Law Proposal for Short-Term Rentals in Costa Rica (2019)

In 2019, the Costa Rican Congress introduced a bill aimed at regulating non-traditional lodging services, including properties offered through platforms such as Airbnb and VRBO. The Costa Rica short-term rental law proposal sought to establish a formal regulatory framework for vacation rentals while providing consumer protections for users of these services.

Scope and Application of the Proposed Law

Properties Covered Under the Proposal

The proposal intended to regulate short-term or vacation rentals across a broad range of property types, including:

• Homes and apartments

• Villas, chalets, and bungalows

• Individual rooms

• Properties that are standalone or part of multi-unit developments

The law was designed to apply regardless of whether the property was rented directly by the owner or through an online platform.

Definition of Hosts and Rental Periods

According to the bill, the Costa Rica short-term rental law proposal would apply to any individual or company (hosts) that, on a regular and for-profit basis, provides lodging services to foreign or domestic tourists for periods:

• Not exceeding one year

• Not shorter than 24 hours

Obligations Established for Hosts

Consumer Information and Contractual Transparency

Hosts would be required to provide guests with complete, accurate, clear, and objective information regarding pricing and contractual conditions. All information provided would need to be understandable and unequivocal.

Fiscal and Administrative Requirements

Under the proposal, hosts would be obligated to:

• Issue payment receipts through a digital invoice (factura electrónica)

• Register as a taxpayer with the Ministerio de Hacienda

• Pay all applicable taxes as determined by law

Tourism and Municipal Compliance

Additional obligations included:

• Registering as a service provider with the Instituto Costarricense de Turismo

• Obtaining a municipal license for non-traditional lodging

• Handling complaints and disputes through the ICT

Property Standards and Risk Disclosure

Hosts would also be required to:

• Provide the lodging service exactly as advertised

• Ensure the property offered is the same property delivered to the guest

• Inform guests of any natural risks associated with the property

Enforcement and Sanctions

If a host were to provide lodging services in violation of the proposed law, the government would have the authority to initiate legal action through competent agencies, including the Revenue Service, the Department of Health, municipalities, or other applicable authorities, depending on the nature of the noncompliance.

Legislative Status of the Bill

A Bill in Congress, Not Yet Law

As of 2019, this initiative remained a bill under discussion and had not yet been enacted into law. Costa Rica operates under a unicameral legislative system, meaning that all bills are reviewed within a single chamber.

Voting Process

The short-term rental regulation bill had already passed its first round of voting. A second round of approval was still required for it to become law. Based on legislative momentum at the time, approval appeared likely, though not guaranteed.

Identified Issues and Practical Concerns

Zoning and Municipal Licensing Challenges

One major concern with the Costa Rica short-term rental law proposal was the requirement for hosts to obtain a municipal business permit. In practice, many short-term rental properties are located in residential zones where business permits are typically not granted. As drafted, the bill could render a significant number of existing properties legally ineligible for short-term rental use.

Dispute Resolution Through the Tourism Board

Another issue involved the mandatory resolution of disputes through the ICT. While online platforms already provide dispute-resolution mechanisms accessible globally, requiring disputes to be handled through a Costa Rican agency could disadvantage foreign guests. Visitors residing abroad may lack the practical means to engage with the ICT once they have left the country.

Ongoing Monitoring

At the time, this proposal represented an important shift in how short-term rentals could be regulated in Costa Rica. Its potential implications for hosts, property owners, and foreign visitors warranted close attention as the bill advanced through the legislative process.

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