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Are You Breaking Costa Rica’s Short-Term Rental Laws Without Knowing It?

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By: OSA Property Management

Are you unknowingly breaking Costa Rica’s rental laws? Many property owners operate short-term rentals without realizing they’re violating local regulations.

At Osa Property Management, we’ve seen the consequences of non-compliance firsthand. This post will guide you through the key legal requirements, common violations, and how to stay on the right side of the law.

What Are Costa Rica’s Short-Term Rental Laws?

Costa Rica’s short-term rental laws present a complex landscape for property owners. In 2019, Law No. 9742 established a framework for non-traditional accommodations, applying to rentals under one year and regulating the vacation rental market.

Licensing and Registration Requirements

Property owners must obtain proper licenses to operate legally. The Costa Rican Tourism Institute (ICT) mandates all short-term rental properties to register and secure a tourism license. This process requires owners to fill out an electronic form (in Spanish only) available at www.ict.go.cr and include information such as the property details.

Local municipality registration is also necessary. Each area may have specific requirements and fees. Popular tourist destinations like Jaco or Manuel Antonio often require special licenses for short-term rentals. Non-compliance can result in substantial fines or property closure.

Tax Obligations for Short-Term Rentals

Tax compliance is essential for short-term rental owners. As of 2025, the first 3.8 million colones (about $7,600 USD) of annual rental income is tax-exempt. Income beyond this threshold faces progressive tax rates from 10% to 25%.

Short-term rentals (less than one month) now incur the standard 13% Value Added Tax (IVA), while long-term residential rentals remain exempt. Owners must file monthly income declarations (Form D-125) and meet quarterly tax installment deadlines. Neglecting these obligations can lead to severe penalties and legal issues.
Zoning and Property Use Restrictions

Zoning laws significantly impact short-term rental operations. Properties in Costa Rica typically fall under residential or commercial zoning. Residential zones often impose stricter limitations on short-term rentals, while commercial zones offer more flexibility.

Some areas, particularly in tourist hotspots, have specific zones for vacation rentals. Property owners should check with local authorities about zoning restrictions before starting a short-term rental business. Operating in a non-approved zone can result in fines and forced property closure.

Understanding and complying with these laws allows property owners to operate successful and legal short-term rentals in Costa Rica’s thriving tourism market. However, the complexity of these regulations often leads to unintentional violations. Let’s explore some common mistakes property owners make and their potential consequences.

Common Rental Law Violations in Costa Rica

Costa Rica’s rental laws present a complex landscape, and many property owners unknowingly violate them. These violations can lead to severe consequences, impacting both business operations and legal standing. Let’s explore some of the most frequent infractions and their potential repercussions.

Unlicensed Operations

One of the most common violations involves operating without proper licenses. The Costa Rican Tourism Institute (ICT) requires all short-term rental properties to register and obtain a tourism license. Additionally, local municipalities often have their own registration requirements. Failure to secure these licenses can result in hefty fines and even forced closure of properties.

In popular tourist areas like Jaco or Manuel Antonio, operating without a special short-term rental license can lead to penalties of up to 10 times the cost of the license itself. Properties have been shut down during peak tourist seasons, resulting in significant financial losses for owners.

Unreported Rental Income

Another frequent violation involves the failure to report rental income accurately. As of 2025, the first 3.8 million colones (approximately $7,600 USD) of annual rental income is tax-exempt. Many property owners, especially those new to the market, neglect to file monthly income declarations using Form D-125 or miss quarterly tax installment deadlines.

The Costa Rican tax authority (Dirección General de Tributación) has increased its scrutiny of short-term rentals. In a recent crackdown, they identified over 500 properties with unreported income, resulting in back taxes and penalties totaling millions of colones.

Health and Safety Violations

Ignoring health and safety standards not only endangers guests but can also lead to severe legal consequences. Costa Rica’s Ministry of Health conducts regular inspections, especially in tourist-heavy areas. Common violations include lack of fire safety equipment, inadequate sanitation facilities, and failure to maintain proper waste management systems.

A recent case in Guanacaste saw a property owner face fines of over $5,000 USD and a temporary closure order for multiple safety violations, including non-functional smoke detectors and inadequate emergency exits.

