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Last Updated: Oct 04, 2016

Costa Rica’s higher-end property market continues to grow rapidly as foreign homebuyers flock in.

Due to the absence of official house price statistics, it is hard to assess the exact movements of house prices, but the trend is clearly upwards.

In San Jose, the country’s capital, the average listing price of houses increased 6.2% y-o-y to US$1,201 per square meter (sq. m.) in August 2016, an improvement from a meagre growth of 0.4% in the previous year, according to On the other hand, condominium prices in San Jose rose by 3.6% from a year earlier, at an average of US$1,685 per sq. m.

“We’re definitely having an uptick in sales,” said Shawn Ferguson of Coldwell Banker. Costa Rica’s property market is highly dependent on the U.S. economy, which represents the highest number of foreign homebuyers in the territory. “As the U.S. heads up, so do we,” added Ferguson.

The most expensive and fastest-selling properties in Costa Rica are in the Central Valley, the greater metropolitan area (including San José, Alajuela, Heredia and Escazú) where most businesses are, and the Pacific coast.  The least expensive properties can be found in new developments in the Costa Rica’s southern region, such as the Osa Peninsula.

Popular investment locations currently experiencing dramatic increase in demand include Tamarindo, Playa Langosta, Playa Grande, Drake Bay, Santa Teresa and Mal Pais, Montezuma, Puerto Viejo, and Nosara and Playa Guiones. Waterfront properties in these areas are priced from just US$100,000.
  • In Santa Ana, a 3-bedroom single family home currently costs about US$212,000, according to the well-respected
  • In Ojochal, a similar property might cost around US$265,000.
  • In Tamarindo, 3-bedroom houses are priced at US$375,ooo.

Gated communities and condominiums are particularly popular among expats and foreign homebuyers. “In the last three years, 80% of sales in Costa Rica were at $200,000 and upward,” said Michael Klein of San Ramon Properties.

"Costa Rica has proven attractive to investors for its relatively open investment and trade policies, as well as for being the most politically stable country in Latin America," said Robert F. Davey of Century 21 Marina Trading Post.

Sales activity started to rise in 2013, when property sales transactions increased 14% from a year earlier. Property demand has been robust since then.

Gross rental yields in some parts of Costa Rica are moderately good, ranging from 6.5% to 7.9% at end-2015, based on Global Property Guide research.

Costa Rica’s property market is expected to remain vibrant during the remaining months of 2016, amidst robust economic growth, according to local property experts.

Costa Rica’s economy is expected to expand by 4.3% this year, after 3.7% growth in 2015, 3% in 2014, 1.8% in 2013, 5.2% in 2012, 4.5% in 2011, and 5% in 2010, according to the International Monetary Fund (IMF).

There are no restrictions on foreign buyers in Costa Rica.

Foreign investors buoy the housing market
US buyers are driving up property demand in Costa Rica. There are also an increasing number of buyers from Canada, France, Germany, and Belgium.

“Higher median prices in the USA are now driving buyer interest in higher priced and luxury real estate properties, particularly for ocean view, beachfront, and near beach properties,” said Chris Simmons, the founder of Re/Max Ocean Surf.

“Buyers from hot markets in the USA like California and Florida see Costa Rica as offering great value in comparison to similar beach real estate in the United States. We still have luxury condos for under $200 per square foot, pricing that is rare in the USA,” Simmons added.

Aside from its scenic beauty and lower cost of living, many Costa Ricans, foreign investors and High Net Worth Individuals (HNWIs) are increasingly attracted mainly because foreigners are entitled to the same ownership rights as Costa Rican citizens, and there are no property taxes and no residency restrictions.

Costa Rica average listing price“Where else in the world can foreigners come to a country with no soldiers, a government that caters to investors and fee-simple real estate with no restrictions and where foreigners are entitled to the same ownership rights as Costa Rican citizens,” said licensed realtor Chaud Oskar Byers.

Most foreign homebuyers pay in cash, since mortgages are not easy to obtain and mortgage interest rates are relatively higher than in their home countries.

Analysis of Costa Rica Residential Property Market »

Last Updated: Nov 16, 2016

There are good rental returns to be had in Costa Rica. San Jose houses generate on average 8.6% returns - surprisingly good!

Apartments and houses in San Jose Province, in San Jose city, Escazu and Santa Ana generate around 7.5% returns. There only appear to be minor differences in rates of return between houses and apartments.

Much the same applies in Heredia province, and in Alajuela. These returns are slightly below what one would have expected 5 or 10 years ago, but not much less.

