When Costa Rica´s immigration reforms were approved in August, there was one change that seemed to escape the headlines of local newspapers and media reports.
Nevertheless, it could be the most significant reform for foreigners.
Under the new law, non-residents who own more than $200,000 in property can apply for temporary residency as an investor, allowing them to take advantage of the country´s public health care system along with other services not available to them as tourists. The clause is expected to take effect March 1, 2010.
For Michael Newhouse, an agen t with GoDutch Realty, this could be a key to jumpstarting the country´s flagging real estate market.
“The market has been so down,” said Newhouse, who has worked as a realtor here for four years. “But maybe this will be an incentive for people to buy.”
According to Newhouse, property owners in Costa Rica have not reduced their sale prices, despite the worldwide recession. Neither have many people defaulted on mortgages, which is a major factor in driving down home prices in the United States.
Unlike the United States and some European countries, where the governments have introduced homebuyer programs to stimulate the market, Costa Rica has seen no such programs.
“Instead of people coming to Costa Rica to buy a home, many are finding better deals in places like Phoenix, Arizona,” Newhouse said, expressing optimism that this reform could turn things around.
“We hope this will be an incentive for people to spend over $200,000,” he added.
The opportunity to become a temporary resident through owning a home doesn´t just apply to new buyers, according to the communications office of the Immigration Administration. Current homeowners can also take advantage of the change.
Temporary residency lasts one year and is renewable. After five years, residency can be renewed every two years.
Other reforms to the immigration law include higher fines for undocumented foreigners, the ability to apply for residency entirely within Costa Rica and the opportunity to renew a tourist visa without leaving the country.
Temporary residence for investors
is applicable to those who can prove:
Investments equal to or above U.S. $200,000, according to the official exchange rate determined by the Central Bank of Costa Rica, whether in real estate, shares, stocks or in projects of national interest. For renewal of immigration status, a person needs to prove that the investment is properly registered and taxed.
Source: Memorandum from the Immigration Administration