Costa Rica Property Report

Costa Rica, Ahead Of Its Time, Perhaps Time To Turn Back the Clock?

Costa Rica, land of white sand beaches and warm ocean waters and once considered an excellent place to invest in real estate, is not living up to its extensive billing. The country’s tourism industry has not caught up with its urge to develop its coastline, resulting in a series of development failures gone bankrupt and others that have not discovered the true meaning of “deluxe resort”.

The weakened global economy only added to the problem. Developers, counting on baby boomer retirees to seek vacation homes along the country’s beachfront, were disappointed with the lack of interest. Some buyers, lured by the tranquil waters, lost thousands when the condos they thought they were buying were never put up.

Costa Rica got ahead of itself and in the process some of its priceless natural resources were marred. Some beaches, once endless stretches of wave kissed sands are now littered with poured foundations for condos that won’t be built anytime soon or completed condos that sit empty and neglected.

As the country sits in an economic valley, perhaps it will take the time to reconsider its offerings to the world. Long noted as an excellent destination for eco-tourists, those that don’t mind sleeping under the stars and who police their trash and themselves, Costa Rica may want to go back to what it does best. The temptation for modernity is there, but is the necessity?

Costa Rica Real Estate Report

Costa Rica Celebrates Inauguration of First Female President

Laura Chinchilla made history in early May, when she celebrated her inauguration as the first female president of Costa Rica, as well as Latin America’s fifth woman president. Chinchilla took over the reigns of government from Oscar Arias, a Nobel Prize winner. She had served in Arias’ administration as vice president and was widely viewed as his preferred successor.

Chinchilla promised to continue with policies established during Arias’ tenure. She aims to increase international trade, especially that with China, and hopes to launch a trading pact with the United States. Enhanced trade policies developed in the Arias administration helped Costa Rica’s economy endure the rough waters of the recent worldwide recession.

The new president will extend other Arias mandates that have resulted in Costa Rica’s wealth of tourism. By 2021, she hopes to establish the country as being the world’s first country that is carbon-neutral.

Costa Rica is becoming a haven for people all over the world who seek an affordable, eco-friendly place for year-round or vacation homes. The country’s Southern Zone is the beneficiary of new developments, including airports and highways. These improvements will provide access to formerly secluded parts of Costa Rica, and encourage the development of more residential projects.

Jackie Flynn, who publishes International Living, is a fan of Costa Rica, citing its political stability relative to other Latin American countries, its economic prosperity, excellent health care and many beaches. Flynn said that because of recent infrastructure enhancements, there are currently a number of bargains to be had in real estate.

Costa Rica Real Estate Report

Investing in Beachfront Foreign Property Is Still Affordable, At Least For Now

Investors looking for overseas property tend to gravitate towards warm, sunny climates preferably near water and developed enough to provide some distraction, but not enough to take real estate prices out of the affordable zone. New areas, such as the Ecuadorian Coast or the recently opened up Southern Zone of Costa Rica have property available at less than $100,000 per unit. Getting in on the ground floor might just be one of your best investments.

Ecuador, with its low priced beachfront property and inland homes that go for bargain rates, is one of the hottest markets. The Pacific Coast shoreline that runs between San Vicente and Pedernales is largely undeveloped. There are no resorts or high rises, only wind swept sand beaches fronted by palm trees and tropical forest. Life is low and slow, easy going and low stress.

For better or worse, the modern world is catching up. Developers in the know are snatching up parcels of land and earmarking them for future projects which will sell for much higher prices than they paid. Coco Beach is a new development that is offering to build beach houses for $105,000 including the land. That bargain is not expected to last.

Costa Rica’s Gold Coast was much like Ecuador’s sleepy beach towns. Now a half acre lot with an ocean view can set you back $600,000. Head south to the newly opened Southern Zone and that same lot will cost $90,000.

How long will it take for these two bargain investment areas to see prices balloon into those like that of Costa Rica’s Gold Coast? Not long. At the rate lands are being snapped up, best advice is that if you are at all interested in buying a bit of beach front real estate in either of these scenic countries, well, get a move on!

Costa Rica Real Estate Report

Retirement Plans – Canada Pension Plan and Retirement 101

When Canadians retire, they are guaranteed a certain amount of money through the Canada Pension Plan (CPP). This is to help supplement retirement plans that perhaps come from employee pensions or through retirees RSP or RRSP savings plan. Though not originally intended to do so, today’s CPP provides death benefits, widows and veterans benefits and disability payments.

