What's the best way to frustrate property pirates

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Why do foreigners get hoodwinked and bamboozled out of their stuff in Costa Rica? Or, any place else in the world, for that matter.

Usually, because people tend to be too trusting. On the other, a lack of knowledge. Why do attorneys get a bad rap? Because knowledge is power. Some legal professionals use their know-how to steal. And then, how to weasel out of the crime.

When an expat comes to this country to buy a property for retirement or investment, they are faced with many dilemmas needing decisions. One on the top of the list is whether to use a company to hold the assets they purchase, or hold them in their personal name. There are positive tax implications for doing the latter, but most believe they are outweighed by security and liability concerns.

Thieves love properties held personally because when someone dies they get a dishonest notary to forge a signature and “voilà” the asset is transferred to someone else. Dead people cannot fight for their rights. Heirs have a hard time proving fraud in court.  Physical stock certificates of sociedad anónimas are easy to forge, too. This is probably the second most common way to steal property in this country.

There's a taxing couple of months in store for expats

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

The end of September brings fiscal tax year 2014 to a close. Oct.1 begins 2015. There are tax filings and payments just around the corner for almost everyone.

Tax dodgers are caught by not filing required tax forms. The country’s tax system is very reliant on the checks and balances built into the system. The tax department also analyses gross and net profit margins and changes in owners’ equity that does not match with taxes paid against profits to find companies that are not paying their taxes fairly.  Random audits are occurring more frequently, too, to catch cheaters. 

Here is a summary of what is on the horizon:

Some expats may have a really big problem

By: Garland M. Baker B.

Exclusive to A.M. Costa Rica

Editor's Note: While this article was accurate at the time of publication, some information may now be outdated. We are currently preparing a comprehensive update. Sign up for our Alerts to be notified as soon as the revised content is live!

Some foreigners from the boom days are having to play a shell game today to substantiate ownership of properties they purchased during those times. The reason is that attorneys before September 28, 2012, loved putting real estate purchases in guaranteed trusts.

Most laypeople have no clue what a guarantee trust is and why it was used so much in the past, and why a property they purchase may be in one. In simple terms, they were used so lenders, especially developers, could circumvent using a mortgage to sell property on credit.

The sure tale sign a property is in a guarantee trust is to look up the folio real number of a property and see if the text EN CALIDAD DE FIDUCIARIO is next to the name. If it is, it is a trust.

Trusts can be a perfect vehicle for getting deals done. They can also be a good way to insure trustworthiness. However, they can be abused and be a vehicle to hoodwink expats out of their valuable property.