Costa Rica has no real estate sales licensing requirement. Those who wish to enter the Costa Rican real estate market as salesmen or broker and establish a semblance of credibility in the eyes of their clients are encouraged to earn a certification from the Costa Rica Global Association of REALTORS® (CRGAR). This is not required and CRGAR is neither a sanctioned or official body and has no teeth or licensing requirements whatsoever it more of a club of self promoting realtors with residency . In the freewheeling world of real estate in Costa Rica it is better than nothing, but CRGAR has more to do with self promotion of its members than setting standards or providing a multiple listing service highlighting the informality and lack of any centrality of this body. It is a body formed by realtors to promote realtors , a glaring conflict of interest. With no authority do not rely on them to have any teeth, They are not fiduciarys meaning they are not required by any law to protect their clients as in the United States for instance. no fiduciary accountability whatsoever like the Board of realtors enforces in the United States. It also confuses foreign buyers who think it is an official, sanctioned body of some sort, which it is not, so compared to the United States this body will do little for you other than lend an air of respectability to a profession that was plagued by horror stories for years. It is a step in the right direction, but be careful, certain realtors and developers are still bad guys in the eyes of this guide, Whether it be crimes against the environment or dirty tricks in general, we know who they are after 22 years of doing business here. Ultimately the due diligence is up to the buyer. In Costa Rica Caveat Emptor” ( buyer beware) still holds especially true. Do not assume deceptive constructs like crgar, designed to project the same authority as a board of Realtors will ever have your back or be held responsible for misinformation or deceptive practices. There is simply no such infrastructure available yet in Costa Rica
Remember CRGAR is not governed or responsible to anyone but commission oriented realtors. If you get in a jam you are on your own .
If you have ever thought about expanding your real estate business into Costa Rica? a certification from the Costa Rica Global Association of REALTORS® (CRGAR) is of some help. The 2-day course covers topics such as:
- types of property and real estate ownership rights
- residency and immigration requirements
- real estate tax law
- leasing and much more.
Whether you’ve already obtained your CRGAR certification or not, it’s important to know the changes that are taking place in Costa Rica that will ultimately impact its real estate industry:
VALUE-ADDED TAX ON ALL GOODS AND SERVICES
All professional services have been subject to a 13 percent sales tax for years. With new tax laws in effect, this old sales tax has become a value-added tax (VAT) on all goods and services, including real estate commissions. For example, a client who is selling their home with the help of a REALTOR® is now responsible for paying VAT for the REALTOR®’s services. All professionals, across all professions, will now be collecting VAT from their clients.
THE INTRODUCTION OF CAPITAL GAINS TAX
For the first time, Costa Rica has introduced a capital gains tax. The rate is 15 percent of the gain. It has yet to be determined how the “basis” will be established to calculate the gain. Many owners who have kept their properties undervalued on the public records to minimize property taxes may find themselves with very large tax liabilities should they choose to sell.
REGISTERING WITH SUGEF BEFORE HANDLING CLIENT FUNDS
The Costa Rican government’s General Superintendent of Financial Institutions (SUGEF) will soon be requiring anyone who is involved with transactions involving client funds (e.g., earnest money) to be registered with SUGEF. Currently, only citizens or permanent residents can register with SUGEF. How this requirement ends up being defined and implemented could have a profound impact on the industry and potentially eliminate the brokers who have temporary residency status or have not yet applied for residency.
A special thanks to Allen Lungo, President of the CRGAR and Operating Principal of Keller Williams Costa Rica, for providing first-hand knowledge of this information. If you have any questions about traveling to Costa Rica or Costa Rica real estate, please feel free to contact Bob Burger at email@example.com.