A US notary watches you sign and stamps the page for a few dollars. The Costa Rican notario who closes your purchase holds a public office. That changes who the job protects.
A notario público is a Costa Rican attorney the state has authorized to act as a public officer. At closing, the notario drafts the deed, attests it, records it in their protocolo, and files the transfer with the Registro Nacional. The job is protecting the public record. Protecting your side of the deal is a separate job.
That one fact explains most of what feels backwards about buying in Costa Rica. Buyers even have a line for it. You need an attorney to investigate the attorney you're about to hire. It's half a joke. You can do most of that checking yourself, and it's free. For the wider buying process, the full guide to buying property in Costa Rica is the place to start.
What does a notario do in a Costa Rica closing?
A notario is a licensed attorney with a second authorization to act for the state. Two roles, two different bodies. The Dirección Nacional de Notariado supervises notarial practice. The Colegio de Abogados y Abogadas de Costa Rica licenses the attorney side, which is a separate registration with its own roster.
So when a realtor says "the attorney handles the closing," take it literally. There's no title company. And there's no closing agent whose only job is looking after the buyer. Title insurance exists in Costa Rica through a few international providers, but it isn't standard practice. Most closings rely on the attorney's registry study.
The notario drafts the escritura pública. They attest it and enter it in their protocolo, the bound official record they're personally responsible for. Then it's off to the registry.
Who else is the notario working for, besides the public record? Sellers and developers tend to show up with one already attached. That's legal. It's also very common. But it means the person drafting your deed may have a relationship with the party across the table. Ask about it. Plenty of buyers hire their own attorney to review the file even when the seller's notario formalizes it. Does a second fee make sense for you? That depends on the size of the purchase and how much Spanish legal text you can read yourself.
People sometimes tell me they've read that in Costa Rica "you don't really own it, the attorney owns it." Nobody's holding your property for you. A public officer records your ownership in a national database, and that database is the proof.
How do you read the folio real before you buy?
Ownership in Costa Rica lives in the Registro Inmobiliario, the real estate side of the Registro Nacional. Every registered parcel has a folio real number. Can you look it up yourself? Yes. Basic lookups on RNPDigital are free once you open an account. Certified copies cost extra.
You'll still get paper at closing. The notario issues a testimonio, a certified copy of the deed they authorized. But it's a copy. The ownership itself is the registry entry. When your paperwork and the registry disagree, the registry wins.
A lot of buyers close, wait a few weeks and still feel like they've got nothing proving they own the place. Usually the purchase is fine. The entry's sitting in the registry, and nobody on the deal told them where to look.
So ask for the folio real number early and pull the record yourself. Four fields matter most:
| Field | What it tells you | What should make you ask questions |
|---|---|---|
| Owner of record | Who legally holds the property today | The seller's name doesn't match, or it's a company you can't trace to the seller |
| Gravámenes | Mortgages and liens against the parcel | Any lien the contract doesn't say gets cancelled at closing |
| Anotaciones | Pending annotations, like a filed lawsuit or a competing transfer | Anything listed at all, until your attorney explains it |
| Plano catastrado | The surveyed plan and its boundaries | Boundaries or area that don't match what you walked |
People tend to skip anotaciones, and it's the one field you can't afford to. A pending annotation costs almost nothing to find before closing, and it's one of the most expensive problems to inherit after.
How do you check a notario's license in Costa Rica?
It's two lookups. Together they take about ten minutes.
- Check the attorney's standing on the Colegio de Abogados y Abogadas de Costa Rica roster.
- Check notarial standing at the Dirección Nacional de Notariado. An attorney in good standing at the bar can still have notarial functions suspended. That's a problem for a deed.
- Ask them, in writing, who else in the transaction they're representing, and keep the answer.
- Get the folio real number first. An attorney who won't hand it over before you pay a retainer has answered your question.
How much are closing costs in Costa Rica, and who pays?
The transfer tax is 1.5%. It's charged on whichever is higher, the declared price or the registered fiscal value. Registry fees and stamps come on top. Then there's the notary's fee. It follows an official fee schedule, the arancel, that works as a floor. All in, closing costs commonly run about 3.5% to 4.5% of the price. Rates and stamp schedules don't stay put. So get an itemized estimate from your attorney before you budget (Ley 6999; the notarial arancel; the buying guide has the line-by-line breakdown).