Zoning Infractions

Operating a short-term rental in a non-approved zone constitutes a serious violation that often goes unnoticed until it’s too late. Some residential areas prohibit or severely restrict short-term rentals. For instance, certain parts of San José only allow short-term rentals in buildings specifically zoned for such use.

Violating zoning laws can result in daily fines, forced eviction of guests, and even legal action from neighbors or homeowners’ associations. In extreme cases, property owners may need to convert their property back to residential use, incurring significant costs.

The consequences of these violations can be severe and long-lasting. Fines can range from a few hundred dollars to tens of thousands, depending on the nature and duration of the violation. Repeat offenders may face criminal charges and permanent bans from operating rental properties.

Moreover, violations can damage reputations in the rental market. Many booking platforms now require proof of legal compliance, and negative reviews from guests who discover they’re staying in an illegal rental can devastate a business.

Navigating these complex regulations challenges many property owners, especially those unfamiliar with Costa Rican law. This complexity underscores the value of partnering with professional property management companies that stay up-to-date with changing regulations and ensure full compliance. Such partnerships allow property owners to focus on growing their rental business without legal worries, setting the stage for our next discussion on how professional management can safeguard your investment.

How Professional Management Ensures Legal Compliance

At Osa Property Management, we have developed a comprehensive approach to navigate Costa Rica’s complex rental laws. Our 19 years of experience have taught us that compliance isn’t just about avoiding fines-it’s about building a sustainable, profitable rental business.

Navigating the Licensing Process

Securing the right licenses is essential, but it often confuses property owners. We have streamlined this process by maintaining strong relationships with local municipalities and the Costa Rican Tourism Institute (ICT). Our established channels help property owners reduce license acquisition time significantly.

We don’t just file paperwork-we anticipate potential issues. When stricter zoning regulations are introduced, we proactively adjust our clients’ rental strategies to prevent disruptions to their income streams.

Mastering Tax Compliance

Tax laws for short-term rentals in Costa Rica present numerous challenges. We use a system that tracks rental income in real-time, which ensures accurate monthly declarations. This approach helps our clients avoid potential fines and stay compliant with tax regulations.

We also stay ahead of tax law changes. When new taxes (such as the Value Added Tax) apply to short-term rentals, we immediately adjust pricing strategies. This helps our clients maintain profitability without violating new regulations.

Prioritizing Guest Safety and Property Maintenance

Regular property inspections fulfill legal requirements and are essential for guest satisfaction and long-term profitability. Our team conducts monthly inspections and addresses potential issues before they become costly problems.

We partner with local safety experts to ensure all properties meet the latest standards. This approach helps our clients achieve high pass rates on health and safety inspections (often exceeding regional averages).

Staying Informed on Regulatory Changes

Costa Rica’s rental laws evolve constantly. We dedicate resources to monitor these changes and understand their implications for property owners. This proactive approach allows us to implement necessary adjustments quickly, keeping our clients’ properties compliant and profitable.

Professional property management isn’t just about convenience-it’s a strategic investment in your rental business’s long-term success and legal compliance. By maintaining high standards and staying ahead of regulatory changes, we allow property owners to focus on providing exceptional experiences for their guests and maximizing their returns.

Final Thoughts

Costa Rica’s rental laws present challenges for property owners, but compliance protects investments and enhances guest experiences. Professional property management companies offer expertise in navigating these complex regulations, saving time and reducing stress. These experts handle licensing, registration, tax compliance, and ensure properties meet health and safety standards.

Osa Property Management brings 19 years of experience in Costa Rica’s rental market. Our team understands local regulations and helps optimize property performance while maintaining compliance. We provide comprehensive services tailored to specific needs, from marketing to maintenance and financial management.

Successful property management in Costa Rica balances profitability with legal compliance and community respect. The right partner (like Osa Property Management) can help achieve this balance and maximize your Costa Rican property investment. Our expertise in areas such as Tarcoles, Jaco, Dominical, Manuel Antonio, Ojochal, and Uvita ensures capable handling of your property, regardless of location.

