Should You Buy Property Through a Costa Rica Corporation?
Many foreigners purchase Costa Rica real estate through a Sociedad Anónima (SA) or Sociedad de Responsabilidad Limitada (SRL). Here's when it makes sense and when it doesn't.
Advantages
- Tax savings on transfer: Selling shares instead of property avoids the 1.5% transfer tax
- Privacy: Property registered in company name, not personal
- Simplified inheritance: Transfer shares instead of going through probate
- Liability protection: Personal assets shielded from property-related claims
- Concession land: Required structure for foreigners without 5+ years residency
Disadvantages
- Annual corporate tax: ~$100-200/year
- Beneficial owner reporting: Must file annually with Banco Central
- Accounting requirements: Even inactive companies need basic bookkeeping
- Dissolution risk: Non-payment of corporate tax for 3 years = automatic dissolution
- Complexity: More paperwork and professional fees
When to Use a Corporation
| Situation | Recommendation |
|---|---|
| Single vacation home | Personal name (simpler) |
| Investment property | Corporation (liability protection) |
| Concession land | Corporation (required for foreigners) |
| Multiple properties | Corporation(s) |
| Estate planning | Corporation (avoids probate) |