Who pays? It's negotiable, and splitting it is common. In a soft market, sellers sometimes absorb more.
Some sellers, and some attorneys, will suggest declaring less than you paid to shrink the transfer tax. Say the real price is $400,000 and the deed says $150,000. At most, that saves 1.5% of the $250,000 gap. That's $3,750. Then you sell for $400,000. Costa Rica sees a $250,000 gain on paper, and at the 15% capital gains rate that's $37,500 (Ley 6999; Ley 9635, in force since July 2019).
Two details change that math. Selling the home you actually live in is generally exempt from Costa Rica's capital gains tax. So it's second homes and rentals where the exposure lands hardest. And a seller who bought before July 2019 can generally choose 2.25% of the gross sale price instead of 15% of the gain on their first sale since then. Under-declaring shrinks their bill too. That's part of why the suggestion comes up (Ley 9635, Transitorio XXIV).
What about the US side? Your US basis is what you actually paid, whatever the deed says. Proving it means bank records. And they'll be sitting next to a deed that says something much smaller.
How do you keep a deposit wire from getting frozen?
Costa Rican banks work under Ley 7786, the anti-money-laundering law. A large wire from a foreign individual with a thin account history is the profile that gets held for review. I've heard from more than one buyer whose first big wire sat for weeks. The bank wanted to know where it came from, which is normal under that law.
Is escrow any safer? It exists in Costa Rica, and it's regulated. Escrow and trust providers are obligated entities under Ley 7786, and they're required to register with SUGEF, the banking superintendency. A legitimate escrow agent won't mind showing you the registration. One that gets cagey when you ask is telling you something (Ley 7786, art. 15 bis).
Two habits make the money side go smoothly:
- Build your source-of-funds file before you send anything. That usually means the closing statement from any US property you sold, two years of tax returns, statements tracing where the balance came from, and a gift letter if family's chipping in.
- Send a small test transfer first. Make sure it lands before the full amount moves.
Opening a local account runs on the same rules, and the banking guide covers what you'll be asked for.
What mistakes cost buyers the most at closing?
- Wiring a deposit before you've checked the escrow agent's SUGEF registration. Or before your source-of-funds file is ready.
- Letting the seller's notario be the only attorney in the room and assuming they're working for you.
- Under-declaring the price. It trims the transfer tax and writes a bigger capital gain into the record for later.
- Forming a company because "that's what everyone does" without asking what it costs each year or what US reporting it triggers.
What should be settled before the deposit moves?
How you'll hold the property. Changing that after the deed is recorded means a second transfer and a second round of transfer tax.
If you own Costa Rican real estate directly, in your own name, that's the simplest case. Property held directly generally isn't a foreign financial account for US reporting. A Costa Rican corporation carries US reporting every year, and which reporting depends on how the company is classified and who owns it. A decision made in twenty minutes at a lawyer's office can set that for as long as you own the place, and the penalties for missing the filing are real. If you own or are about to buy into a Costa Rican corporation, talk to a cross-border professional, me or someone else, before you file. If you'd rather research it yourself first, that's fine too. The guide to holding title as a US person walks through the ownership options.
Once you open a local account, foreign balances that add up to more than $10,000 at any point in the year mean filing FinCEN Form 114 (31 CFR 1010.350). The US tax obligations guide covers the deadline and the penalties.
What can you do tonight? Pull the folio real on any property you're serious about and run both license checks. Neither costs anything. The deed and the structure stay with your attorney. That's legal work. My part is mapping the money side of a purchase with you: which dollars stay liquid, and the order the rest moves in, before the deposit goes out. That's the stretch where expensive mistakes tend to show up. If you're under contract or close to it, get in touch. Still earlier than that? The readiness quiz shows where the rest of your plan stands in a few minutes.
This post is educational and does not constitute personalized investment, tax, or legal advice. Vitality Wealth Planning, LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. Tax laws change; verify current rules with a qualified professional.