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Costa Rica Beach front property restrictions

More about Costa Rica beachfront restrictionsBefore you buy any Costa Rica beach front real estate, you should learn more about Costa Rica beach front property. There are beach front property restrictions for a Costa Rica real estate concession held by foreigners and the maritime zoning laws of Costa Rica.

If personally held, the foreigner must first have five years of legal residence in Costa Rica. For this reason, many foreigners purchase the rights to beach real estate or ocean front property by first forming a Costa Rican corporation. This is a simple process that takes about 30 days and can cost from $150 to $1,000, depending on the attorney that constitutes it, the type of corporation or if you use a typical shelf corporation. This process will allow a foreigner to not having to deal with the normal beach front property restrictions.

Costa Rica home right on the beach

Costa Rican corporation

Your Costa Rican corporation must have at least fifty percent of its shares held by a Costa Rican resident or citizen. Most people are not comfortable with this. At the time of closing the sale, the “token” Costa Rican shareholder, simply endorses the shares to the foreigner, this way the foreigner is holding 100% of the shares.

This is common practice, but consult your attorney on the specific details including risks associated with this practice, so you can take your precautions before you close on the purchase.

You should also know that every corporation in Costa Rica, no matter is it is an active or an inactive corporation, pays corporation taxes since the 1st of May 2012. [editor: The Costa Rican 4th court has put the corporation tax put on hold until a new law is presented and approved]

Costa Rica beachfront property

Exceptions for Beach Front Property

The Maritime Zoning Law was not applied retroactively. Any beach front home, ocean front property or beach front lot previously titled can be freely transferred. Of course this titled property is very rare. These cases are those involving rights registered in colonial times, and certain urban property on the beach.

Where the 150 meters restricted zone does not have an approved zoning plan (plan regulador), you may find an “arriendo – lease agreement”.

Arriendo

You may occupy and develop the zone after you purchase the rights from the legal occupant. These rights are registered at the corresponding local government or municipality. There is no time limit for arriendos. Not until the land is property zoned (which may never happen!).

A lot of Costa Rica beach front real estate has an arriendo. The arriendo allows transfer of ownership and low impact development. Building a beach house or small tourist project should be no problem but larger projects must go through a zoning approval with the government.

Costa Rica home in the maritime zone

Due diligence

Before you purchase any Costa Rica beach front property or beach condo make sure to do your due diligence on the legality of the real estate transaction and check on the beach front property restrictions. Make an option to purchase – sale agreement subject to being able to close on the property.

If you are looking to purchase property in a certain beach area of Costa Rica, contact us now.


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Ivo Henfling

Ivo Henfling started the American European Real Estate Network Costa Rica in 1996 and has grown it into the largest Costa Rica MLS with thousands of up to date property listings for sale and for rent. Ivo has written hundreds of articles about real estate and living in Costa Rica for The Tico Times and other online informational sites.

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