Costa Rica Real Estate Magazine

JULY-SEPTEMBER 2023. COSTA RICA REAL ESTATE MAGAZINE FREE ISSUE SINCE 1998

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WE BROUGHT THE TUNA BACK TO COSTA RICA... NOW WE WANT TO IMPROVE MANAGEMENT FOR SAILFISH

Through public and private partnerships, we support responsible fishing practices to create jobs, policies and awareness through integrated marine biology, satellite data, economic and conservation science to educate, advocate and influence local and international policies. For more information about our current campaigns and events visit www.fecop.org Supporting Sport Fishing Through Science, Education, and Conservation

The Costa Rican Governments´ strategy for the period of 2023 – 2026 • The new strategy focuses on a comprehensive approach to investment and exports.

On June 15, 2023, the Ministry of Foreign Trade (COMEX) and the Promoter of Foreign Trade of Costa Rica (PROCOMER) presented the new strategy to attract Foreign Direct Investment (FDI) to Costa Rica, which consists of a four-year policy and strategy that seeks, among other things, the generation of 100 thousand jobs and the attraction of 70 investment projects in areas outside of the Greater Metropolitan Area (GAM). Likewise, the institutions aspire that the amount of investment in these four years can reach US$12,950 million, encompassing 300 reinvestment projects, 200 new projects, 24 projects under the DESCUBRE platform, 8 thousand jobs outside the GAM, 70 projects coming from new geographies and 12 thousand people employed through training programs human talent. “We are pleased to present this ambitious FDI attraction model. With the strategy that we launched today, we seek to generate well-being in all regions of the country with a very

tax incentives, and an excellent geographic location. However, as a country we face some urgent challenges that must be addressed, such as unemployment, the territorial gap, the shortage of talent and the concentration of sectors. “Our aim is to generate well being for the entire country. For this reason and to address these challenges, we propose a differentiated strategy to attract FDI based on an integral focus on the investment and exports, so that there are linkages, the generation of employment and the transfer of knowledge”, commented Beirute.

clear goal: promote, attract, and retain investments that boost employment and exports of the country with a solid, differentiated, and coherent value proposition taking into account the needs of Costa Rica, the geopolitical reality and global trends," said the Minister of Foreign Trade, Manuel Tovar Rivera. For his part, Pedro Beirute Prada, General Manager of PROCOMER, added that Costa Rica has a robust value proposition for investors thanks to aspect differentiators such as sustainability, political stability, legal certainty, talented human resources, country reputation, commercial platform,

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• Attraction of new FDI in sectors: consolidated, incipient, and new. • Establishment and after care: accompaniment and advice on soft-landing, supplier management, alliances with actors in the FDI ecosystem, new incentives, reinvestments and the elimination of obstacles and/ or bottlenecks to investment. • Special programs: outside of GAM, human talent, clusters, and linkages. These three axes will work with competitiveness and sustainability in a transversal way. Likewise, the strategy proposes addressing eight priorities: • Attract new foreign direct investment. • Generate employment, linkages and economic growth throughout the country. • Develop new strategic sectors to attract FDI to the definitive The lines of action of the strategy presented by PROCOMER are:

regime and free zones. • Diversify countries of origin of the investment. • Improve the investment climate to boost competitiveness. • Generate employment and linkages outside the GAM. • Contribute to the development of human talent. • Promote FDI with a social and environmental return. The Manager added that the institution's strategy seeks to address the diversification through new investment models, serving consolidated sectors as well as new ones, attracting investment in free zones and in the definitive regime, as well as encourage new investment models such as project portfolio, Joint Ventures, mergers, and acquisitions, Brownfield and BOT (build operate-transfer). All this hand in hand with a strategy of competitiveness through the resolution of bottlenecks and articulation between the public sector, private sector and academia, areas in which PROCOMER has extensive experience. To develop this work, PROCOMER has the experience of more than PROCOMER

25 years in the administration of the free zone regime - thus established in the Law of its creation - a network of 26 trade promotion and investment offices with extensive knowledge and international trajectory and that will be strengthened in new markets. It also has 7 regional offices that know first-hand the needs of the different areas outside the GAM, as well as a new Investment Directorate, from which the strategy and the established priorities will be addressed. PROCOMER's FDI strategy was carried out by a team of local experts and organizations in international trade and investment and was submitted to the analysis of the Board of the Institution during multiple work sessions. On June 5th, 2023, the plan was unanimously approved by the Board of Directors.

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MORE THAN TWO DECADES WE PROVIDE SOLUTIONS AND CARRY OUT ALL YOUR CONSTRUCTION PROCEDURES

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Contenido | Contents 02 PROCOMER - STRATEGY TO ATTRACT INVESTMENTS

PUBLISHER Suyen Arvizú Steven León EDITOR Hernán Carazo B.

