Buying a Property in Costa Rica: There are a thousand reasons East Costa loves Rica: from miles of spectacular beaches to back-to-back locals and everything in between. There are mountains, forests, rivers, and lakes, and of course, it is all located east of the serene Caribbean Sea and west of the wild Pacific Ocean.
Costa Rica has plenty of opportunities to land your dream property, and thanks to the already existing vibrant ex-pat communities, plenty available to help you navigate the process to provide you with easy information is.
Like buying a property in your homeland, there is still a lot to think about before you dive into it. Naturally, you will want to arm yourself with as much information as possible before starting your journey and have to consult both a lawyer and an accountant.
However, once you get the basics and you’re well on your way, it starts identifying all the little details that haven’t passed through your mind yet. Here, we take a look at five important points that can slide your mind while searching for properties in Costa Rica.
Buying a Property in Costa Rica:
The weather is going to be very different
Sure, everyone comes for the season. With the promise of year-round tropical temperatures and spectacular sunshine during the dry season, who wouldn’t? Generally, the climate is divided into two different seasons – drought and rain.
However, you should also pay attention to the microclimate of Costa Rica, as the weather pattern can vary greatly from one location to another. For example, mountains will experience more cold temperatures, especially after sunset.
On the other hand, moisture reaches close to rivers and lakes, and there may be a possibility of flooding during the rainy season. Make sure that you do in-depth research on this area and check the microclimate for any properties that interest you.
Access to your property is not possible
Costa Rica is a land of mountains and forests, and while many roads and common infrastructure are good, there are still exceptions to the rule. Then, for properties that are off the beaten path or that are relatively old, double the access conditions before purchasing.
Before you can even think about driving your SUV into your new home, and if the property requires it, it can also be an issue for tradesmen and construction professionals.
Finally, if the access path is on your land, you may be responsible for the repairs yourself and this can often be a costly undertaking.
Costa Rica is very safe, but it is still burnt
Costa Rica is the most protected country in Latin America. Crime is probably the biggest issue, but most of it is limited to small towns. Having said that, when it comes to buying property in Costa Rica, there are still plenty of sharks out there who are ready to make money from naive ancestors to buy in their dreams.
When searching for property, make sure that you use a reliable real estate agent who will help you navigate the process and find your dream property.
You can also benefit from the advice of ex-pats who already call Costa Rica home, helping you avoid known scammers or doozy lawyers and accountants.
Your property services are not guaranteed
The services you take back home may not always be available – especially for older properties, one wants to stay away from the hustle and bustle of busy areas, and people want to build from scratch.
You should always see that electricity, water, and other services exist in the area and can be connected without too much trouble. When you come to connect, anything far away from the property is likely to be expensive.
Of course, there is always an alternative to renewable energy such as solar power, and Costa Rica’s climate is ideal for such setups.
You can get a mortgage in Costa Rica, but it is not easy and it is probably expensive.
When it comes to purchasing a property in Costa Rica, most ex-pats usually finance it in advance, whether in the form of cash savings or a mortgage from home. That being said, it is now possible for foreigners to obtain a mortgage within Costa Rica.
However, it is fair to say that it is more painful than price. Costa Rican banks are greatly traditional when it comes to lending and interest rates are normally very high.
It is usually advisable to explore your financing options in your home country before looking at a mortgage in Costa Rica, but if all else fails, there is still a possibility of getting financing in your new home.
An expatriate living in Costa Rica
People living in Costa Rica are a popular choice among those who once lived in the United States. This article on American expatriate tax livinis g in Costa Rica as an American. Will provide a brief introduction to taxes in Costa Rica from the point of view of local taxes and your tax obligations.
Some of the best and most popular cities to live in Costa Rica (in no particular order) are given below:
- Puerto Viejo
- Grecia
- Atanas
- Escazu
- Ojochal
- Uvita
- Dominical
- Tamarindo
- Jaco
Income and citizenship-based taxation worldwide
The United States is the only country that taxes worldwide income for all its citizens, no matter where they are and no matter how long they have been foreign.
Thus, if you are a US citizen or resident guest, the rules for depositing income, property, and gift tax returns and paying estimated tax are usually the same whether you are in the United States or abroad. This is affectionately recognized as the citizenship-based income tax.
Anywhere in the world, the basic rule is that taxes are based on residency and not citizenship.
Worldwide Taxation
The United States’ taxation of income dates from 1860 when it was enacted as part of the Revenue Act of 1861. Its purpose was to prevent the rich from fleeing to America in times of crisis and to take their money.
Citizenship-based taxation income protection rests on the belief that US citizenship benefits non-residents as well. Thus, foreign taxpayers are required to pay for this benefit, even if they make money elsewhere.
Even as the rest of the world, including Costa Rica, has moved towards a different taxation model, citizenship-based taxation in the United States remains in place. Instead, the debate usually focuses on how much tax should be paid to foreign nationals. This means that your Costa Rica pensions are taxable for the US as well.