Vacation Rental Regulations in Costa Rica: What Property Owners Need to Know

Costa Rica’s short-term rental market has grown enormously over the past decade. Beautiful properties in Guanacaste, Manuel Antonio, the Central Valley, and beyond are attracting travelers from around the world through platforms like Airbnb, Vrbo, and Booking.com.

But with that growth has come increased regulation. If you own property in Costa Rica and want to rent it to guests, there are specific permits, licenses, and tax obligations you need to be aware of. This guide walks you through the current regulatory landscape so you can understand what’s required.

Legal Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified Costa Rican attorney or tax professional before making decisions about your property.

The Foundation: Law 9742 (The Non-Traditional Accommodation Law)

The cornerstone of Costa Rica’s short-term rental regulations is Law 9742, officially called the Law for the Regulation of Non-Traditional Accommodation through Digital Platforms. Passed in 2019, this law established a formal framework for properties rented through platforms like Airbnb and Vrbo.

Under Law 9742, anyone offering a property for short-term tourist rentals must register with the Costa Rican Tourism Institute (ICT) and comply with tax obligations. The law applies to both natural persons (individuals) and legal entities (corporations or LLCs) that offer accommodation services.

The key principle is straightforward: if you’re renting your property to tourists for periods between 24 hours and one year, you fall under this regulatory framework.

ICT Registration: The Non-Traditional Rental Registry

One of the most important requirements under Law 9742 is registration with the ICT’s Non-Traditional Rental Registry. This is not optional. Operating without registering constitutes illegal operation under the framework law.

How Registration Works

The registration process is completed online through the ICT’s digital platform. Here’s what’s involved:

Submit your application through the ICT’s online portal with your property details
Provide required documentation, including your property deed (consistent with the National Registry), identification, and proof of ownership
Receive an inscription resolution and a unique user code from the ICT upon approval

Once registered, you must keep your record updated within one month of any change to your property or rental status. The ICT maintains a public, searchable registry, which means anyone (including tax authorities) can verify whether your property is properly registered.

What Happens If You Don’t Register?

The ICT shares registry data electronically with the Tax Administration (Ministerio de Hacienda) for enforcement and tax control. Operating without registration exposes you to sanctions from multiple agencies, including the Tax Administration, the Ministry of Health, your local municipality, and potential penalties related to tax evasion.

Tourism Licensing and the ICT Operating Permit

Beyond basic registry enrollment, vacation rental properties that rent for fewer than 30 days require a special operating permit from the ICT. This tourism license signals to guests and authorities alike that your property meets the standards required for short-term tourist accommodation.

Required Documentation

The operating permit application typically requires:

Property deed registered with the National Registry
Municipal use permit (patente) from your local municipality
Proof of property insurance with minimum coverage of $50,000
Tax registration showing active taxpayer status

Missing any of these documents can delay your approval by two to three weeks, so it’s worth gathering everything before you begin the process.

Municipal Requirements: The Patente

Depending on the canton (municipality) where your property is located, your short-term rental activity may be classified as a commercial service. In these cases, you’ll need a municipal business license, known as a patente.

How Municipal Requirements Vary

Costa Rica has 82 cantons, and requirements can differ significantly from one to the next. Popular tourist areas like Santa Cruz (which covers much of coastal Guanacaste), Garabito (Jacó), and Aguirre (Manuel Antonio) tend to have more established frameworks for vacation rental licensing.

Some things to keep in mind:

Application process varies by municipality but generally requires proof of ICT registration, property ownership documents, and a health permit
Annual fees are typically calculated as a percentage of your rental income or property value
Zoning restrictions may apply. Some residential zones limit or prohibit commercial activity, including short-term rentals. Check your property’s zoning designation (uso de suelo) with the local municipality before investing in a rental setup
Renewal requirements exist in most municipalities, so a patente isn’t a one-time effort

Operating without a patente where one is required can lead to local fines, closures, or enforcement actions. Since the rules vary by location, confirming requirements with your specific municipality is essential.

Tax Obligations for Short-Term Rental Owners

Tax compliance is one of the most significant areas of regulation for vacation rental owners in Costa Rica. The government has been steadily increasing oversight, and new reporting rules that took effect in 2025 have made compliance more important than ever.

Registration with the Tax Administration

Every host or owner offering short-term stays must register with the Tax Administration (Ministerio de Hacienda) as a taxpayer. You’ll need to activate the correct economic activity (short-term rentals) using the D-140 registration form through the Hacienda’s virtual platform.

This applies to both individuals and companies. From the moment you register, you’re required to:

Issue electronic invoices (factura electrónica) for all rental income
Maintain income and expense records
File monthly VAT returns where applicable
Submit your annual income tax return

Income Tax

Rental income in Costa Rica is subject to progressive income tax rates. For individuals, rates range from 0% to 25% depending on total income. For legal entities (corporations), the standard corporate tax rate is 30% on net income. Reduced rates of 5% to 15% apply only to small businesses with annual gross income below approximately 122 million colones (about $200,000 USD).

