Property Transfer Costs in Costa Rica

When purchasing property in Costa Rica, the sale price is not the only amount that must be considered. Taxes, stamps, registration fees, and notary fees must also be paid to register the property in the buyer's name.

These payments are commonly known as property transfer costs and may represent a significant part of the purchase budget.

Before signing a purchase option agreement or paying any money, it is advisable to request an estimate of the transaction's total cost.

What are property transfer costs?

They are the payments required to formalize a sale through a public deed and register the change of ownership with Costa Rica's National Registry.

The main costs normally include:

• - Real estate transfer tax.
• - National Registry stamps and registration fees.
• - Notary public fees.
• - Value-added tax on professional fees.
• - Other costs related to certifications, studies, or procedures.

1. Real estate transfer tax

One of the main expenses is the real estate transfer tax.

As a general rule, this tax is equivalent to 1.5% of the taxable base used for the transaction.

For example, if the transfer is calculated on a value of ₡50,000,000, the approximate tax would be:

This calculation covers only the transfer tax. Stamps, registration fees, and notary fees must still be added.

2. Stamps and registration fees

Different stamps and fees must be paid to submit and register the deed with the National Registry.

Charges that may form part of a sale include:

• - National Registry fees.
• - Municipal stamp.
• - Agrarian stamp.
• - Tax stamp.
• - Costa Rican Bar Association stamp.
• - Other applicable stamps or charges depending on the transaction.

The total of these items depends on the property's value and the particular characteristics of the deed.

3. Notary public fees

A property sale must be formalized through a public deed authorized by a notary public.

Notary fees are calculated using a tiered fee schedule. This means that a single percentage is not necessarily applied to the property's entire value.

As the value of the transaction increases, different portions of the amount may be calculated using different percentages.

The notary may also charge separately for other work when necessary, such as:

• - A registry study of the property.
• - Preparation of a purchase option agreement.
• - Cancellation or creation of a mortgage.
• - Correction of registry defects.
• - Sworn statements or additional documents.
• - Special procedures involving companies.

4. VAT on professional fees

Professional services provided by the notary are subject to value-added tax.

VAT is calculated on the professional fees, and not necessarily on all taxes and stamps that form part of the transfer.

For this reason, an estimate will normally show one line for notary fees and a separate line for the corresponding VAT.

5. Other possible costs

Depending on the property and the way the sale is completed, other expenses may arise that are not part of the basic transfer.

Examples include:

• - Literal certification of the property.
• - Registry study and review of liens.
• - Cadastral survey plan or land survey.
• - Property appraisal.
• - Building inspection.
• - Municipal certifications.
• - Cancellation of mortgages or annotations.
• - Creation of a new bank mortgage.
• - Administrative fees charged by a financial institution.
• - Fees related to money transfers.

When the purchase is financed, the costs of establishing the mortgage usually must be calculated separately.

Which value is used to calculate the costs?

One of the most common mistakes is assuming that all costs will automatically be calculated using the price shown in the property listing.

The calculation base may consider information such as:

• - The price agreed upon by the buyer and seller.
• - The amount stated in the deed.
• - The property's tax value.
• - The value registered with the municipality.
• - The value assigned to the act or contract.

The notary must review the registry and tax information to determine the appropriate calculation base in each case.

Who pays the property transfer costs?

In many Costa Rican property sales, the buyer and seller traditionally divide the transfer costs equally.

However, this may vary according to the agreement between the parties. It is also possible for:

• - The buyer to pay all costs, which occurs in most transactions.
• - The seller to pay all costs.
• - The costs to be divided using different percentages.
• - Each party to pay specific items.

The distribution should be negotiated and clearly stated in the purchase option agreement or other document used to formalize the arrangement.

How much does it cost approximately?

There is no single percentage that applies to every property. The final amount depends on the calculation base, notary fees, applicable stamps, and any additional procedures.

As a general reference, the total cost of a straightforward sale usually represents several percentage points of the transaction value.

However, a general estimate should not replace a quotation prepared for the specific property.

Example of costs with and without a mortgage

For a more concrete example, assume a property is purchased for ₡50,000,000.

We will compare two scenarios:

• Purchase without a mortgage: the buyer pays for the property without obtaining a mortgage loan.
• Purchase with a mortgage: the buyer creates a bank mortgage for ₡45,000,000.

In this example, creating a mortgage for ₡45,000,000 adds approximately ₡737,125 to the transaction costs.

The results are approximate and assume that the transfer's taxable base is ₡50,000,000. If the tax value or the value stated in the deed is higher, taxes, stamps, and fees may also increase.

What should you request before signing?

Before signing the purchase deed, request:

• - A detailed estimate of the costs.
• - The full name of the responsible notary.
• - The calculation base used.
• - An itemized breakdown of taxes, stamps, professional fees, and VAT.
• - An explanation of any additional expense.
• - A written agreement stating who will pay each item.

It is also advisable to verify that the property is current on municipal taxes, utilities, and other applicable obligations.

Calculate the property transfer costs

To obtain a more precise estimate of the taxes, professional fees, stamps, and other expenses related to buying a property, use our property transfer cost calculator.

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The information in this article is general and educational. Percentages, rates, taxable bases, and fee schedules may vary according to the characteristics of the transaction and the rules in force. The final calculation must be prepared or confirmed by a Costa Rican notary public.