08 COSTA RICA CENTRAL VALLEY (GAM) 10 AFFORDABLE DENTISTRY IN COSTA RICA 12 COSTA RICA INVESTMENT TIPS 14 COSTA RICA RESIDENCY REQUIREMENTS 16 DISCOVER THE BEAUTY OF PEREZ ZELEDÓN

VICE PRESIDENT Cid Carazo Arvizú DESIGN DIRECTOR Yendry Rodríguez María Fonseca

18 BUYING PROPERTY IN COSTA RICA 20 COST OF LIVING IN COSTA RICA 22 MEDICAL TOURISM TO COSTA RICA 24 MAKE YOUR VACATION HOME PAY FOR ITSELF 26 CAPITAL GAINS TAX IN COSTA RICA 28 DISCOVER THE CENTRAL PACIFIC COAST 38 MARINAS IN COSTA RICA 40 MAKE THE BEST OF YOUR COSTA RICAN FISHING VACATION 42 DISCOVER THE SOUTH PACIFIC COAST 48 DUE DILIGENCE PROCESS IN A REAL ESTATE PURCHASE

COVER PHOTO Kevin Champagne

MARKETING AND SALES Patricia Smith Samantha Arias CONTRIBUTOR Tim Fenton - Blue Zone Realty tim@bluezonerealty.com www.bluezonerealty.com

Contact Information: Cel: (506) 8799-7062 Tel: (506) 4419-0778

sales@costaricarealestate magazine.com WWW.COSTARICAREALESTATE 0$*$=,1( &20

Costa Rica Real Estate Magazine

52 HAPPIEST COUNTRY IN LATIN AMERICA 70 DISCOVER THE NORTH PACIFIC COAST 72 THE NEW PENSIONADO LAW

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Experienced and authorized Escrow Agent. Approved by “SUGEF” on November 2007 for the administration of third-party funds under the rules and procedures established before the General Superintendence of Financial Entities. Such authorization is only in matters of prevention of Money Laundering, financing of terrorism and financing the proliferation of weapons of mass destruction, as provided in the Law 7786. SUGEF does not supervise the business offered and carried out by the company or its security, stability or solvency, the people who contract the products and services do it under their own responsibility.

ARTICLE | REAL ESTATE Costa Rica’s Central Valley

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T he Central Valley of Costa Rica, also known as the GAM (Greater Metropolitan Area) is made up of San Jose, Costa Rica´s capital city and the provincial capital cities of Heredia, Alajuela and Cartago along with their respective surrounding smaller cities and towns. The GAM offers many advantages such as a year-round temperate climate for the most part. Heredia and Cartago tend to be cooler and Alajuela warmer than San Jose. In addition to a great climate most of the population lives in this area which in turn means that the amplest variety of amenities, cultural and entertainment offerings, shops, restaurants and all manner of activities are available. Also, some of the best Medical and Dental care in the country can be found here. On the West side we have the areas of La Sabana (location of Costa Rica´s mini-clone of NY´s Central Park), Rohrmoser, Escazu, Bello Horizonte and the Santa Ana-Lindora area. This is where the largest concentration of high end homes and private schools can be found as well as the largest Mall in the Country, the Escazu Multiplaza Mall. Continuing past Santa Ana on Highway 27, you can veer off to the right and go visit Ciudad Colón, a cute small town with some high end residentials with great views. Just a little further is the World-famous University for Peace. If you don´t veer to the right but instead continue onward on the highway you will pass exits for La Garita, which has many Quintas (large residential estates) and an endless choice of nurseries. Further on you find exits that can take you to Grecia, Sarchi and Naranjo, three semi-rural colorful towns which offer a great option for living and are growing in popularity with expats.

Continue the highway and you will pass an exit for Atenas, another quiet small town that is a favorite for expats to live in. San Jose lies at an altitude of just over 3,750 feet above sea level which contributes to its year-round springlike weather. It offers a blend of new and old and is basically a small town that grew in all directions as its population growth increased. There are not that many tall buildings in general although in the upscale Rohrmoser-Nunciatura area several have sprung up in the last decade. In the center of town, you will find historical buildings like the Central Post Office and the National Theater as well as the recently remodeled Hotel Costa Rica. You can also find several museums including the very interesting Gold and Numismatic Museum housed in a unique architectural gem built underground. Several parks also dot the landscape and an interesting place to visit is the Mercado Central, a market under roof founded in the 1860´s which occupies a square block and has a large variety of items on sale as well as many small sodas (small restaurants) where you can have a tasty and inexpensive lunch. From San Jose you can head to the Central Pacific Beaches and reach the closest ones, Herradura and Jaco beaches, via the highway 27 toll road in under 90 minutes. From there you can continue South and reach the beautiful beaches of Manuel Antonio Quepos and another 45 minutes further South are the beaches of Dominical, Uvita, Ballena and Ojochal where the jungle and mountains reach the sea. Continue further South and you will reach the Osa Peninsula, described by National Geographic as the place with the most biological intensity per square foot on the Planet!