Workers, either though their employer, or on their own if they are self employed, are expected to contribute toward CPP. A certain percentage of income up to a certain dollar amount ($47,200 in 2010) is paid into the pension plan. Employers are expected to contribute equal payments to the plan. This constant influx of money insures that the plan will never be without funds.

Canadians would for the most part enjoy a more financially secure retirement if they were knowledgeable and diligent in saving money in private plans. Many people have invested in RSPs, but there are many more that have not taken advantage of these tax friendly programs.

Rather than the government looking at the federal plans and considering changes, which it tends to do on occasion, it would perhaps be more beneficial to educate people on financial matters, starting in grade school. Right along with the reading, writing and arithmetic, we can begin teaching the value of a dollar and how to increase that value.

Costa Rica Homes Report

The process of Buying property in Costa Rica is similar to the process of ownership in the states, but understanding purchase requirements and property owners rights are keys to success for foreign investors.  Buyers should always make sure a potential property has a correct  folio real, a tracking number that is used by the Costa Rican LLC to track transactions.

Costa Rica has solid real estate.  Buyers and sellers are legit, and the political stability of the region adds to the value of the land.  The actual process of buying is similar to the United States.  Transactions require the title and the survey to be exchanged.  Insurance is available.  Although present laws do not require agents to be licensed, Costa Rica Chamber of Real Estate Brokers is working to establish certain requirements for the ethical code and governing laws of agents.

Many buyers open what is called a Sociedad Anónima, a Costa Rican limited liability corporation which can handle the property deals and avoid fees.  Property taxes are low, less than 1% with no capital gains tax.  Coastal land is strictly governed, with limitations on foreign ownership.

In many transactions, buyers and sellers split the closing costs, but these details are always parts of negotiations.  Costa Rica is definitely one of the most eco-development-friendly places, leading the way for Central American sustainable development.  Although hurricanes are not common, earth quakes are a hazard, and all construction must meet safety requirements.

There is a three percent transfer tax added to property transfers, and the local laws add a variety of benefits to buyers who have proof of pension benefits.

Costa Rica Property Report

Investing in Increasingly Desirable Costa Rican Property

Investing in real estate in Costa Rica is becoming quite popular. The process is similar to that in the United States. As with all real estate ventures, potential buyers should do their homework and become familiar with purchase requirements, the rights of property owners and methods for avoiding unnecessary fees or problems.

Most real estate transactions in Costa Rica require a certified title (escritura) and a survey (plano). Buyers may purchase title insurance. As of yet not all real estate agents are licensed but Costa Rica’s Chamber of Real Estate Brokers among other groups are working to standardize the industry. Most agents are bi-lingual.

Buyers often form a limited liability corporation in Costa Rica which can help make the process simpler and less expensive. In some cases this is not practical. Only two people are required to create a Costa Rican corporation and once formed it is easy to transfer property from one member to another.

Buyers and sellers usually split the closing costs, but this can be negotiated. The property transfer tax is currently at 3 percent with annual property tax rates of 1 percent. Since the person with the first offer has a legal right to the property it is important that once a transaction is made it is filed immediately. Retirees who can verify a pension income may qualify for benefits if they apply for “pensionado” status.

Acquiring property within 150 meters of the water is a bit more complicated. This is Costa Rica’s maritime zone and foreign ownership is restricted. Normally one must buy the right to use what is known as “concession land” and any development must be approved by local authorities. No beaches in the maritime zone may be considered private.

Keep in mind that while hurricanes are rare in Costa Rica, the country is prone to earthquakes and all construction must adhere to strict seismic standards.

Costa Rica Real Estate Report

Costa Rica Luxury Tax in Question

To Begin, the majority of laws that are created in Costa Rica are eventually challenged in front of the country’s Supreme Court, and they are then dismissed as laws because they are ruled unconstitutional.  Many of the law makers have no understanding of what it takes to realistically enact a law.

There is a law trying to be passed called the Luxury Act.  This act is designed to eradicate poverty, but the law is simply unrealistic and lawmakers have no realistic way of collecting the tax without the use of threats and intimidation.  The law seems like a new form of legal extortion against the Tico’s.

