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Costa Rica Beach front property restrictions

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

If the property is 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 and the type of corporation. This process will allow a foreigner to not having to deal with the normal beachfront property restrictions.

Costa Rica Beach front property restrictions

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 tax since May 2012.

Costa Rica Beach front property restrictions

Exceptions for Beach Front Property

The Maritime Zoning Law was not applied retroactively. Any beachfront home, ocean front property or beachfront 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 or “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 with 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 beachfront 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 getting building permits. But larger projects must go through a zoning approval with the government.

Costa Rica Beach front property restrictions

Due diligence

Before you purchase any Costa Rica beachfront property or beach condo make sure to do your due diligence on the legality of the real estate transaction. Then also check on the beachfront 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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