When Costa Rica’s immigration reforms were approved in August, one change seemed to escape the headlines in local media reports.
And that change could be the most significant reform for foreigners.
Under a new administrative ruling, nonresidents who own more than $200,000 in property can apply for temporary residency status as investors, 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, a GoDutch Realty agent, 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 in Costa Rica for four years. “But maybe this will be an incentive for people to buy.”
Newhouse said property owners in Costa Rica have not reduced their sale prices, despite the worldwide recession. He added that very few people have defaulted on their mortgages. Such defaults are 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 not done that.
“Instead of people coming to Costa Rica to buy homes, many are finding better deals in places like Phoenix, Arizona, in the U.S.,” 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 also may take advantage of the change.
Temporary residency lasts one year and is renewable. After five years, residency can be renewed every two years.
Other recent reforms to the immigration law include higher fines for undocumented foreigners, the ability to apply for residency within Costa Rica and the opportunity to renew tourist visas without leaving the country.