Cost Breakdown of Building a House in Costa Rica

When looking for land to build on, it is important to take into consideration the following factors during due diligence:

• Water Availability: Make sure the land has a water availability letter from the ASADA or AyA (Aguas y Aqueductos). If not, it is important to check for the feasibility of a well, or concession to use another source of water. For example, A concession might cost from $2,000-$5,000 depending on the project, and one to two years to receive the concession. Some municipalities will allow you to pull a permit with proof the process has been started so you can begin building right away, others will not give them out until the process is complete. If you are going to be digging a well, the price is about $500/meter for a hand-dug well.
• Electrical Availability: Always request an electrical availability letter from ICE. You will not be able to build without this.
• Uso de Suelo: This is the land use permission you need from the municipality.
• Plano: A cadastral map, essentially an official drawing of a property's boundaries. This document is crucial for buying land in Costa Rica as it provides detailed information about the property's precise dimensions and location. This can also include any potential legal easements on your property.
• Topographic Survey: This study will first confirm the areas of the plano, ensuring you are purchasing the same amount of land on the plano. On top of that, mitigating potential issues that could affect the usability, legality, and cost-effectiveness of developing a piece of land. Top tip: Make sure you ask the topographer for contour lines, as well as to make the locations of water and electricity. This will make the design and building process quicker. Depending on the size of your land, expect between $300-$750 to mark the lot lines. A more comprehensive study with contour lines will be more.
• Soil Study: A small upfront investment that can save significant costs and prevent future problems. It contributes to a more informed and responsible construction process, ultimately leading to safer and more durable buildings. This will be around $800.
• Taxes: Make sure the taxes are paid and up to date in the municipality.
• Condo Bylaws: If purchasing land, make sure you understand the condo bylaws and what you can or cannot do. This is very important when considering short-term rentals, as it may not be permitted.

Your lawyer should be able to help with most of the paperwork, figure about 4% of the purchase price of your property for closing costs and legal costs. 

Hire an architect or engineer who is licensed by the College of Engineers and Architects (CFIA) to create plans that work for you and your land. When considering choices for your architect, it's important to find architects who have already designed homes within your budget. Architects are artists. Finding one who has already completed projects within your budget will save you from shock and frustration in the long run. 

From a cost perspective, there is a maximum percentage for each phase of consulting and construction. For preliminary design, the maximum amount may not exceed 1% of the construction costs. When you get into construction plans—which include structural, architectural, electrical, and mechanical—the fee may not exceed 4%. 

When submitting your plans for approval, there are fixed costs associated with the permits. First, you have to submit to the CFIA (.33%), then to the Municipality (1%), and then you will also need to file for permits with INS for insurance (1.33%). The percentages are based on the construction costs. When submitting plans to CFIA the approval typically takes one to two weeks, and at the local municipality level about a month.

When looking for a construction company there are a few different ways to figure out the costs of your project.

• Stage Payments or Progress Payments: This process begins with a deposit, and then follows with payments when milestones are met, such as foundation completion, roofing, windows, etc. Make sure if you choose this method to have an inspection and approval before releasing funds. This method helps maintain control over the budget, ensuring that payments are made for actual progress on the ground.
• Cost-Plus Contract: Typically 20-35% is the total between contractor profit and covering overhead costs. Instead of percentages, another way to budget this method is by paying a fixed rate for labor by square meter. If this is the method you would like to choose, make sure that you have a construction lawyer review the contract and that you are aware of how everything works. Cost-plus contracts provide flexibility in making changes during construction without renegotiating the whole project cost, but they can also lead to higher expenses if not carefully managed.
• Lump Sum Contract: This is done with a fixed price, so the total payment amount is agreed upon before the work starts, and based on detailed project specifications. Payments are typically at regular intervals or aligned with specific project phases. When making any changes from the planned scope of the project there is usually a formal change order and adjustments to the price. Lump sum contracts provide certainty regarding the total cost, but they require a very detailed and accurate upfront definition of the project scope to avoid disputes over changes or unexpected conditions.

Make sure you have electricity and water set up on-site and ready for construction. Your builder can help with this.

Watch your dream take shape before your eyes as concrete pours and steel gets set in place!