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The team at Prisma dental works together in a very professional manner while cutting out so much unnecessary time that I’ve seen wasted by not having all the resources in one facility. Needless to say, I was extremely impressed by the work the team was able to do in such a short time. Josef, Telma, Nadine and the rest of the Team are absolutely amazing! They a the friendliest family you! meet! At Prisma Dental, we’ll treat you like family – because we started as a family. Pioneers of dental tourism in Costa Rica and more the 30 years of experience in all dental treatments. Ifl ove to travel, want the best value for your money, and desire high-quality dental care, then we’d love to meet you! Let your best travel souvenir be a beautiful smile! Prisma Dental is located less than 10 minutes away from downtown San Jose. You will find our fully equipped treatment rooms with comfortable chairs and plenty of windows to admire the view of the ever-changing mountain scene of Costa Rica. We have 8 treatment rooms, which means long wait-times are kept to a minimum all ready to handle any required dental treatment. We have our own on site laboratory with the latest equipment and highly trained personnel capable of working extremely complex cases. We are happy to recommend nearby hotels and to help with the details of your trip. Contact us for more information. Sit back, relax, and enjoy in our state-of the-art clinic while our highly trained doctors do the work to create your new smile. It truly makes Prisma Dental a whole experience, experience, not just a "visit to the dentist." For more information go to our website: www.prismadental.com

Affordable Dentistry in Paradise By Nadine Cordero, DDS MsD Dental Implants, Periodontist

When you consider traveling to another country for your dental care, you want to know what others are saying about their experiences. At Prisma Dental, we understand this, so we've made it easy for you. Instead of filling up this page with a vast description of our clinic and dentists, we’ve shared the experience, reviews and testimonies of many people just like you that have traveled from all over the US and the globe to combine their dental care needs with their vacation. We look forward to showing how easy it can be to restore or enhance your smile while enjoying the splendour of beautiful and welcoming Costa Rica. “ I learned about Dr. Josef and Telma who own Prisma Dental though family, so I had complete confidence that I was going to a top notch excellent dentist when I decided it was finally time to address the dental needs I had, and I had many. I can understand that many people would be overwhelmed by the idea of traveling to an unknown country to get dental work done. I have been to dentists in the USA and in Europe so I would say I am very familiar with the processes to get anything done. What I would say to anyone trying to make the hard decision to travel overseas to Prisma dental to have your dentistry

Before

After

work done is, you will be completely impressed and satisfied. When I arrived there I knew I needed several root canals and possibly implants, not to mention my teeth were oddly shaped and needed adjustment. Needless to say, Dr, Telma, Josef and Nadine got to work. After many hours on and off the chair. A week later, I had a completely new smile. Other that the crowns that needed to go on the implants, I had all my teeth fixed and new crowns installed. From my personal experience, I have never seen a dental practice that has the ability to perform every aspect of dentistry in one state of the art facility.

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High quality dentistry at reasonable prices

osef Cordero Telma Rubinstein Cosmetic Dentistry J

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clinic@prismadental.com | www.prismadental.com Local (506) 2291-5151 | Toll Free from USA 1-866-741-8194

ARTICLE | REAL ESTATE

TIPS AND GENERAL GUIDELINES TO CONSIDER IF YOU ARE PLANNING TO INVEST IN COSTA RICA

28 COSTA RICA REAL ESTATE MAGAZINE It is possible to register the title of the purchase of real estate in the Costa Ri can National Registry either in the per sonal name or through a corporation. What’s required if the company holding the title is not running a business activ ity? It is only required to file the inactive corporation report informing the total value of the assets held by the compa ny. However if there is a business activ ity a D101 income tax has to be filed ev 12 COSTA RICA REAL ESTATE MAGAZINE C osta Rica is an amazing coun try with a widely diverse culture, history, nature, activities, ge ography, friendly people and delicious typical foods. Coming to Costa Rica will be a great adventure and the charisma of its people will make you feel more than welcome. It is such a great des tination for vacationing but also if you are looking for a business opportunity. With a very reasonable value you will find real estate with an ocean, moun tain or valley views along with diversity of the perfect weather with an average of 22°C (71°F) and 27°C (81°F). English speaking professionals such as Supervised Escrow Agents, Law Firm, Public Accountants, Real Estate Agents and others, are able to assist you with the purchase process, before, during and after closing. Jeimy Quesada Delgado E & T Escrow and Trust Solutions www.EscrowTrustSolutions.com +506 27716789

tips and guidelines. Capital Gains Tax: Approved and im plemented since July 2019, with a rate of a 15% c apital gain tax applied to the gain. However, if the property was ac quired before July 2019, there is good news as well; Congress added a provi sion to protect the owner in such situ ation. This provision allows real estate owners (persons and corporations) in such situation to apply for a special rate when they sell the real estate. Instead of paying 15% of the net profits, the law allows them to apply for a 2.25% to the gross sale price. There are also yearly miscellaneous payments per corporation to consider:

ery year no later than March 15th.here are also yearly miscellaneous fees and taxes to maintain the corporations and title in good standings. It requires very little effort at low costs. In addition, because E & T Escrow´s team knows and understands how im portant it is for you to count on a reli able team to assist you after closing; our Payments Account service is an ex cellent solution if you prefer to delegate monthly obligations related to mainte nance, payroll, utilities, HOA, property taxes, insurance and any other items while the monthly obligation are in the hands of experts. If Costa Rica is your next investment destination, we want to give you some

porations or foreign corporations regis tered in the Costa Rican National Reg istry must pay a tax called “Timbre de Educación y Cultura” (Education and Culture stamps tax) and its amount is based on the registered social capital. Luxury Tax: (Due January 31st) Prop erties valued above $220.000.00 must file and pay this tax. It has a sliding rate ranging between 0.25% and 0.55% based on the value of the constructions and a portion of the land in use. Every three years, taxpayers must present a D179 form to update the value of the real estate. Property Taxes: It is the tax on the real estate and owed to the county where the real estate is located. The tax rate is 0.25% of the property value regis tered in the Municipality. Filed every 5 years or anytime the property changes ownership, the landowner must pres ent a value declaration to the Munici pality. Once approved by the Munici pality, such value is used as tax base. This tax is due quarterly: March, June, September, and December. However,

some Municipalities offer a discount if the whole year is paid in advance. Simpl ified D101): Declaration of As sets value. Due November 2022 for the first time after extensions approved by the Tax authorities. We recommend that you to keep good records of the property purchase and improvements to prepare and declare the correct amount every year. D140 : This form is filed at tax adminis tration to register the corporation once it is setup or when there are changes in legal presentation, business activity, or domicile. Tax for Nontraditional Rentals: We understand you may buy a house, villa or condominium with the inten sion to use it during a season but rent it while you are away. You must consider the obligation of collecting the added value tax “VAT” plus the payment of the income tax on rentals. Contact E & T now and learn more about the guidelines, we want to help you to keep all in good standing.

Registry of Transparency and Final Beneficiaries (Also known as UFO or Ultimate Beneficial Ownership Regis try): Ordinary reports are due in April of each year (for all the corporations and companies) and it requires to report the ownership of the company up to physi cal person. Corporate Tax: It is the annual tax on Legal Entities and must be paid no lat er than January 31 of each year. The amount is approximately $121 US (de pending on the dollar exchange rates) for inactive corporations and ranges between $121 and $360 depending on company activity and yearly income. Education and Culture Stamp Tax : (Due on March 30th) Costa Rican Cor

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ARTICLE | REAL ESTATE

Costa Rica Residency Requirements There are several ways a foreign citizen can obtain residency in Costa Rica.

O btaining residency is the way to go if you are serious about staying in Costa Rica, although some ex-pats who live in Costa Rica have become ¨perpetual tourists¨ and do a visa run to the border, mainly to Nicaragua every 90 days, this is a risky proposition because visas are renewed for ¨up to¨ 90 days but this is done at the discretion of the immigration person at the border who can give you less time on that visa renewal or even deny it and then you are in a bad position. There is of course a bureaucratic procedure to obtain your residency and of course there are the related expenses. How ever; the advantages far outweigh the disadvantages. For example, only with a legal residency can a foreigner get a driver´s license, or be allowed to work legally, or get a post pay cell phone, or not need to carry around a passport, or get local prices at many places versus tourist prices, etc., etc., so it all begins to add up. Let´s see some of the various ways you can obtain residency: TEMPORARY RESIDENCY: PENSIONADO: Requires a monthly income of US$1000 per month. This

would be from a permanent fixed in come like a pension like private sector, government or social security benefits. RENTISTA: Requires a monthly in come of US$2500 per month and in cludes spouse and children under 25 years of age. This category requires a permanent and stable source of in come equal to or above US$2500 for two years which equals US$60,000 and is renewable. An international and recognized bank or financial institution must issue you a letter that states this or you can deposit the US$60,000 in a local bank and can take out $2500 per month. SPOUSE: Granted to the Spouse of a Costa Rican citizen under article 73 of the Immigration Law. WORK RELATED: Technical workers, Managers, Executives, Specialized workers, etc. of a company established in Costa Rica. INVESTORS: Foreigners who pur chase Property for $200,000 or more can apply for the status of Investor by

presenting the proper documentation to Immigration. SPECIALIZED: Professional, Scientif ic, and other such specialized individu als deemed of value to the country. RELIGIOUS: Persons who are part of duly accredited religious orders and are so recognized by the Ministry of Foreign Relations and Culture. PRESS & SPORTS: International Press Correspondents & Recognized Sportsmen PERMANENT RESIDENCY: Permanent residency is a migratory condition that allows the person who obtains it, to remain indefinitely in the country and with the freedom to work. Persons eligible to apply for this type of residency are those whose parents or children are Costa Rican citizens. The other persons eligible are those who have had a Temporary Residency for 3 consecutive years. PLEASE VISIT OUR website for more details: www.costaricarealestatemagazine.com

