Vacation Rentals: New Law Projected to Decline

With the legal framework approved in Costa Rica, which regulates the provision of tourist rental services in housing through digital platforms, Airbnb executives anticipate a considerable drop in the number of hosts in the country.

Thursday, September 12, 2019

On September 5, the Legislative Assembly reported that file 20865, the framework law for the regulation of non-traditional hosting and its intermediation through digital platforms, was approved for the second debate.

See "Plan to Regulate Airbnb Moves Forward

After completing the procedure in the Assembly, only the signature of the Executive and its subsequent publication is needed for the new rules that will apply to the sector to enter into force.

Carlos Muñoz, Airbnb's director of Public Policies and Communications for the Caribbean and Central America, explained to Nacion.com that "... a possible sharp fall of its hosts in Costa Rica is expected, in view of the obligations of the new law that regulates non-traditional accommodation in the country. Additional expenses are required such as hiring lawyers and accountants, as well as the adequacy of accommodation sites, which would cause this desertion of affiliates.

You may be interested in "Threats to "Traditional" tourism

Muñoz added that "... The drafting of the law is not appropriate for a company that is not domiciled in Costa Rica and that may have, for example, a Costa Rican host based in Mexico who rents a house in Costa Rica and does so through a management company."

For the Association of Free Consumers of Costa Rica, the bill that will regulate non-traditional hosting platforms such as Aribnb, contemplates, in addition to the 13% tax, other requirements for bidders, such as registration with the Costa Rican Tourism Institute.

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More on this topic

Plan to Regulate Airbnb Moves Forward

September 2019

In Costa Rica, the bill to regulate the provision of tourist rental services in housing through digital platforms, which includes a 13% tax and would require suppliers to register, which would make this accommodation option more expensive.

The deputies approved in their first debate, file No.

Changes in Proposed Vacation Rental Taxes

March 2019

A 3% additional to the 13% VAT that was expected to be charged in Costa Rica as a tax on accommodation services provided through the Airbnb platform and other similar platforms was finally removed from the bill being discussed in the Legislative Assembly.

Bill 20.865 for the regulation of non-traditional hosting and its intermediation through digital platforms, which is discussed in the Legislative Assembly and determines the taxes to be charged for the activity, will be modified by the Economic Affairs Commission.

Airbnb Wants to Pay Taxes in Costa Rica

December 2016

The company's proposal states that in just two months it could start making tax payments, putting to the test the responsiveness of bureaucracy against the speed of the real economy.

Airbnb, one of the leading global companies that is taking advantage of the momentum that the technological revolution has provided to the collaborative economy, has now created a housing supply available for seasonal rental in Costa Rica which is equivalent to 18% of the supply of hotels. 

Hotels are Losing War On Holiday Rentals

October 2016

In Costa Rica the total amount of accommodation available for rent through the web platform Airbnb is now equivalent to 18% of the hotels in the country.

The figure has been confirmed by the union of hoteliers, who say there is now a total of 11,000 homes offering accommodation for tourism through Airbnb. On top of this data there are also residences rented to tourists through other platforms such as Homeaway or VRBO.

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