What You Need To Know About Costa Rica’s New Regulations on Short-Term Rentals: Bill 23766

The short-term rental market in Costa Rica is flourishing, largely driven by popular platforms like Airbnb and VRBO. While this growth has provided opportunities for property owners and bolstered tourism, it has also presented challenges that require attention. In response, Congress has introduced two key bills, 23766 and 24061, aimed at formalizing and regulating this growing sector. Below, we’ll cover the key points from Bill 23766 and its potential impact on property owners and the short-term rental industry.

The Purpose of Bill 23766

This bill seeks to establish new requirements for short-term rental properties, ensuring high standards of safety, quality, and tax transparency. It also aims to strengthen the enforcement of existing regulations, such as those outlined in Law No. 9742, which requires registration with the Costa Rican Tourism Institute (ICT).

However, low compliance rates and insufficient penalties have hampered the effectiveness of the current law. Bill 23766 proposes stronger measures to address these gaps and build trust in the short-term rental market.

Key Requirements for Property Owners in Costa Rica

If passed, the bill will require short-term rental property owners or managers to:

• Register with the ICT: This guarantees users a higher standard of service and quality.
• Register with the General Directorate of Taxation and implement Digital Invoicing (Factura Electrónica): This ensures transparent tax reporting.
• Comply with hygiene and safety standards.
• Maintain liability insurance: This protects guests in the event of accidents or other incidents.

Proposed Penalties for Noncompliance

The bill introduces a tiered penalty system to enforce compliance:

For Property Owners

• Fines range from the equivalent of one base salary (approximately $800) to five base salaries ($5,000) for properties larger than 200 square meters.
• If noncompliance persists for more than three months after a fine is issued, penalties double for each semester.

For Marketing or Management Companies

• Companies managing or marketing nontraditional lodging services face fines equivalent to five base salaries ($4,000).
• Persistent noncompliance will result in doubling of fines for each semester of continued violation.

For Tax Violations

• Noncompliance with tax obligations under this bill will result in penalties as outlined in the Tax Standards and Procedures Code, with fines reaching up to 100 base salaries ($80,000).

Goals of the Bill

The overarching aim of Bill 23766 is to formalize the short-term rental sector in Costa Rica. By ensuring compliance with strict safety, quality, and tax standards, the bill seeks to enhance user trust and promote a secure and enjoyable rental experience.

Looking Ahead: Bill 24061

This blog covered the highlights of Bill 23766. In the next installment, we’ll delve into the details of Bill 24061, which further expands on the regulation of this sector.

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Disclaimer: The information provided in this blog post is for general informational purposes only and is not intended to constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations are subject to change. For the most accurate and up-to-date information, please contact our office directly. Some images may be AI generated.