For more details on verifying your property and staying compliant with Costa Rica’s evolving STR regulations, visit BRNX Travel’s Compliance/Verified? – BRnX Travel to see how we help hosts meet legal standards before going live. 

Colorado short-term rental owners, advocates rally against “heavy-handed regulation” from lawmakers

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Author: Jason Blevins

Colorado is the birthplace of short-term rentals. And the state is ground-zero for local regulation of the booming industry.

After several years of reactive, defensive responses to increased regulation and taxation legislation, the state’s short-term rental owners and managers are organizing with an educational campaign and lawmaker lobbying plans. Colorado House Speaker Rep. Julie McCluskie, a Democrat from Dillon, earlier this month warned that short-term rental legislation “is highly likely” in either the special session or next year’s session. 

“We know that short-term rentals have become a significant part of the guest experience,” she said at a rally of short-term rental owners, managers and representatives from Vrbo in Silverthorne last week. “In order for our tourism economies to thrive, we need short-term rentals in places where the world wants to be.”

With no short-term rental legislation in this week’s special session where lawmakers hammered out a plan for property tax relief, “it does feel like we dodged a bullet,” said Julie Koster, the executive director of the Colorado Lodging and Resort Alliance and the Summit Alliance of Vacation Rental Managers. 

Property owners and short-term rental advocates are planning to lobby and court policymakers heading into next year’s legislative session, hoping to stifle increased limitations on vacation rentals. Earlier this year, as the legislature debated Senate Bill 33 — legislation that would have quadrupled property taxes on vacation rental homes — McCluskie fielded more than 2,000 emails from constituents in one week. The third-term representative said she has never received so many emails.

She urged the short-term rental advocates gathered inside the Silverthorne Pavilion earlier this month to reach out now to lawmakers and share data — not just anecdotes — about vacation homes that rent to visitors. 

“Short-term rentals are the new frontier for how we experience life. People are letting go of buying things and they are embracing ‘What happened to me yesterday,’” she said. “How do we ensure that there are short-term rentals available? How do we find balance?”

Balance is the top talking point for owners and managers who rely on vacationers renting private homes. The owners on Tuesday discussed the need for all owners to pay lodging taxes and comply with local regulations as they lobby local and state lawmakers to steer clear of what they call “heavy-handed regulation.”
Senate Bill 33, which was voted down by the Senate Finance Committee, posed “an existential crisis” for the short-term rental industry in Colorado, said Tim Rosolio, who heads up vacation rental partnerships for Vrbo parent the Expedia Group. 

“In Colorado, we kind of got to the brink there,” he said.

The crackdown on short-term  rentals in cities like New York, Chicago and San Francisco is spilling into resort markets and it’s important that owners and managers organize to help build rules that protect the industry while alleviating concerns from neighbors and contributing revenue to housing challenges. 

“The answer is not ‘no regulation,’ Rosolio said. “It’s important for us to land on something that is balanced … while making sure that we understand what a big economic driver short-term rentals and tourism are for the community.”

Tourism slowdown in 2024 

Colorado overnight visitors spent $6.3 billion on lodging in 2023, generating $1.8 billion in local and state tax revenue and supporting 9,450 jobs. Visitors spent $28.2 billion in total in 2023 and vacationers who rented privately owned homes spent $4.1 billion.

In nine Western Slope mountain counties anchored by ski areas, visitors in short-term rental homes and condos — not hotels and motels — spent $1.2 billion in 2023, up from $1.1 billion in 2022 and 2021. That compares to $2.3 billion spent on traditional hotels and motels in 2023 and 2022. 

Since 2019, the number of vacationers renting private homes has increased by 27%. 

The taxes generated by tourism in Colorado equate to about $308 per resident. But in places like Summit County, the $96.3 million in state and local taxes paid by tourists in 2023 equals more than $3,150 per resident. 

The Colorado Tourism Office collects annual spending figures and shares that data far and wide. That is part of the office’s mission to empower local communities so they can share their own plans for balancing the quality of life for local residents with tourist-based economies. 