Our research concentrates on the market´s higher end. Rental returns are likely to be higher on smaller properties in less desirable areas.

Read Rental Yields  »

Last Updated: Apr 06, 2017

Costa Rica modern housesRental Income: Rental income is taxed at progressive rates, from 10% to 25%. For tax year 20164-2017, the first 3,517,000 (US$6,280)income is not taxed.

Capital Gains: If capital gains are not derived from habitual transactions, they are tax exempt. Otherwise, capital gains are taxed at a flat rate of 30%.

Inheritance: Transfer of Costa Rican properties, even by way of inheritance, is taxed at progressive rates, from 1% to 2%.

Residents: Residents pay tax on their worldwide income at progressive rates. Income from non-employment sources are taxed separately from employment income.

Read Taxes and Costs  »

Last Updated: Apr 07, 2017

Total roundtrip transaction costs are around 8.75% to 14.75%, inclusive of the real estate agent's fee that ranges from 5% to 10%. It is customary for the buyer and the seller to share the costs equally. The buyer must be wary of buying a property with liens or squatters.

Read Buying Guide  »

Last Updated: Jun 10, 2015

Costa Rica houses and propertiesDespite the passage of a new law aiming to strike a balance between landlords and tenants, the rental market is still pro-tenant.

Rent: Rents can initially be freely negotiated between landlord and tenant. If rent for housing purposes is agreed in US dollars or other foreign currency, no yearly increases are allowed. Rent increases are allowed only in the case of agreements in colones, the Costa Rican currency.

Tenant Security: The minimum lease term is three years, but the tenant can cancel it anytime by giving a three-month notice. Unpaid rent can be very difficult to collect.

Read Landlord and Tenant  »

Last Updated: Oct 04, 2016

Widening fiscal deficit is a concern

Costa Rica GDP inflationCosta Rica, with a total population of about 4.84 million and GDP per capita of US$10,936 in 2015, has long been a popular tourist destination. Beautiful beaches and valleys, tropical greenery, wide biodiversity and a comfortable climate attract a growing number of tourists.

Costa Rica’s economy is expected to expand by 4.3% this year, after 3.7% growth in 2015, 3% in 2014, 1.8% in 2013, 5.2% in 2012, 4.5% in 2011, and 5% in 2010, according to the International Monetary Fund (IMF).

Costa Rica had robust economic growth from 2003 to 2007, with annual average real growth of 6.7%, according to the IMF. However, the economy grew just 2.7% in 2008 and contracted by 1% in 2009, due to the global crisis.

In the first half of 2016, total tourist arrivals increased 12.3% to 1.59 million from the same period last year, according to the Costa Rican Tourism Board.

Costa Rica is the most visited country in Central America, capturing around 26.4% market share. Americans account for about 40% of all visitor arrivals in the country every year. It is estimated that about 100,000 American citizens live in Costa Rica and more than 1 million visit the country every year.

Costa Rica now faces growing fiscal deficits. The fiscal deficit stood at 6.4% last year, and is expected to reach 6.9% of GDP this year.

Both Standard & Poor’s and Moody’s Investors Service cut their outlook to negative in February 2016. Last year, all three leading credit rating agencies cut Costa Rica’s credit rating to junk status, citing the country’s weakening public finances.

The country’s total debt was equivalent to 42.4% of GDP in 2015, up from 39.3% in 2014 and 24.2% in 2008. Total debt is projected to increase further to 45% of GDP this year and 47.3% next year, according to the IMF.

The current account deficit fell to 4% of GDP in 2015, according to the IMF.

During the first quarter of 2016, unemployment stood at 9.5%, slightly down from 9.6% in the previous quarter, according to INEC.

Consumer prices in Costa Rica increased 0.6% from a year earlier in August 2015.

In January 2015, the BCCR adopted a managed float exchange rate regime, with a range of 500 to 800 colones per USD1, and vowed to intervene only when the currency shows excessive fluctuations. In August 2016, the average monthly exchange rate stood at US$1 = 552.31 colones.

  • High yields for coastal units
  • Pro-tenant rental market
  • Moderate transaction costs
  • High rental income taxes
Price (sq.m): $1,938 For a 120 sq. m. property, usually an apartment.
Rental Yield: 7.48% For a 120 sq. m. property, usually an apartment.
Rent/month: $1,450 For a 120 sq. m. property.
Income Tax: 5.16% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 11.75% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: n.a. Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Pro-Tenant Rating is based on a detailed study of each country’s law and practice.

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