We are a real estate company, so treat what follows accordingly: this article argues against a category of transaction we could profit from. We do it because cleaning up these situations is worse for everyone than preventing them.
Here are the six failures that recur.
1. Title that is not what it appears to be
Costa Rica has a functioning National Registry, and properly titled property is secure. The problem is that not everything offered for sale is properly titled. Possession rights, untitled land and properties with unresolved historical claims all circulate. A registry search by an independent attorney — yours, not the seller — is non-negotiable and inexpensive relative to what it prevents.
2. The maritime zone trap
The Zona Marítimo Terrestre covers the first 200 metres from the high tide line. The first 50 metres is public and cannot be built on or owned by anyone. The remaining 150 metres is concession land — leased from the municipality, not owned — and majority concession holding generally requires five years of residency. People buy beachfront believing they hold title when they hold a concession with conditions attached, and sometimes not even that.
3. Water that does not exist
A building lot without a water letter — confirmation from the local water authority or ASADA that a connection will be provided — may be unbuildable. This is the single most common expensive surprise on rural and coastal lots. Sellers are not always forthcoming, and a beautiful lot with no water availability is worth a fraction of what it appears to be.
4. Access that is not legally guaranteed
Driving to a property does not establish that you have a legal right of way. Access across neighbouring land without a registered easement can be withdrawn. Verify access in the registry, not from the car.
5. Buying the photograph rather than the place
The listing does not convey the road in October, the noise from the bar two hundred metres away, the fact that the view is over a lot that is about to be developed, or that the drive to a hospital is two and a half hours. This is the entire argument for spending a season in an area before buying in it.
6. Structure decided by whoever was in the room
Whether to hold personally or through a Costa Rican corporation has real consequences for succession, transfer and reporting. Neither is universally right. What is universally wrong is deciding it at closing because the seller attorney suggested it.
What proper diligence involves
Independent legal representation, a registry title search, survey verification, water and electricity availability letters, confirmation of registered access, municipal zoning and permit checks, and confirmation that property taxes and any corporation fees are current. Budget 4–5.5% in total closing costs, with transfer tax at 1.5%. Annual property tax is 0.25% and luxury-home tax applies above roughly $214,000, sliding to about 0.55%.
The diligence timeline, step by step
Buyers frequently ask how long proper diligence takes. For a straightforward titled property with an engaged attorney, a few weeks. The steps run roughly in this order, and skipping any of them is where the failures come from.
First, engage your own attorney — not the seller, not the one the agent recommends without alternatives. Second, a National Registry search confirming title, ownership, boundaries, liens, mortgages and any annotations. Third, survey verification confirming the physical property matches the registered plano. Fourth, utility availability — the water letter above all, plus electricity and, where relevant, sewage or septic viability. Fifth, registered access confirming a legal right of way rather than a road you drove down. Sixth, municipal checks on zoning, permits and whether existing construction was legally permitted. Seventh, confirmation that property taxes, municipal fees and any corporation obligations are current.
Only then, closing — with funds handled through an escrow arrangement rather than transferred directly on trust.
Two failures specific to new construction
Pre-construction and new-build purchases carry risks that resale properties do not, and they deserve their own mention because the marketing is usually most aggressive here.
Completion risk. Deposits paid against a development that stalls are extremely difficult to recover. The relevant diligence is on the developer — what have they completed, on what timeline, and can you speak to buyers from those projects.
The permit question. Construction requires permits, and buildings erected without them create problems that transfer to the buyer. Verify that what exists, or what is planned, is properly permitted rather than assuming a developer has handled it.
If a purchase is intended to qualify for investor residency, completion timing matters doubly — an incomplete purchase is a considerably weaker position than a registered one, and the reduced $150,000 threshold window closes 14 July 2026.
What good representation looks like
An attorney working for you should be willing to tell you not to buy something. That is close to the whole test. If every property is fine and every question receives reassurance, you are receiving sales support rather than legal advice.
You should receive written findings rather than verbal comfort, an explanation of the ownership structure options and their consequences rather than a default, and clarity on exactly what is and is not being verified. Fees for this work are modest relative to the transaction and trivial relative to the failures they prevent.
Questions buyers ask
Can foreigners own property in Costa Rica?
Yes, on the same legal terms as citizens, with no residency requirement — outside the restricted maritime zone, which has its own rules.
Do I need my own attorney if the seller has one?
Yes. The seller attorney represents the seller. In Costa Rica a notary can act for a transaction, but independent representation for your side is the point.
Is buying remotely ever acceptable?
It happens successfully when the buyer knows the area well from prior time there and has independent local representation conducting full diligence. Buying an area you have never visited, on photographs, is where the failures cluster.
Does buying property get me residency?
Not automatically, but a qualifying purchase of $150,000 or more is the usual way people satisfy the investor category. The purchase and the application are separate processes needing correct sequencing — and the reduced threshold window closes 14 July 2026.
What is a water letter and why does it matter so much?
It is written confirmation from the local water authority or ASADA that a connection will be provided to the property. Without one, a building lot may be unbuildable — which is the most common expensive surprise on rural and coastal land.
Should I use escrow?
Yes. Established escrow services are standard in Costa Rican transactions and protect both parties. Direct transfers of purchase funds on trust are an avoidable risk.
Can I get a mortgage as a foreigner?
Financing is available but generally on less favourable terms than US or Canadian buyers expect — higher rates, larger deposits, shorter terms. Most foreign purchases are cash, which is worth factoring into planning.
Where to go from here
If any of this is landing close to home, the useful next step is not a brochure — it is a conversation about your actual numbers, your timeline and your family situation. Our team at Golden Visa Costa Rica walks through residency routes, property options and the practical sequencing with people in exactly this position every week. Book a private consultation and we will tell you honestly whether Costa Rica fits — or whether it does not.
This article is for general information only and is not legal, immigration, tax or investment advice. Rules change and individual circumstances differ; consult a qualified Costa Rican attorney and your own tax adviser before acting.