If you’re considering purchasing beachfront real estate in Costa Rica, you’ll likely encounter two types of property: titled and concession. Here’s what you need to know about the differences between them and the implications for international buyers.
Titled Property
Titled property in Costa Rica means full ownership of the land. This is the type of property most international buyers are familiar with, where you have complete control over your land. However, titled property makes up only about 5% of all oceanfront land in Costa Rica, making it rare and more expensive to purchase.
Concession Property
Concession property, on the other hand, is essentially a municipal lease. It entitles you to restricted land use for a specific period, which is renewable. While this concept may be unfamiliar to many international buyers, it’s a common and generally safe form of property ownership in Costa Rica. As always, it’s crucial to hire experienced professionals and conduct thorough due diligence before making a purchase.
Concession property allows you to use and enjoy the land for a specified period (usually 20 years) within the public Maritime Zone. Essentially, it operates as a lease. Costa Rican law stipulates that all oceanfront land up to 50 meters inland from the high tide mark is public. The land between 50 to 150 meters inland is concession property.
Here are the PRO and CONS:
Pros of Concession Property
- Greater Inventory: With 95% of oceanfront property being concession, you have more options.
- Lower Prices: Concession property is usually more affordable than titled property, though still valuable due to its beachfront location.
Cons of Concession Property
- Annual Dues: Concession properties come with higher annual taxes and dues.
- Use Restrictions: Municipal regulations dictate what you can build and how you can use the land.
- Residency Requirement: To purchase concession land, you need to have residency for 5+ years or hold the property in a corporation with a maximum of 49% foreign ownership.
- Collateral Limitations: Concession land cannot be used as loan collateral, though this is often a moot point as loans are hard to secure for foreigners.
Pros of Titled Property
- High Value: Titled beachfront property retains and often increases in value, making it a solid investment.
- No Restrictions: You have full control over the property with no municipal restrictions.
- Non-Citizen Ownership: You don’t need to be a citizen or long-term resident to own titled property.
- Lower Taxes: Titled property comes with lower annual taxes compared to concession property.
Cons of Titled Property
- Low Inventory: With only 5% of oceanfront property being titled, finding the perfect property can be challenging.
Conclusion
While concession property is common and well-regulated, titled property remains the preferred choice for its unrestricted ownership and higher value. However, the limited availability of titled beachfront property makes concession property a viable and safe alternative
When deciding between titled and concession property in Costa Rica, it’s essential to consider your long-term goals and consult with experienced professionals to ensure a sound investment. Happy property hunting!