The law is causing citizens pain because they do not understand how to comply with it.  The Act begins with truly absurd instructions.  It instructs people to pay the tax online, via a computer.  Since when did the Costa Rica government require a person to own a computer?

The law is psychotic, and it calls for all residents to give the government their bank account numbers to be able to freely withdraw the taxes.  Also, all of the taxes are supposed to be paid and completed during the holidays, when the government offices will shut down, along with attorneys, appraisers, and accountants.

Bottom line, the law is full of flaws.  It cannot be used fairly and equally by all residents, and therefore the Costa Rica government needs to revisit the new law and revise it to make it equal and realistic.
 

Costa Rica Real Estate Report

Safety and Security in Costa Rica

I seem to always be asked questions concerning the safety barometers of investing in Costa Rica. Throughout my years of visiting Costa Rica I’ve noticed plenty of people making money in this country and others who’ve either lost money or haven’t made much to brag about; nevertheless, I’ve bought and sold property in this country and I currently have business ties to the area.

As a result of the aforesaid, it’s pretty fair to conclude that I have somewhat of an understanding of what it takes to make a safe investment in Costa Rica; plus, I can bear witness to many people making costly mistakes in the real estate business here in Costa Rica. If you don’t have good perception and common sense then you can easily become the prey in a vicious real estate cycle.

Yes, Costa Rica has its fair share of bribery and corruption but what country doesn’t. Some places are worse than others and Costa Rica has become the focus of plenty horror stories. Nevertheless, the biggest mistake that I’m witnessing in Costa Rica amongst people, is assuming that just because a person speaks great English they are worthy of being trusted and naïve newcomers can easily be taken advantage of in Costa Rica.

I’ve read the 15th edition of the bestselling book written by Christopher Howard, The New Golden Door to Retirement and Living in Costa Rica and I must admit, it’s a great reference guide for those who may be considering making an investment in Costa Rica. The one bit of advice that I would recommend to anyone is staying aware of that certain breed of animals that will do practically anything to survive in Costa Rica.

The people in reference are those that have grown accustom to not being on fixed incomes and have taken on a desperate state-of-mind. I’ve found that these people will go to great lengths to put money in their money even at the expense of others. What’s even more noticeable is that these aren’t bums on the street; most of these people are operating legitimate businesses from ownership of hotels to running a profitable restaurant business. They may also have very productive websites on the Internet, exalting their professionalism and familiarity of the Costa Rica. If you’re going to be ripped off in Costa Rica, it will more than likely be committed by someone who fits this bill.
 

Costa Rica Real Estate Report

The Most Complete Costa Rican Real Estate Guide Goes to Press

Costa Rica’s reputation as a reliable property investment target has been growing for nearly ten years. As reported by CNBC News, the country ranked among the hottest real estate markets in the world for 2006. For many Americans, reducing their holdings of the falling dollar and increasing their holdings of hard assets outside of the United States is one of the best ways to protect their wealth in this uncertain economy. The super wealthy have been using this strategy for many years in an attempt to reduce liability and protect the value of their wealth.

The rich invest in assets outside of the country to diversify their financial portfolios and protect their money. With the reliability of markets such as Costa Rica’s increasing, even average Americans can now use this strategy to protect themselves from the fallout of the world economic slowdown.

With the dollar’s continuing downward spiral, record deficits at home and wars and financial disasters abroad, the pressure to find safe havens for investment will continue to grow. The U.S. Government is expected to enact huge tax increases within a few years to pay for social security, the bailouts, the currently planned health care takeover, and benefits for the large numbers of senior who will soon be eligible. To fund these programs, many expect that these tax increases will be larger than anything previously seen in this country, and may land the United States at the top of tax rates among developed nations.

There seems to be no end to the financial burden that the current government of the United States is willing to place upon current and future taxpayers. Diversifying current personal assets into opportunities outside of the country may be the only option for Americans to protect what little wealth remains, and secure the lifestyle they want. Investing anywhere in these uncertain times is difficult, and the need for safety in investment choices has never been greater.

Because of that, Christopher Howard – the author of various books on living abroad, and a Costa Rican real estate magnate who owns more than 1300 acres of beach front real estate – has released his current book, Christopher Howard’s Guide to Real Estate in Costa Rica. 44 pages long, this book is the product of many years of personal experience and research, and it constitutes the most complete guide on this topic ever produced.