A few specifics worth noting:

The tax-exempt threshold is approximately 4.1 million colones (roughly $7,500 USD) for individuals
The Costa Rican tax year traditionally runs from October 1 to September 30 (some sources indicate this may vary—confirm current requirements with Hacienda)
Quarterly estimated payments are due at the end of March, June, September, and December
You must file Form D-125 monthly declarations even during periods with zero rental income
Late payments trigger 1.5% monthly interest charges that compound, with penalties reaching up to 50% of the original amount within twelve months

The 12.75% Tax on Short-Term Rentals

Short-term rentals under 30 days are subject to a 12.75% tax on gross rental income. This tax has existed since 2019 under the Real Estate Capital Gains Tax framework, but starting in 2026, platforms like Airbnb and Vrbo will be required to withhold this 12.75% directly from host payouts and remit it to the Tax Administration.

Until now, property owners were responsible for declaring and paying this tax themselves, but enforcement was inconsistent. The 2026 change means the tax will be collected automatically at the source—essentially, platforms will handle the withholding for you. The 12.75% is calculated on your gross revenue (before deducting expenses), so even if you have a loss in a given period, the withholding still applies.

Municipal Property Tax

All property owners in Costa Rica pay an annual property tax of 0.25% of the registered property value. Properties valued above approximately 145 million colones (around $265,000-$280,000 USD, though thresholds vary by year and source—some cite 126M to 150M) are also subject to an additional luxury tax (impuesto solidaria) that ranges from 0.25% to 0.55%.

Many municipalities offer a 10% discount for annual payments made in January, which is worth taking advantage of.

New Platform Reporting Rules (2025)

Under Resolution MH-DGT-RES-0025-2024, digital platforms that list or process payments for short-term rentals must now verify host information and submit annual reports to the Tax Administration. This means platforms like Airbnb will cross-check your personal and property details against public records.

Key points about these new rules:

Platforms must collect your full legal name, primary address, Costa Rican taxpayer ID (NITE/DTI), date of birth (for individuals) or registration date (for companies), and property details
All information must be consistent with the National Registry
Platforms report to the Tax Administration by January 31 of the year following the activity
Penalties for platforms that fail to report include fines of 2% of prior-year gross income, with a minimum of 3 base salaries and a maximum of 100 base salaries

The practical impact is clear: the days of informal, under-the-radar rental income are over. The Tax Administration now has sophisticated tools to cross-reference platform data with individual tax filings.

Zoning and Land Use Considerations

Before setting up a vacation rental, it’s important to verify that your property’s zoning designation allows short-term rental activity. Costa Rica’s regulatory plan (plan regulador) varies by municipality and dictates what types of activities are permitted on different parcels of land.

Properties in designated residential zones may face restrictions on commercial activity, which can include vacation rentals. Some areas within the Maritime Terrestrial Zone (Zona Marítimo Terrestre) along the coast have additional regulations through concession agreements that may limit rental use.

If your property is part of a condominium or homeowners’ association (HOA), the community bylaws may also restrict or regulate short-term rentals. It’s worth reviewing these documents carefully before listing your property.

Putting It All Together: A Compliance Checklist

Here’s a summary of the key regulatory steps for operating a vacation rental in Costa Rica:

Register with the ICT through the Non-Traditional Rental Registry
Obtain the ICT operating permit (for rentals under 30 days)
Get your municipal business license (patente) if required by your canton
Register as a taxpayer with the Ministerio de Hacienda using Form D-140
Verify your zoning allows short-term rental activity
Set up electronic invoicing and monthly tax filing
Maintain property insurance with minimum $50,000 coverage
Keep all records updated and report any changes within the required timeframes

Why Professional Management Makes a Difference

Navigating these regulations on your own is entirely possible, but it requires time, attention to detail, and often Spanish-language proficiency for interacting with government portals. Many property owners in Costa Rica find that working with a professional property management company simplifies the process considerably.

A good property manager handles not just guest communication and maintenance, but also regulatory compliance, tax filing, and municipal licensing. Understanding your tax obligations is essential — our Costa Rica rental income tax guide explains what property owners need to know about income tax rates, VAT/IVA requirements, and filing deadlines. If you’re exploring your options, our property management services cover the full spectrum of what’s needed to keep your rental compliant and profitable. And if you’re just beginning to evaluate management companies, our guide on choosing a property manager in Costa Rica is a helpful starting point.

The Regulatory Landscape Is Evolving

Costa Rica’s vacation rental regulations have become significantly more structured over the past few years, and the trend points toward continued formalization. The 2025 platform reporting rules and the phased implementation of new registration requirements through 2026 signal that the government is serious about bringing the short-term rental market into full compliance.

For property owners, staying informed and proactive is the best approach. The regulations exist to create a more transparent, fair market, and properties that operate within the rules tend to perform better over time.

Remember: This guide is for informational purposes only and does not constitute legal or tax advice. Consult a qualified Costa Rican attorney or tax professional for guidance specific to your situation.

Sources: Law 9742 (Ley para la Regulación del Hospedaje No Tradicional); Costa Rican Tourism Institute (ICT); Resolution MH-DGT-RES-0025-2024 (Ministerio de Hacienda); Dentons Costa Rica (2021); Quatro Legal (2025).