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Vacation Rentals in Costa Rica under Tax Scrutiny

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Vacation Rentals in Costa Rica Under Tax Scrutiny


A basic search for Vacation rentals by owner in Costa Rica shows over 5,000 properties being offered for rent in Costa Rica.   Many realtors for years have offered Costa Rica properties for sale with the incentive that they will yield a return when placed in a rental pool.   This is more common in the coastal beach areas of Costa Rica.


The local Costa Rican Tourism Associations see the increase in private rentals as a direct threat to their hotel industry.    The hotel industry has had a difficult economic time during the past two years and they blame in part the increase in the amount of private rentals. 


The Costa Rican Hotel Chamber Association (CCH) is lobbying before the Costa Rican Congress for ways to level the playing field.   Their position is that the flood of vacation rentals which do not pay taxes, licenses or contribute to the social security system of Costa Rica is hurting the hotels that do contribute and are licensed.   They argue that although the amount of tourists increased in Costa Rica by 5% the hotel occupancy levels did not go up.  


During the Costa Rica real estate boom thousands of condominiums were built in the coastal areas.  Due to the lack of a vibrant real estate market to sell these units they have all been turned into vacation rentals.  


As a result of this many of the hotel associations are pressuring the local municipal government and national tax authorities to crack down and impose fines and sanctions on those vacation rentals that do not comply with local laws.


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