Vacation Rentals to pay same taxes as hotels in Costa Rica

This was written today in www.InsideCostaRica.com , This is a law that if passed will be extremely difficult to enforce and Real Estate for condos in such towns as Playa Tamarindo and Playas del Coco will then possibly have less value.

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August 5th, 2013 (InsideCostaRica.com) Private homes and condominiums that are rented as vacation homes will have to begin paying the same taxes and fees as are imposed on hotels.

The measure will be imposed by the Costa Rica Tourism Institute (ICT) as a palliative measure against the downward trend in hotel occupation, which hotel operators blame on vacation rentals.

According to the director of the Costa Rican Chamber of Hotels (CCH), Flora Ayub, the regulation is ready and only requires the signature of President Laura Chinchilla to be published in the official Gazette, meaning the measure should come into effect in the coming months.

Ayub said vacation rentals constitute unfair competition because they operate at a lower cost and are not forced to pay the same taxes and fees as hotels.

Additionally, hotels are forced to pay for electricity at the “industrial rate,” which is significantly higher than on private residences used as vacation rentals.

In addition, vacation rentals are not required to carry a health permit, meaning should a grievance or complaint arise; it is difficult for customers to recover damages.

“We are not opposed to the [vacation rental business], what we want is that the rules are the same, that they have the same obligations as us,” Ayub said.

 


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