Guanacaste is 6% (plus 13% VAT) and is usually shared between the buyer´s and the seller´s agent.
In Conclusion
There are numerous ways to invest in luxury properties in Costa Rica’s expanding real estate market. Regardless of where you are in the process, it is the responsibility as an experienced Costa Rican realtor, to accompany you and ensure that you comprehend the steps necessary to safeguard your investment and guarantee its profitability. Find comprehensive information on the real estate buying process in my blog post here.
This Guide has been written and updated in partnership with Gonzalo Rojas B. from Quatro Legal, our legal partner for all real estate transactions in Costa Rica.
Frequently Asked Questions
What are the closing costs when buying property in Costa Rica?
Closing costs in Costa Rica typically range from 4% to 6% of the purchase price and are usually split 50/50 between buyer and seller unless negotiated otherwise. They include transfer tax (1.5%), registration stamps (0.85%), legal fees (1.25-1.5%), escrow fees (0.25%), and notary fees.
Who pays closing costs in Costa Rica — buyer or seller?
Closing costs are typically split 50/50 between buyer and seller. However, this is negotiable. In a strong seller’s market, sellers may push for the buyer to pay 100% of closing costs. It is always part of the offer negotiation process.
What is the property transfer tax in Costa Rica?
The transfer tax in Costa Rica is 1.5% of the highest value between the purchase price and the fiscal value registered at the National Registry. It is paid by the buyer at closing and collected by the notary public who pays it directly to the tax authorities.
What are typical legal fees when buying property in Costa Rica?
Attorney fees in Costa Rica are typically 1.5% of the first $2,000 (one million colones) and 1.25% of the remaining sale price. Both buyer and seller typically have their own legal representation and pay their own legal costs.
What is the realtor commission in Costa Rica?
By Costa Rican law, real estate commissions can range from 3% to 10% of the sale price. The standard commission in Guanacaste is 6% plus 13% VAT, though it varies depending on the property type and the agent’s experience.
Do I need a notary to buy property in Costa Rica?
Yes. A notary public is required by law to oversee and certify the transfer of property ownership in Costa Rica. Notary fees are typically split between buyer and seller but can be negotiated otherwise. The notary also handles the payment of transfer tax and registration stamps on behalf of the parties.