The book was written by professional journalists Peter Krupa and Lindsay Whip, and includes chapters dealing with locating property, obtaining permits, financing, and much more. There is even a lengthy chapter that provides an overview of Costa Rica’s different geographical regions and styles of architecture, as well as a directory that provides a list of contacts ranging from private bilingual schools to lawyers and environmental engineers.

As Howard notes, “I wanted to make this book essential for one-time home buyers and developers alike. Doing business in Costa Rica doesn’t have to be complicated and people should research things so they have the right questions to ask when they move forward.”

According to Howard, the books co-authors have written the book in their capacity as journalists, and have no involvement in Costa Rican real estate. Krupa resides in Costa Rica and has spent a number of years freelancing as a real estate and business reporter for the English language publication the Tico Times.
 

Costa Rica Real Estate Report

Costa Rica Tourism Sees Decline After Record Year

After a record-breaking 2.51 million visitors in 2008, tourism in Costa Rica dropped to 2.29 million in 2009 , matching 2007 numbers. However, arrivals are predicted to return to 2008 levels next year, with continued growth until 2013.

Most of the increases in tourism have been based around health tourism and ecotourism. Much of the drop has been due to the economic climate and fears related to the H1H1 virus (swine flu.) Much of this drop has been focused in nearby countries, with 10% fewer North American tourists and 8% percent fewer Latin American tourist visiting this year. This is being combated by increasing flights from Europe and developing the Carribean province of Limón.

Recently the government replaced the 3% hotel tax with a $15 tax on all inboard flights to target the increasing number of rental properties. Along with an increase in federal income, the switch has encouraged construction of hotels by major hospitality companies including Marriott and Barceló.

Tourism is a major industry in Costa Rica, accounting for almost 8% of the country’s Gross Domestic Product and 3% of the country’s workforce.
 

Costa Rica Real Estate Report

Atenas, Costa Rica

Due to its incredible scenery, beautiful climate and favourable living conditions, the Costa Rican city of Atenas is attracting tourists and real estate investors from around the globe. National Geographic Magazine labelled the city as having the Best Climate in the World. The much visited La Paz Waterfall is only 30 kilometres from the city.

Atenas is on the western border of the Valle Central. The Juan Santamaria International Airport is 12 miles away from Atenas’ city core. Roadways are constantly being maintained and improved. San Jose, the capital of Costa Rica is a 21 mile drive.

Surrounded by the Valle Central hills and verdant mountains, Atenas is home to coffee plantations and grape farms. Tropical flowers and plants are in abundance and palm trees dot the city streets. Weekly market days bring thousands of visitors to the city. The area’s strong agricultural industry has made Atenas a self sufficient city with strong economic growth

Community resources such as schools, banks, hospitals and shopping centres are constantly being improved. A new highway is expected to open by 2010 that will connect the city to a major traffic route. All of these improvements will bring an increase in land prices and development and will further entice real estate agents, investors and visitors.
 

Costa Rica Real Estate Report

Costa Rica Real Estate Market Improving

While the United States and Europe continue to suffer through a real estate market downturn Costa Rica real estate remains a popular investment. Cash investors are drawn to Costa Rica for the favorable property ownership and tax structure as well as the beauty of the region and mild year-round climate. Increasingly popular are “fractional ownership” properties. The benefits of fractional ownership include return on investment, quality properties and services, property management, rental income, and transferability. As the name implies fractional ownership allows investors to purchase a fraction of property which provides them a designated amount of time of access and usage of the property.

One hour northwest of San Jose, Reve Orange is a premier condo development in Playa Naranjo that offers both full and fractional ownership. The New York based architectural firm, Dataumzero Design Office, designed the complex which includes five penthouse and twenty condo units. Eco-luxury features include: Brazilian hardwood floors; floating staircases; and accordion windows.

Pre-approved investors are invited to Reve Orange for a weekend sales seminar. Meals and accommodations will be provided. Once invested in fractional or full ownership of Reve Orange investors will receive a full refund of airfare expenses incurred.
 

I am a representative of Paradise Brokers International, contact me to learn about the properties available through this brokerage. If you have any questions about any of these Costa Rica Real Estate Properties or would like to arrange a viewing, please feel free to contact me on (780) 431-1900 or e-mail me through the Contact Me form on my website.

Enjoy Your Real Estate Investment in Costa Rica, a True Paradise"
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