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GA R D E N CENTER CAFE GOURMET &

• Potter y & Fountains • Constructio n o f G ar den Areas • Pro d uctio n o f Plan ts An d Trees • D esign • Livin g Walls • Aquari um D esign

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(506) 2282-5600 / Cel. 8837-3305 viveros.proverde@gmail.com

Del Residencial Parque Valle del Sol 400 mts. Norte y 400 mts. Oeste ó de Terrazas Mall 1.5 km al Oeste

ARTICLE | REAL ESTATE

DISCOVER THE BEAUTY AND ATTRACTIONS

of Perez Zeledón in Southern Costa Rica

Pacific and has a lot to offer to both the visitor as well as to those looking for a place to call home. Lic. Herrera, please tell us what in your opinion are the must-see activities in this area? Possibly one of the most impressive places to visit is the Chirripó National Park area which is over 500 square kilometers of land and has as its´ most prominent feature, Cerro Chirripó which at an altitude of 3,820 m above sea level, is the highest mountain in Costa Rica. At its highest point on a clear day, you can see both the Atlantic and Pacific oceans. The climb up from basecamp can take from 6 to 9 hours depending on your physical condition and allows you to see how the vegetation changes form as you climb. At times snow has fallen on the highest parts. Another must-see is the sugar cane plantations along with a visit to a local farm so you can see the process and the final products including sugar for export. You can see sugar mills that where operated by hand and later using horsepower. Tours of the local high altitude coffee plantations, both

large and small, allow you to see the production process and how various coffees are mixed to regulate the acidity and produce export quality world class gourmet coffee. Another excellent attraction is the large Farmer´s market which offers a large variety of fresh natural products but also includes artisanal products such as kombucha, falafel, goats milk products and others made by immigrants to Costa Rica of various nationalities who now live in the local area and add to the cultural variety of our beloved area. Lic. Herrera, please tell us about the actual pluses of living in this unique location . Perez Zeledón is in a privileged location which has great weather year round, and you are also very close to the beaches of the South Pacific such as Dominical, Uvita, Ojochal and the amazing Osa Peninsula. You can also go from here to the border with Panamá and take advantage of the duty-free zones. Reaching here is a great adventure as you have two different routes to choose from: You can take the Pacifica Fernandez Coast Highway

HERRERA & ASSOCIATES Office: (+506) 2770-4932 US Office: (+305)433-4290 rherrera@bhclawfirm.com www.bhclawfirm.com

We had the opportunity to meet with Lic. Rodolfo Herrera who is a principal Attorney and Notary Public with the firm of Herrera & Asociados and on a more personal note, we wanted to have him tell us about living in Perez Zeledón which is a beautiful and generally unspoiled but lesser-known area in the Southern part of Costa Rica. It is inland but less than an hour away from the beautiful beaches of the South

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which starts in Puntarenas and heads South to Jacó, Parrita, and past the Quepos/Manuel Antonio beaches con tinuing toward Playa Dominical where you can take the turn and head inland and upward and reach Perez that way. A second way and my favorite is to go via the Cerro Bella Vista also popularly known as the Cerro de la Muerte, the hills of death, named as such based on legends of many farmers who traversed it on foot and died from the extreme cold which they were not accustomed to. This highway comes from San José, past Cartago and heads up into the mountainous areas where at one point you are just 500 meters below the height of the Chirripó highest point and at cer tain times of the year you can see icing on the vegetation and at night the sky is so clear and free of light contamina tion that you can see a myriad of stars and even satellites going by! Also, at certain spots you can see the oceans in the distance and experience a variety of microclimates and see fields of colorful vegetation. You can also see a variety of animals along this road, and I have seen on various occasions large tapirs. I also have a memory from many years ago of going with my father and seeing something fall from a tree, as we looked closer it turned out to be a puma the size of a great dane which then proceeded to cross the road. So, as I mentioned it can be a very adventurous route and has several interesting businesses along the road including one that has many hummingbird feeders just outside its windows and you can see all types and sizes of these birds. So those are some of the reasons I consider Perez such a special place and since it is locat ed far from the capital city and surround ing areas, our crime rate here is very low and we get our water from high altitude springs which makes it very healthy and good tasting. As you can see, I love liv ing here and recommend it to all. Another must-see is the sugar cane plantations along with a visit to a local farm so you can see the process and the final products including sugar for export. You can see sugar mills that where operated by hand and later using horsepower.

One of the most impressive places to visit is the Chirripó National Park area which is over 500 square kilometers

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Buying Property in Costa Rica 101-A Primer

ARTICLE | REAL ESTATE

You have visited Costa Rica, possibly several trips and you love it and you are ready to buy your own place in Paradise, great, you are making a wonderful decision!

