• Ron Snell

Beach Homes & The Maritime Zone.

What is the Maritime Zone, and Why Should I Care? Well, if you are hoping for a beach home in Costa Rica, you need to care a lot!

Bottom line: With very few exceptions, the first 200 meters of land along the coasts of Costa Rica are owned by the government and cannot be owned by anyone else, whether Costa Rican or foreigner.

The first 50 meters from the high tide mark are restricted and may not be developed. They are public lands and no one can be blocked from using them recreationally. The next 150 meters are often available for development if you get a long term use permit, or “concession.”

Obstacles to getting a concession would mainly be environmental. Any areas that are wetlands or have mangroves growing on them are automatically off limits. Other areas might have forests or wildlife that can’t be cleared or disturbed.

You get a concession by applying for one at the appropriate municipality. Basically you have to check and make sure no one else has authorization to use the property, and you have to say what you are going to do with it. Private residence? Hotel? Restaurant? Resort?

In response, the municipality will either deny the concession or approve it. If they approve it, it will be valid for 20 years and they will attach a value to the proposed development of the property so they can levy an annual use tax, known as the “canon.” That would be in lieu of a property tax, but can be quite a lot higher because it is a specialized property.

Once you have a concession, you have a specified amount of time to do the development or lose the concession. If you do the development, pay your canon as required, and do not violate any of the laws or restrictions on the property, renewal should be straightforward as long as you do it on time.

Those are the basics. Realistically, however, you would most likely be buying a concession that is already established. What then?

The concession will almost always be owned by a corporation, and the majority ownership has to be a Costa Rican or a foreigner who has permanent residency. The latter takes several years to get, so assume you will have a corporation in which you are not a majority shareholder. When you buy the concession, the appropriate number of shares will be transferred to you. That is something you need to check thoroughly so you are comfortable with the arrangement. A good lawyer can help you sort it out.

If you are buying undeveloped land, you need to know what use and value the concession permitted because a) you will need to build that and b) your canon will reflect that. If you don’t build on time, you can lose your concession. (As of this writing in 2019, two years is the deadline for starting construction.)

If you are buying an existing business or home, you need to make sure all of the laws and restrictions have been followed. There have been cases of homes being bulldozed or businesses being shuttered because laws were broken or the concession’s requirements weren’t followed. For example, if a wall or pool infringes on the 50 meter restricted zone, you will be required at some point to remove it! There is no negotiating that.

In summary, there are extra concerns to research when you buy concession property here. Do your homework. There are some great concession property available for purchase, and there are some that will pretty much be a series of migraine headaches. Don’t ever let an agent fast-talk you into thinking “It will all work out.” Do the Due Diligence and hire someone who specializes in concessions to protect you. If you do that, you could end up with one of the most desirable properties in the country. If you don’t do that, you could end up with nothing but regrets.

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@2018 by Ron Snell.