New Regulations on Short-Term Rentals in Costa Rica: Key Points from Bills 23766 and 24061 in Congress

The short-term rental market in Costa Rica has seen rapid growth, driven by platforms like Airbnb and VRBO. However, this boom has also brought challenges that need attention. In response, bills 23766 and 24061 have been introduced to Congress in an attempt to formalize and regulate this sector, benefiting property owners, users, and the tourism industry as a whole.

Here’s how these new initiatives may impact short-term rental owners and the industry in general, if they are eventually passed by Congress, and why it’s crucial to stay informed on their advancement.

Bill 23766: Strengthening the Regulatory Framework.

Bill 23766 proposes important reforms to ensure short-term rentals meet high standards of safety, quality, and fiscal transparency. Currently, Law No. 9742 requires these services to be registered with the Costa Rican Tourism Institute (ICT). However, low registration rates and lack of penalties have limited the effectiveness of this regulation.

What does this bill propose?

1. Mandatory Registration: All property owners or managers must register with the ICT. This is not just a requirement, but a guarantee of quality for users.

2. Tax Compliance: Registration with the General Directorate of Taxation and digital invoicing will be mandatory, promoting formalization and transparent tax management.

3. Enhanced Safety and Service Standards: Property owners must ensure hygiene and safety standards and have liability insurance to protect guests in case of incidents.

4. Effective Penalties: The penalties considered in this Bill for non-compliance are as follows:

• For short-term rental owners:

a) A fine of the equivalent of one base salary (¢389.961,60 for 2024 – $800 approx) when the property has a size of less than one hundred square meters.
b) A fine equivalent to three base salaries ($2,400 approx.) when the property is more significant than one hundred square meters and less than two hundred square meters.
c) A fine equivalent to five base salaries ($5,000 approx.) when the property is larger than two hundred square meters.

If non-compliance persists after three months following the finalization of the fine, the penalty provided in the previous paragraph will be doubled for each semester that the infraction continues.

• For short-term rental managing, marketing, or intermediary company:

The company’s legal representative managing, marketing, or brokering non-traditional lodging services that fails to comply with these obligations will be fined equivalent to five base salaries ($4,000 approx.).

If non-compliance persists after three months following the finalization of the fine, the penalty provided in the previous paragraph will be doubled for each semester that the infraction continues.

• Penalties for tax violations:

In case of non-compliance with the obligation provided in the Bill about taxes, the sanctions provided in the Tax Standards and Procedures Code, Law No. 4755 of May 3, 1971, and its amendments will apply, which could impose sanctions of up to one hundred base salary ($80,000 approx.).

With this bill, the Government aims not only to formalize the sector but also to offer users a secure and quality experience, building trust in the short-term rental market.

Bill 24061: Simplification and Legal Certainty.

Bill 24061, in turn, focuses on simplifying compliance processes for property owners, ensuring greater legal certainty for all parties involved. This initiative emphasizes the importance of clear regulations and non-discrimination in accessing these services.

What does this bill propose?

1. Clear Obligations: Property owners must register and meet tax obligations, ensuring that each booking follows a formal and legal process.

2. Prohibition of Abusive Clauses: Rental contracts must not include abusive clauses and must respect equal access, without discrimination based on nationality, ethnicity, gender, or disability.

3. Consumer Protection: This bill establishes minimum service standards that protect users’ rights and ensure they receive the promised quality.

What Do These Changes Mean for Property Owners and the Industry?

These bills are designed to professionalize the short-term rental sector, promoting formalization and regulating key aspects that improve safety and trust in this type of accommodation. For property owners, this is the ideal time to get up to date and adapt to the new standards. Beyond enhancing the customer experience, complying with these regulations can bring tax benefits and greater business stability.

Are You Ready to Adapt to These Changes?

If you’re a short-term rental owner or manager in Costa Rica, these changes could directly impact your business. Take this opportunity to regularize your property, meet quality standards, and provide a safe, reliable service to your clients.

Don’t let the regulations catch you off guard. Get informed, get prepared, and turn your short-term rental into a solid, successful business.

For more information, please contact Lourdes Andrea Vega Salas at lsv@quatro.legal.

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.