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Should I buy house under my name or corporation name?


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  • 5 weeks later...
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Many people who are buying property in Costa Rica wonder if they should use a holding company to own the property or keep it in their own name. There are several good reasons to use a Corporation (S.A.) or Limited Company (SRL) to own property.

 

Asset protection – If someone in the US or in Costa Rica would like to sue you, they will have a harder time finding property in a company name, rather than in your name. Simply because they already know who you are, but they would have a hard time guessing what your company might be called. In another instance, if you run into a personal liability situation (like a car accident) the company cannot be held responsible for your liability. That means that your house is protected.

Transfer Tax savings - If you are buying or selling a property that is in a company name, you avoid paying the transfer tax in the National Registry, since the name of the property owner will not change, only the shares will be transferred.

Estate Planning – With the proper legal advice, a company can assist you in lowering your estate taxes.

 

You want to be careful though about developers who offer you land in a corporation. Holding shares in a company you own that holds land you control is one thing. Holding a share or two in a company that has many share holders and owns land that they all own together is another thing entirely.

 

Some smooth operators have tried to circumvent regulations that developers must follow in order to legally divide a farm into lots through this scheme. The problem is that as a share holder you have no way of proving ownership of the land you built that beautiful mansion on. You are not legally protected as to your ownership, and even the size of your lot or its divisibility could be thrown into question.

 

As to the residency question, in some cases people used S.A. s holding real property to qualify for empresario status, but I believe that is no longer viable.

 

As to safety question, you are perfectly safe holding property either in your name or with a company you own, Foreigners have the same rights as Costa Ricans under the law, which has also been upheld many times by the Constitutional Court.

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What are the pros & cons to buying a house using a corporation name instead of one's own individual name?

 

Which would you recommend and why?

 

Please educate me. Thank you. ;)

 

There are many profesional attourneys that specialize in these matters. You should find one that is familure with your situation and give you advice that is pertanant to your situation. There are many, many opitions each with their own pros and cons. It shouldn't cost you more than a couple hundred bucks.

 

It is most likely that whatever LEGAL advice you get on a bullitin board will not be the best solution for you.

Edited by Kahuna
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It is most likely that whatever advice you get on a bullitin board will not be the best solution for you.
HUH?

 

I don't agree with that.

 

Granted, one should not just accept anything that is written in a forum or BB (except if I am the one that posted it! :) ), but to state that one should not believe anything is a bit much.

 

The information in the ARCR forums is just about as accurate as you can get as we monitor each post for accuracy. While we do not erase the post that is blantantly wrong, we do reply with what we believe is the correct info.

 

Obviously, with almost 8,000 posts, something dumb could get through, but we are pretty careful. Also, if someone posts something that none of us knows anything about, that can get through as well... but then often, somebody else corrects it.

 

Kahuna... If you see something wrong here in these forums, but all means please either report it to us or better, post a response with what you think is correct.

 

 

TG

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What are the pros & cons to buying a house using a corporation name instead of one's own individual name?

 

Which would you recommend and why?

 

HUH?

Kahuna... If you see something wrong here in these forums, but all means please either report it to us or better, post a response with what you think is correct.

TG

 

The original poster did asked ask for a recomendation on a legal issue. Are you saying that ARCR advocates giving out legal recomendations to posters on their bullitin board by other posters?

 

Its one thing to explore the pros and cons, quite another to solicit recomendations don't you think?

Edited by Kahuna
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Kahuna

 

Your words:

It is most likely that whatever advice you get on a bullitin board will not be the best solution for you.
did not limit to a suggestion that folks should always solicit legal advice from a qualified person (which I agree with). It made a general statement pertaining to ALL advice received on a BB. Had you used the word LEGAL before the word advice, I'd have not responded.

 

Also, a general question on why a corporation may be best or not is not (in my opinion, anyway) asking for legal advice. It is the kind of question that could be asked of a lawyer, a realtor, or just some home owner already here in CR.

 

Once someone responds, someone else can take issue if they feel the response was not corrrect or accurate. Forums become self policing after a while.

 

TG

 

 

By the way... did you ever make it here yet??

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Kahuna

 

Your words:

did not limit to a suggestion that folks should always solicit legal advice from a qualified person (which I agree with). It made a general statement pertaining to ALL advice received on a BB. Had you used the word LEGAL before the word advice, I'd have not responded.

.

 

TG

By the way... did you ever make it here yet??

 

LOL ...... sheesh ...... Okay, I went back and added the intended "LEGAL" .... LOL

 

I haven't been back down there yet. Maybe soon though. I am wrapping up my summer business. I have a project that I waiting word on. It is possible that I could be down within the next 6 weeks or so. Nov is probably more likely. I definitly plan to get down there before the new year.

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  • 8 months later...
What are the pros & cons to buying a house using a corporation name instead of one's own individual name?

* Legal

* Buying/Selling

* Residency?

* Safety

* Time

 

Which would you recommend and why?

 

Please educate me. Thank you. ;)

 

If your property is titled, a corporation is not necessary but is recommended to make it more difficult for Uncle Sam to find you.

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Actually, the best and most complete answer was posted by RUSS above:

 

Many people who are buying property in Costa Rica wonder if they should use a holding company to own the property or keep it in their own name. There are several good reasons to use a Corporation (S.A.) or Limited Company (SRL) to own property.

 

Asset protection – If someone in the US or in Costa Rica would like to sue you, they will have a harder time finding property in a company name, rather than in your name. Simply because they already know who you are, but they would have a hard time guessing what your company might be called. In another instance, if you run into a personal liability situation (like a car accident) the company cannot be held responsible for your liability. That means that your house is protected.

Transfer Tax savings - If you are buying or selling a property that is in a company name, you avoid paying the transfer tax in the National Registry, since the name of the property owner will not change, only the shares will be transferred.

Estate Planning – With the proper legal advice, a company can assist you in lowering your estate taxes.

 

As to safety question, you are perfectly safe holding property either in your name or with a company you own, Foreigners have the same rights as Costa Ricans under the law, which has also been upheld many times by the Constitutional Court.

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agree Tim and would add only a practical note that if you own property via a SA, then you can get your water, electric and telephones in that SA Corp name - otherwise, you must carry forward the present owner name at some or even high risk - Tim has talked about the catch 22 of the telephones so I won't repeat that - just get your SA Corp and your life will be easier - period

 

and finally (today) DO NOT put your property and your vehicle in the same SA Corp - xxx - for a couple hundred bucks you can have, and should use, separate corporacions .......

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