Costa Rica: Tax on Holiday Rentals

A draft anti tax avoidance law to be discussed by the Assembly in Costa Rica clarifies the obligation to pay sales tax on homes rented out for less than a month.

Thursday, August 7, 2014

Sales tax on holiday houses rented to tourists is already covered in the General Sales Tax Act, but in practice "... this obligation is often breached by owners," affecting the formal hotel sector, which has to pay the same tax.

The bill to improve the fight against fiscal fraud presented by the Minister of Finance clarifies that "... services taxed with sales tax (13%), ...include hotels, motels, and boarding houses, whether the stays be temporal or not. "

Article 6 of the plan sent to Congress adds that "... any lease of real property for residential use, for periods of less than one month shall be considered as incurring the general sales tax."

Heriberto Pablo Abarca, president of the Chamber of Tourism, told Nacion.com that "... the clarification of Finance is good step to combat informality in the market."



More on this topic

Taxes on Rental Accommodation in Costa Rica

February 2017

A bill being prepared by the hotel union would force platforms such as Airbnb to pay 13% sales tax and an additional 5% for national parks.

The bill is being drafted by the National Chamber of Tourism, which intends to submit it to the Legislative Assembly. If passed, this law would take effect for all platforms used for renting accommodation for tourism purposes, such as Airbnb, Homeaway and others.

Costa Rica: Vacation Rentals Must Pay Taxes

January 2017

The new law against tax fraud obliges anyone renting houses and flats for less than 30 days to register and pay sales and income taxes.

Services of renting houses, apartments and condominiums for periods less of than one month must pay sales and income taxes, and those who carry out such activities must register as taxpayers of the two taxes, in order to not be subject to fines.

The (Already Lost?) War Against Vacation Rentals

April 2014

The trend of renting out non-hotel accommodation for a few days is global, and it will grow even more in the next 5 years, so regulating it will be a better solution than banning it.

In Central America Panama is the country where the phenomenon of Holiday Rentals shows the highest growth, despite a law prohibiting it.

Vacation Rental On The Rise

November 2010

Tourists are renting more and more houses for leisure purposes, competing strongly with the traditional hotel industry.

Vacation rental is defined as the renting of villas, houses, apartments or country estates for a few days or weeks, and is growing fast around the world. Central America is no exception to this phenomenon, which suits especially families or small groups.