“What is the value of tourism? Where are you on the tourism cycle in your communities” said Colorado Tourism Office boss Tim Wolfe, who says the revival of international tourism is a key component for sustainable visitation in high-profile destinations like metro Denver and Summit County. He’s seeing more communities backing away from intense regulation of short-term rental properties as visitation and lodging tax collections ebb in the first half of 2024. 

Proposition 123, passed by voters in 2022, last year directed $80 million toward affordable housing across the state. That river of revenue is flowing again this year as more housing plans unfold, Wolfe said. 

“Are we giving this a chance to take root or are we going to pass three more things before this actually has a chance to take root and start generating housing,” Wolfe told the vacation rental advocates, urging a wariness of statewide regulation that could slow the flow of tourists into Colorado. “We have to be careful. If we make dramatic changes this (slowdown in visitation) could continue to accelerate.”

Hundreds of property owners and managers have united as part of the Colorado Lodging Resort Alliance, which rallied dozens of advocates to urge opposition to Senate Bill 33 earlier this year. 

The group is again rallying its troops to thwart legislation that could impact vacation rentals. The Colorado Association of Ski Towns advocating for legislation that would enable local communities to ask voters to approve a tax on vacant homes that could include properties that are rented to vacationers. Another proposal by Colorado Counties Inc. would raise the cap on lodging taxes levied by counties to 6% from 2%, just like Colorado municipalities. 

“This could give counties the opportunity to increase revenue for advertising and marketing local tourism, housing, childcare services, and facilitating and enhancing visitor experiences benefiting their county residents,” reads a legislative position statement from Colorado Counties Inc. 

“There are some scary things out there looming around on the horizon,” Koster said.

Visit Compliance/Verified? – BRnX Travel to get your compliance check today.

indicted in $8.5 million Airbnb, Vrbo scam linked to 10,000 reservations across 10 states

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Author: Cara Tabachnick

Two men were indicted by a federal grand jury as the masterminds behind a vast online rental properties scam that raked in more than $8.5 million, and was linked to 10,000 reservations across 10 states, the U.S. Department of Justice announced Thursday. 

Shray Goel, 35, of Miami, and Shaunik Raheja, 34, of Denver, operated a short-term house rental business used to defraud Airbnb, Vrbo and guests renting properties through those platforms, according to the indictment. Goel was initially charged on Dec. 13, but Raheja was added to a superseding indictment on Wednesday, which also alleged the short-term rental property scam included discrimination against Black people.

When guests searched for rental housing in these areas, they found multiple listings of Goel and Raheja’s properties as the business would run “secret bidding wars,” the indictment said.  Operators used fake host names, and in certain instances, other people’s identities, to list properties. 

Goel, Raheja and others who worked with them are alleged to have owned and leased properties throughout the U.S. for the rental business, including properties in Los Angeles, Denver, Chicago and Savannah, Georgia. By 2019, the business managed almost 100 properties across the United States.

Some renters who believed they booked a property would at the last minute receive a cancellation with “bogus last-minute excuses,” the indictment said. These guests would be steered to inferior rental properties, still paying the same prices. 
These “bait and switch” methods allowed Goel and Raheja to keep their properties full at the highest listed prices possible, the indictment said. Operators also tried to avoid renting to guests they perceived were Black, the indictment said. 

“The conspiracy charge alleging that the defendants discriminated against potential renters based on their skin color is a reprehensible abuse which must not be tolerated in the United States,” said Donald Alway, the assistant director in charge of the FBI’s Los Angeles field office.

In 2023, Airbnb said it removed 59,000 fake listings and prevented another 157,000 from joining the platform. The company said it planned to use AI to verify listings in its top five countries, which are the U.S., the U.K., Canada, France and Australia. 

Airbnb and Vrbo are cooperating with the government in the investigation, the Department of Justice said. 
The indictment charges Goel and Raheja with conspiracy to commit wire fraud and 13 counts of wire fraud. Goel is also charged with two counts of aggravated identity theft.

The conspiracy and wire fraud charges each carry a statutory maximum penalty of 20 years in federal prison. There is a two-year mandatory consecutive sentence for the counts of aggravated identity theft.

Get your free compliance check today at Compliance/Verified? – BRnX Travel. 
Verification is peace of mind—for you and your guests. 

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