14 COSTA RICA REAL ESTATE MAGAZINE Few places have all the pluses that Costa Rica can offer for retirement, re location and investment, so long as you do your homework properly! Do it right and you will be very happy but if you don´t do your due diligence and work with expert real estate and legal help to guide you, then you are basically rolling the dice and hoping to win. A big plus is that the foreign owner of property in Costa Rica has the same constitutional rights as Costa Rican citizens. One key piece of advice not usually given is that you should choose a good lawyer who will be the key person in getting things done correctly and safely in Costa Rica. Even before picking a Real Estate pro fessional, find a good lawyer, preferably one who works daily with the area you are interested in buying your property in, although some San José lawyers are also excellent real estate specialists. A good lawyer will advice you on any pit falls you might not have seen or even know about, and also knows who the reputable real estate firms or individuals in the chosen area are and can also help you to begin your residency application. In Costa Rica, mostly all land is titled, and those titles are registered and kept at the offices of the Public Registry in San José (the Capital city) in the Property Section (Registro de la Propiedad). Most titles are currently organized by means of a computerized system called the ¨Folio Real¨. A property ownership transfer re quires that both the buyer and the seller sign a deed before a Costa Rican Notary Public (whose concept is different from the ones in many other countries such as Canada and the United States and is re quired to formalize all transactions deal ing with real estate transfers) and that the deed is then recorded at the Public 18 COSTA RICA REAL ESTATE MAGAZINE

Registry. Nearly all purchases require a due diligence period of 30 to 60 days so an Option to Buy-Sell is signed (Opción de Compra-Venta) where the key items are specified such as the property reg istry information, the price, the option term, broker commissions and the key due diligence points that must be met in order for the down payment (given with signing of option) to be released to the seller by the Escrow company. Do not give the option money (which is usu ally 10% unless agreed otherwise mu tually), to the seller or his lawyer. Your lawyer should have a reputable escrow company he or she works with that will act as the independent third party in the transaction and that will abide by the op tion to buy contract stipulations. For your protection always use your own trusted lawyer to look out for your interests and do not agree to use the seller´s lawyer as that opens you up to big potential trouble. All titled land in Costa Rica, whether it is registered following the newer ¨Folio Real¨ system or the older book/page/en try system, can be accurately and safely title-searched in order to determine all relevant aspects on the specific proper ty, such as ownership, mortgages, liens, annotations or other issues, that may af fect ownership rights or the possibility of transferring said property to a third party. Title searches on ¨Folio Real¨ proper ties may be initiated in the computer system, which is accessible online but will then possibly require a follow-up in the book/page/entry system, particularly when the computer search shows liens, encumbrances or other property charac teristics that were ¨inherited¨ from older transactions on that land before it was transferred to the ¨Folio Real¨ system. Additionally, although the computer sys

tem will indicate a list of liens and en cumbrances, in most cases a thorough and complete title search will require the review of microfilmed or scanned documents indicating the details of such finds, which are not accessible online and can only be obtained at the offices of the Public Registry. Although, as indicated, the ¨Folio Real¨ is accessible online, generally private parties do not have the legal training to be able to accurately interpret the in formation acquired, as well as to know how best to follow-up any required fur ther steps. This is why it is highly rec ommended that a knowledgeable legal professional be used to perform and re port on the title search. In addition to the title search, if the property is owned by a corporation, it is essential to undertake a corporate search at the Commercial Section of the Public Registry. Only by doing so, can you verify that this corpo rate entity transferring the property is in good standing and also that the pro posed signatory of the transfer deed ac tually does have the legal power to do this transfer. Another important item to keep in mind when buying a property is the USO DE SUELO (what you are allowed to build or do on that property). For example, if you are buying a lot or built property for com mercial purposes but the land is desig nated for residential use only then you need to know this. Or you want to buy a lot and put several units on it but are only allowed a single residence or you want to have a Bed & Breakfast, but the municipality does not allow it, etc., etc. All of these pitfalls can easily be avoided with the use of a good lawyer and proper due diligence and the additional help of a good real estate professional.

Peréz Zeledón Address: San José, Pérez Zeledón, San Isidro de El General, 150 meters West of the Cultural Complex, DEHEGASA Building

Dominical Address: Puntarenas, Osa, Bahía Ballena, Dominical, across from Sports plaza, Plaza Solo Bueno, second floor.

T his is a very good question because no matter how attractive a country is, before you take the big step to move there it is very important to know that you can afford the lifestyle you are dreaming of. Naturally Costa Rica is one of the most desired destinations for retirees, and for other still young singles and families looking for a new and better place to call home. Costa Rica continually tops the lists of “Best Places to Retire” and “Best Places for Expats.” As well as the Happiest Countries results and for good reasons! The great weather, awesome scenery, variety of unforgettable natural attractions and the generally good Pura Vida vibes that are found here. When

you add in the excellent health care available (ranked just below Canada and above the USA according to WHO), the absence of an army, the stable democratic government for the last 74 years, the usually reliable power grid, the potable water throughout the country, the ample availability of healthy food, the nearness to the USA and so many more reasons, make the appeal of moving here extremely enticing. If we add to that the heightened effects of climate change in the Northern Latitudes and the fact that you are immediately allowed to own real estate or a business as a foreigner, then it makes a lot of sense to consider moving to Costa Rica.

