Restrictions on Property Ownership and Use
Both Foreigners and Costa Rican nationals enjoy equal rights under the law when it comes to land and property ownership, unless the owner bought the land as part of a government program. In such circumstances, the
Both Foreigners and Costa Rican nationals enjoy equal rights under the law when it comes to land and property ownership, unless the owner bought the land as part of a government program. In such circumstances, the land can only be traded or sold to foreigners once the original owner has owned it for a specified period of time. Foreigners are not required to live in Costa Rica in order to own property.
In Costa Rica, although generally there are no restrictions on owning Real Estate or property as previously mentioned, there could be some restrictions on the actual use of property. The use will depend on the area and zoning plan that the current area has. This can be either, agricultural, industrial, commercial, residential or a maritime concession.
Rural areas like San Ramon, Alajuela, for instance, could be subject to agricultural zoning use. This means that the parcels must be at least 5000 square meters and will have a maximum coverage area of 10% of the total area of the property. This means that you cannot build an structure that exceeds 10% of the footprint of the lot. Additionally, the house to be built cannot exceed 300 square meters of area (According to article 32 of Subdivision and Urbanization Regulations).
Of course, these restrictions apply only to agricultural lots of land, but to determine if the property is subject to this, or any restrictions, it is crucial to perform a Due Diligence process. Below you’ll find additional restrictions on properties, that you may encounter in Costa Rican Real Estate.
Industrial and Commercial properties
Industrial property restrictions are related mainly to what you are able to build or do on your property, mainly associated to the high density areas of the country.
These properties seek to develop predominantly trade and service activities to businesses and individuals, such as wholesale and retail trade of various kinds, financial services, repair and maintenance services, professional services (legal, medical, engineering, architectural, economic-accounting and consulting in general); personal services (hairdressing, photography, tailoring, insurance, laundry, funeral services, etc.), food and beverage services, hotels and trade in general, tourism services, recreational services and entertainment, etc., technical services, refractory services, administrative services, computer services, etc.
These commerce and industry zones are planned as urban groups; while hotels are permitted, you will not be granted building permits or building approval for a family house, as this is not the natural idea of this type of zoning area.
Due to a lack of planning by Costa Rican authorities, districts such as downtown San José, can have residences and businesses merging and even neighboring each other, however true factories will not collide with residential zones.
A concession is defined in Costa Rica as the right to use a certain portion of land located on the coastline zone, for a predetermined amount of time and based on a predetermined zoning. This right is granted by the government through a private agreement between the concessionaire and the associated municipality, which is then recorded in the Public Registry.
Costa Rica’s coastal zone is 200 meters deep, beginning at high tide and moving inland. The 200-meter zone is owned by the government; no individual or company can own it. The coastline zone is further subdivided into two land strips.
The first strip, known as the “public zone,” is 50 meters (about 150 feet) broad. This zone is completely open to the public and is not for sale. Except for those structures authorized by government entities, no development is permitted (i.e. marinas). Furthermore, because this location is considered public, it is open to the public. Costa Rican hospitality businesses are known for creative ways to circumvent this rule (looking at you, Punta Leona!).
The subsequent 150 meters may be occupied or leased by individuals or businesses. This is accomplished by a concession with the relevant municipality (in case of residential and commercially exploitable portions of land).
It is critical to understand that concessionaires must meet one of the following requirements:
- Be Costa Rican residents for a minimum of five years.
- Costa Rican nationals
- Alternatively, Costa Rican corporations with at least 50% Costa Rican ownership are acceptable.
Condominium or Residential
Traditionally, the term “condominium” refers to apartment complexes and townhouses. However, in Costa Rica, there is a statute known as “Condominium Property Law” that offers a framework for the development of various types of properties, such as single-family house projects, finished lot projects, and vertical and horizontal property condos, among others.
This law gives a developer the authority to limit and regulate some components of the development. Each condominium development has its own set of bylaws that outline all of the rules, restrictions, and regulations that apply to owners in that development.
Condominium property ownership is a simple one, but it usually comes with various extra restrictions imposed by the developer, such as design rules, land use restrictions, and other restrictions assigned on the CC&Rs.
Whatever the question is, we at Outlier Legal are ready to help and assist you achieve your dreams in Costa Rica! Contact us and our expert team will assist you with your property purchase.