Is there any begging in Costa Rica?

I have traveled more than most people, and all over Latin America. One of the things that always bothered me the most was how much poverty there is in all of these countries; you almost felt sorry for being successful in life and having money. When you step off the plane in countries like Mexico, Nicaragua, Panama and Belize, you immediately realize you are in a different world. The very first person you see is a soldier, carrying an automatic weapon, and this instantly puts you on high alert. It is very intimidating when the customs officer is wearing a camouflage uniform. As you walk through the airport, you see dozens of them with weapons, and they are usually NOT smiling or friendly. The army patrols these countries. Not in Costa Rica; they abolished their military in 1948. The customs officers at the airport don’t even carry handguns, and you MIGHT see one or two policeman with pistols. You are immediately put at ease and feel relaxed. Everyone is smiling and very friendly. WELCOME TO COSTA RICA.

As you travel throughout most of Central America and much of the Caribbean, you are bombarded with the sights and sounds of poverty. Entire villages are shanty towns; shacks made of sheet metal and boards, with no access to running water or electricity. Every corner you are approached by a beggar, with a cup, pleading for money to feed their children. You see homeless people strewn out across the sidewalks, sleeping anywhere they can find room to lay a cardboard box. As you try to relax in front of your hotel on the beach, you are constantly harassed by every kind of solicitor, hundreds of them, they seem to never stop. They are selling jewelry, tours, clothing and trinkets, and they don’t take NO for an answer. You cannot even enjoy the vacation it is so overwhelming. Most of these countries post big signs at the entrance to the hotels, warning you NOT to walk around the town at night, and to be VERY careful of strangers. Many of these places also have huge territories controlled by the Drug Cartels and gangs, so you can’t just jump in your rental car and travel where you want. You are very limited to where you can safely go and enjoy the scenery.

Costa Rica is an Eden in the midst of all this craziness. They call it the Switzerland of Latin America. You can travel anywhere in this country, and not ever once feel threatened. Like anywhere in the world, use common sense. There are no gangs or Cartel and you will never be stopped by a man in a tank, pointing an M-16 in your face. The police are very friendly and other than on the National Highways, you probably won’t even see one. But what sets Costa Rica apart from the rest of the world, is that there is almost NO extreme poverty. This little paradise has one of the highest percentages of Middle Class in the world. You see beautiful little homes, meticulously maintained, with satellite dishes on the roofs, and new scooters in the driveway. You see very little trash on the side of the road as the Ticos are very proud people. They love their country, and take very good care of it. They NEVER beg, they don’t have welfare of unemployment benefits, and everyone works. Very, very rarely do you ever see a beggar, I can count on one hand how many I have seen in a decade, and even the beach solicitors are scarce compared to other places. You might have one or two an hour come by, and when you say NO, they thank you, smile, wish you a nice day, and continue down the beach. Like everywhere, there is the occasional annoying Time Share sales guy, trying to convince you that it is NOT a time share, but a vacation club, and that their program is different from all the others. The best way to get rid of these guys is to just tell them I LIVE HERE, and they will wander off quietly.

What you do see here, instead of begging, are small entrepreneurs trying to make a buck to take care of their families. Young girls set up on the side of the road, with big boards loaded with handmade jewelry, waiting for a client. As you walk by they smile, but NEVER push you to buy. Young men, have coolers full of Ceviche or Pipas (small Coconuts) and hustle their refreshments on a hot day. At night you will see street vendors selling some of the best fajitas on a stick, that you have ever eaten; but again, they never pressure you to stop.

The guys I like the most are the “parking attendants.” As you park on the public roads, near the center of town or by the entrance to the beach, you will find people wearing glow in the dark vests, offering to watch your car. They are not employed by anyone, but have chosen to work, instead of beg or steal. Always say YES, but don’t pay them until you leave. They will keep an eye on your vehicle and your belongings, and then when it is time to go, they will help you back out into traffic, so you can be on your way. Tip them 200 Colones, which is the equivalent of about 50 cents, and they will be very thankful.

What you will find in Costa Rica is that everyone is very helpful. They work hard, play hard, and are the friendliest people in the world. PURA VIDA.

What are the costs of selling property in Costa Rica?

As explained in the previous FAQ, Buyers generally pay all the closing costs associated with buying the property. Sellers must pay the real estate commission and any legal fees to their attorney associated with representing them at closing. There is also now a Capital Gains Tax.

Most people own a property here in a Costa Rican corporation, similar to a US LLC. The corporation must call a shareholders meeting, to legally sell the property out of the corporation and into a new corporation that the buyer has created. Most Sellers do not come for the closing, so a legal Proxy must be created so someone can represent the corporation at closing with a Power of Attorney. Then after closing the corporation must be dissolved, if there are no other assets held by that entity. Attorneys usually charge between .5 % and 1% of the sale price for these services plus the 13% VAT sales tax on the legal fees. It is in a Sellers best interest to confirm with the attorney ahead of time what these fees will be.

The real estate commission in Costa Rica is very similar to North America. It is 6% and is split 3/3 between the Listing agent and the Buyer’s agent. Also, by law, there is a VAT sales tax of 13% on the whole commission.  That brings the total cost of selling property in Costa Rica to 6.78%.

As of July 1 2019, there is a capital gains tax in Costa Rica. If you purchased prior to July 1, then you have the option of paying EITHER 15% of the gain, OR 2.25% of the sale price, whichever is less. After July 1, 2019 you must pay 15% of the gain. If it is your personal home, and you can prove it, you are allowed to sell it with NO Capital Gains tax. You can do this once every year.

If your property was held in a Costa Rican corporation, and you are not going to use this entity again to purchase another property and as long as the corporation does not have another asset, like a car or bank account, you should close this corporation after the sale. There is a small fee for the attorney to handle this. It is your responsibility, to follow up a month or two later, to make sure the corporation has been closed, as you will still be obligated for all filings, taxes, corporate share holder agreements etc until it is final. There are big penalties with interest that can accumulate if the corporation is not dissolved.

All of these fees will be deducted by the escrow agent at closing.