So, returning to the question of what the Cost of Living in Costa Rica is, that is a question with a myriad of answers. I believe the question really asks and means many things. It is more like what is the Cost of Living in Costa Rica that will let me live the dream lifestyle I desire but for some on a limited monthly income such as a SSA pension it is more of a question of being affordable within that set monthly amount. You can live a modest but adequate lifestyle in Costa Rica if you have a US$1000 per month income but depending on your lifestyle requirements you could easily be spending as much as US$8,000 per month. It all comes down to your personal choices and expectations and

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your monthly income or savings. If we examine in more detail what a monthly budget of US$1000 will get you then the first key consideration is location. You cannot realistically expect to live next to the ocean and do it on such a limited budget in most cases but if you choose an inland location where you will find more Ticos (Costa Ricans) living and you adjust your lifestyle to be more like the average Tico then US$1000 per month is doable. For example, here is a real budget for a single individual living in Grecia (located in the Province of Alajuela and 30 minutes from the International Airport in San Jose and 45 minutes from the capital city of San José and all it has to offer): Monthly Rent (including Electricity & Water) - for a small unfurnished 1 or 2 bdrm. Apartment with 1 bathroom. US$330. In this particular scenario there is no hot water provided. Monthly Food Bill (includes taking advantage of the weekly Farmers Market Fair) - US$360. Monthly Internet (50 Gb down & 10 Gb Up) – Cable TV & Cell Phone bills total - US$ 90. At this point we are up to US$780 which would leave US$220 to cover entertainment, eating out, transportation (buses are plentiful and cheap) and putting a little aside for medical/dental appointments. So, as you can see it is doable but does not cover a monthly health plan or lots of touring or entertainment. Also, if you decide to own a vehicle that will add other recurring costs like

gas, insurance, the yearly road permit (marchamo), yearly safety inspection, repairs, tires, etc. And note that the housing is unfurnished so an initial amount to furnish and equip your home would be necessary and possibly funds to face unexpected out of pocket medical expenses. Now let´s say that you are living in a well to do area of the GAM (Greater Metropolitan Area) like La Sabana, Los Yoses, Rohrmoser, Curridabat, Heredia, Escazu or Santa Ana then you will have access to the many conveniences of a modern city including big malls, many restaurants, entertainment and cultural venues, top private hospitals, and many other amenities but your monthly costs will definitely tend to be higher. Staying with the single individual renting a 1 or 2-bedroom unit with appliances included (semi-furnished) in a high-rise tower with amenities like a pool and gym, the monthly rent amount can be from US$950 to US$1500 (based on current offerings online October 2022). Your monthly food costs if you are only going to the major supermarkets will run you US$500-600. The Internet plus cable TV will usually be much faster and with 200 Gb Down can cost about US$60 plus about US$30 for a basic monthly cell phone prepaid plan. At this point we are in the range of US$1540 to US$2190 depending on your rent cost and now we must add entertainment (more to do in the city so usually more expenses), transportation costs, lots of restaurants to choose from, Medical/Dental costs from either

a Health Plan or setting aside money to cover those needs when they arise. So, we are basically looking at monthly costs that can range from US$2000 to 3000 dollars. If like many, you are attracted to the beach lifestyle then just how close you want to be to the beach and which beach town you choose will affect your needed monthly budget. Again, using the single individual and renting a 1 or 2-bedroom unit with appliances included (semi-furnished) in a high-rise tower with at least a pool, the monthly rent amount can be from US$1100 to US$1800 (based on current offerings online July 2023). Your monthly food costs if you are only going to the major supermarkets will run you US$600 800 as the beaches are generally a bit higher. The Internet (50 Gb down & 10 Gb Up) plus cable TV will usually be about US$60 plus about US$30 for a basic monthly cell phone prepaid plan. At this point we are in the range of US$1790 to US$2690 depending on your rent and food cost and now we must add entertainment (usually many restaurant and bar choices at the beaches), transportation costs, Medical/Dental costs from either a Health Plan or setting aside money to cover those needs when they arise. So, we are basically looking at monthly costs that can range from US$3000 to 4000. Again, many factors come into play including your age and health and if you are living for a short period of time or part of the year or perhaps you are here under the new Digital Nomad designation and take advantage of the health insurance offered or if you have applied and received your temporary or permanent residency status under one of the various qualifying methods available which would give you access to the universal CAJA (Government Health System) health facilities, services and prescription drugs for a monthly cost based on a percentage of your monthly income. Private health care is available, and it is of excellent quality and can cost from 30% to 50% of what you would pay in the USA for similar health care services. So, while Costa Rica does not offer the lowest Cost of Living in Latin America it does without a doubt offer the Best Quality of Life for the buck!

