A self-directed IRA can own real estate, including real estate outside the United States, when the custodian is willing to hold that kind of asset and the title is taken in the IRA’s name. “Willing” is the first filter. Many custodians that allow a rental house in Arizona will not touch a folio in Guanacaste. Find the custodian before you find the house. See Investment guide.
The second filter is colder. The property has to be an investment and nothing else. You, your spouse, your ancestors, your descendants, and other disqualified persons cannot live in it, vacation in it, “just check on it” by staying the weekend, provide services to it, or sell or lease it to the IRA. Independent third parties manage it and repair it. The moment the house becomes your Gold Coast life, it has stopped being an IRA asset in the way the statute intends.
What a mistake costs
A prohibited transaction can cause the IRA to be treated as distributed. The whole account, not the weekend you stayed, can become taxable, and penalties can stack on top. That is why this page will not suggest a clever occupancy schedule. If you want to sleep there, buy it outside the IRA.
Costa Rica adds a layer the IRS pamphlet does not draft for you. Title has to be held in a way the custodian, the notary, and the registry all accept. Expenses — HOA, insurance, repairs, the corporate tax if a company is in the chain — have to be paid from IRA funds, not from your personal account as a favor. Income has to come back to the IRA. A Costa Rican attorney and a U.S. advisor who has done this exact structure should both be in the room before an offer goes out. Chris can introduce the local side. He does not administer the custodian.
How this sits next to a normal purchase
An IRA purchase still needs the same local diligence: folio, survey, water, permits, concession status, escrow at a SUGEF-registered agent. The IRA does not get a cleaner title because the money is old retirement money. If investor residency is also a goal, note the tension: residency practice wants the qualifying house in a person’s name, and an IRA is not that person. You generally cannot use the same building as both your residency investment and your untouched IRA asset. Confirm that with both advisors rather than forcing one structure to do two jobs.
This is general information, not legal or tax advice. The prohibited-transaction rules live in U.S. law, they are fact-specific, and a custodian’s paperwork is not a legal opinion. Have the CPA who signs your return read the plan before you wire.
One practical sequence works better than shopping houses first. Choose the custodian and confirm they will hold a Costa Rican folio. Have the CPA describe, in writing, who may and may not set foot in the house. Only then ask Chris for investment properties that can be managed at arm’s length. A house you already love and hoped to use in March is the wrong inventory for this structure. The right inventory is a place a manager can run without calling you to approve a weekend. Budget the custodian’s annual fee beside the HOA and the Costa Rican taxes. Those dollars leave the IRA, and they are part of whether the investment still makes sense once it is no longer a brochure.