Is Costa Rica Real Estate a Good Investment?

The Costa Rica real estate market is an immature market place. What I mean is that we are WAY early in the cycle. If you think back to Boston 200 years ago, I suspect that you’d find that there were large parcels of land for sale there. These were bought and subdivided, and little by little it became what we have now, which in some of the “nice” areas of Boston, the houses go right to the property line and all real estate transactions are sales of property with a building on it.

In my years of selling real estate here, I have sold very few built homes. Most of my deals have been raw land, either large parcels that could be developed in any number of ways: subdividing and selling lots, farming, reforestation, commercial ventures such as a golf course or a restaurant, yoga retreat etc…

The large parcels are rare now, and a lot of the subdividing has been done. We are now strongly, into the re-sale of lots phase of the cycle. We are also seeing more houses on the market.

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Costa Rica Corporation Clarity

I think that in every real estate transaction that I have been involved in here in Costa Rica, the buyer has opted to use a Costa Rica corporation to purchase the property. I have explained the pros and cons various ways when asked, but I don’t think that I have ever put it as well as an e-mail that I was just copied on from one of the San Buenas Golf Resort partners. I include it here for the benefit of readers of this blog.

The bottom line is you should always conduct business in CR via a corporation. There are definite tax and liability implications. Canadian residents are lucky…any income earned outside of Canada is not taxed by Canada. The US is different, all income, regardless of where it is earned, is taxed. CR and the US do not have a tax treaty, so you will pay the CR government 30% and the US government 35% if the shares are in your name.

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