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Costa Rica´s Medical Tourism

Costa Rica has acquired an excellent reputation as a provider of Medical and Dental services by offering World Class services at truly affordable prices. Thus, tens of thousands of foreigners come every year to Costa Rica to avail themselves of these Medical and Dental Services. For many foreigners and particularly for U.S. citizens, there is a significant savings in coming to Costa Rica for Medical and Dental care when compared to the cost of getting the same type of treatment in the United States. Annual checkups are another greatly discounted service that can be taken advantage of while combining it with a vacation in Costa Rica. The savings alone can be used to pay for your vacation and then some! In fact, average savings can range in the 35 to 70% range, making Costa Rica a very appealing alternative even without considering the highly attractive possibility of scheduling in some touring of this beautiful country as well as just plain relaxation, either before or after the treatment is received. While Costa Rica is not the only alternative for offshore Medical and Dental treatments, it is possibly the best alternative due to its consistent high quality in offering these services, its high ranking in Medical Services and the nearness to the United States as well as relatively easy entry requirements. We highly recommend that you explore the various options for Medical and Dental care offered by Costa Rica as well as longevity and wellness offerings that are also available at extremely competitive prices.

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ARTICLE | REAL ESTATE

Capital Gains Tax In Costa Rica always important to check this situa tion with the tax advisor, for a donation made just to avoid the present payment of capital gain tax is not always a good idea because it may affect future trans fers. lows to apply a formula to compensate such inflation and convert the old price into a present value. It is better to ask your accountant to apply this formu la since they are very knowledgeable about the specific point. Can I add other costs or taxes when calculating the real profit?

What is the rate to be paid for such tax? The rate is 15% of the Net profits. How ever, there is a kind of grandfathered clause in the law, which allows apply ing a different rate (2.25% of the Gross price) if the transmitter acquired the property before July 1st, 2019. How is the Gross Sale Price (transmis sion price) calculated for these purpos es? It is the real selling price minus: i) The costs of the investments and im provements made on the property sold ii) The transfer taxes and costs paid for the transfer of the property. iii) Notary fee and closing costs paid for the transfer of ownership. While the law does not state it specifi cally, in my opinion, a Real Estate Bro ker fee may also be deducted if it must be paid by the Seller. How must the Seller calculate the ac quirement price that must be deducted from the Gross Sale Price for the pur pose of defining the profit? To the real price paid for the property one should add the following: i) The costs of the investments and im provements made on the property now sold. ii) The transfer taxes and costs paid to buy the property. iii) Notary fee and closing costs for the transfer of ownership. Again, the law does not establish it, but in my opinion, a Real Estate Broker fee may also be deducted if it was paid when the property was bought or ac quired. Because of economic inflation, the acquirement value may be unreal and too low. Therefore, the law also al

No. Only the ones mentioned in the law, which are the ones I mentioned in the 2 previous answers. You may add other costs and taxes only if we are not using the capital gain regime, but the income tax regime. If one or both prices are in US Dollars, how must the calculation be made? The current regulations require in these cases that all prices be converted into Colones at the selling exchange rate of the Central Bank of Costa Rica. ( www. bccr.fi.cr ) for the respective date. Example: If the property was bought on July 1st, 2018, for a price of US$300,000, then this amount must be converted into CR Colones according to the selling ex change rate in effect on July 1st, 2018. If the property is sold later on May 15th, 2022 in the sum of US$450,000, then this amount must be converted into CR Colones according to the selling exchange rate in effect on May 15th, 2022. Based on these CR Colones val ues, we calculate the real profit. Once the property is sold, when must I pay the capital gain tax (if any)? The law requires that the tax be paid on or before the 15th day of the next month from closing date. It is important to mention that these answers are just a guide to have a better approach to the subject, but it cannot be taken as a le gal or tax advice since there are many small issues to take into consideration. Therefore, it is always important to check with your attorney, accountant and/or tax advisor.

By Casimiro Vargas Law and Notary Public CV Firm www.cvfirm.com

S hould I pay Capital Gain tax if I sell my real estate property in Costa Rica? That is a question that we need to an swer in detail. It all depends on the ac tivities your company runs. If you or the company owning the property is run ning some commercial activities and the property has been used in such ac tivity, then you don’t have to pay capital gain tax. However, you must include the proceeds of the sale as part of your regular income for the purpose of the income tax payment. If the property is not used in the com mercial activities (what is also known as “affected to such activity”), then you must pay capital gain tax if you get some profits when you sell it. Do I have to pay if I donate the prop erty to anybody else or if the property is transferred by inheritance to my chil dren or somebody else? The answer is NO. In such ca ses, this tax is not paid, but the future transfer of the property may be negatively af fected by the previous donation. It is

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