CR Cell Phone 011 506 363 2875
Skype Phone 1 561 459 4858
goodlife@puraosa.com
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CR Cell Phone 011 506 363 2875 Skype Phone 1 561 459 4858 goodlife@puraosa.com |
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Closing
Costs |
Unless agreed otherwise, it is customary for the buyer and seller to share equally in the closing costs. Typical costs are shown below. There are three closing costs: government taxes and fees, notary fee, and mortgage costs. Government taxes and fees This includes a real estate transfer tax of 3 percent; a registration fee of 0.5 percent, and documentary stamps (agrarian, hospital, municipal, bar association, national archive and fiscal stamps) totaling approximately 0.55 percent. Notary fees The notary who drafts the transfer deed is entitled by law to charge 1.50 percent of the first one million colones of the sales price, and 1.25 percent on the balance. Mortgage costs It is customary for the person who is receiving financing to pay the mortgage costs. A mortgage can be created simultaneously at the time of sale by adding a mortgage clause in the transfer deed or a separate mortgage instrument can be drafted. A mortgage within a transfer deed pays registration fees of 0.25 percent in registration fees and approximately 0.53 percent in documentary stamps. The notary will also charge for drafting the mortgage instrument and that fee can range from approximately 0.525 percent to 1.25 percent of the amount of the mortgage, depending on the circumstances involved. You should know that Costa Rican real estate transactions commonly operate on a two-tiered system. Since Costa Rican properties have a low property tax appraisal base in relation to market value, it is a customary practice to run property sales through at the registered value, which may be substantially lower than the actual sales price of the property. In such a case, all transfer taxes and fees discussed above would apply to the registered value as opposed to its sales price, with the exception of the notary fee. Ask your attorney about the potential risks of this practice. Sample closing costs on a $100,000 transaction: Sales Price: $100,000 (Registered Value: $15,000) Registration of the transfer deed Once all the fees have been paid, the notary who drafted the transfer deed must ensure that the deed is presented and registered in the Property Section of the Public Registry. You should be very sure to follow up with the notary to ensure registration. Although presentation guarantees your priority (i.e., first in time, first in right), it does not automatically guarantee registration. The Public Registry will not register a transfer deed unless all taxes and registration fees are included; a certified copy from the Finance Ministry (Ministerio de Hacienda) is provided certifying that the seller's property tax (impuesto territorial) payments are current; and a municipal certification is provided from the municipality where the property is located certifying that both buyer and seller are current on municipal tax payments. Likewise, any prior instruments that encumber the property (i.e., mortgages, liens, judgments, etc.) must be lifted before your transfer deed will be registered. Once a transfer deed is accepted for registration, the Public Registry will return the original document with all the documentary stamps affixed to it and properly sealed. Assuming no defects in the transfer deed, it should be registered by the Public Registry with 45 to 60 days after presentation. So, follow up with the notary to ensure registration, otherwise you can have problems in the future when you decide to resell the property and find out that your sale was not registered. |