Costa Rica’s recent overhaul of its tax laws contains one important provision that affects anyone who benefits from rental income, including property owners who work with Special Places of Costa Rica.
Under the old rules, expenses such as maintenance were deducted from rental income, and taxes were paid on the difference. These taxes were based on net income at various percentages listed in tables published by the Directorate General of Taxation (Dirección General de Tributación).
Also, under the old system these taxes were paid only once a year.
The new system is arguably simpler but not necessarily easier. It assumes that in all cases, expenses total 15% of rental income, so it imposes taxes only on the remaining 85%. And it imposes a flat rate of 15% on that 85%, eliminating the various tax rates under the old system.
Some call this the 15/15 tax, because you deduct 15% of rental income and pay 15% on the rest.
When to pay Costa Rica rental income taxes
In addition, the new system requires filings and payments once a month rather than once a year. But it eliminates the need to file a traditional income tax return because there is no need to list expenses.
There’s one wrinkle to complicate matters just a bit more: whether the property owner has at least one employee (like a housekeeper or a watchman). Property owners with no employees must choose the new system, paying 15% on 85% of their income every month.
So here’s the wrinkle: Property owners with at least one employee can choose between the new system and the old system! Obviously, it’s a complicated calculation to determine which option is best, and it’s not a decision to be made without the advice of a good accountant or tax lawyer.
We at Special Places of Costa Rica have a team of accountants and lawyers to keep us abreast of rapidly changing tax laws, and we are able to put their expertise at your disposal. If you have any questions about your obligations to pay tax on rental income, please feel free to contact us.
Special Places is located within the beautiful coastal resort town of Flamingo, in the province of Guanacaste, Costa Rica. With over 15 years of service dedicated to the rental and property management profession, we have an extensive list of rentals in the Flamingo, Potrero, Brasilito and Tamarindo Beach area. Whether looking to plan your next tropical vacation or searching for someone to manage your home, our goal is to provide our clients with the most efficient and personable service in the area.
** In accordance with public health recommendations, Special Places continues to work hard to keep our guests safe. These protocols include enhanced cleaning and disinfection procedures for all properties under management **
We are very proud of our professional maid service staff, who provide regular cleaning for some 150 properties — and do it with a smile. A half-dozen maids provide full-time service at a single house, but all the rest rotate among a wide variety of properties from Matapalo to Playa del Coco.
Maids are responsible not just for cleaning but for staging the house, with everything in its proper place, and keeping track of inventory (so that, for example, new clients don’t check in and find there’s no toilet paper). At times, say on Jan. 2, there are so many checkouts and check-ins that the maids bring their sisters, brothers and mothers to get all the work done.
Full-time maids assigned to a single property assist clients with shopping, cooking and laundry, and they often form close bonds with clients. It’s no surprise that our clients often want to take their maids home with them.
Special Places of Costa Rica employs two full-time maintenance men who service all our properties, plus a handful of caretakers dedicated to a single property each.
These men will fix just about any problem that arises — leaks, electrical and plumbing issues, a door that scrapes on a floor, a noisy ceiling fan… you name it. They also paint homes and provide roofing maintenance.
Our maintenance staff are available 24/7 for emergencies like a burst pipe that causes a flood. Special Places of Costa Rica also enjoys a network of qualified subcontractors to handle swimming pool service, gardening / landscaping and repairs to air conditioning units & kitchen appliances.
Steven, from Potrero, is a rental agent for Special Places. He processes rental inquiries, checks on property availability, makes reservations and helps with check-in and check-out info.
Steven has worked at three hotels: as a bellman at Casa Chameleon in Las Catalinas, as a receptionist in the Sugar Beach Hotel near there, and as a receptionist at Jardín del Edén in Tamarindo. He has a bachelor’s degree in teaching English from the Universidad Latina in Santa Cruz, and someday he hopes to teach English at his old high school in Cartagena.
Steven likes to ride his Kawasaki 250 dirt bike in the Potrero Hills, around Las Catalinas and in Tempate. He’s also interested in cars and mechanics, and he’s skilled at repairing motorcycles.
Quote: “I think work is a very important tool that helps us to fulfill ourselves as human beings in life and to improve on what we already know.”
Born in Samar Province in the Philippines, Phem has a two-year degree in computer science from the Asian Institute of Computer Studies. She came to Costa Rica at age 19 to work for her aunt, who owned the Mariner Inn in Flamingo. She later worked for House of Rentals, then Special Places of Costa Rica when the companies merged. As a concierge, she books tours, rental cars, chefs or whatever clients need to make their stay enjoyable. “Whatever they request, you do it,” she said.
She enjoys “having a connection to people, meeting different people, helping people.” Her proudest accomplishment was moving from the Philippines to Costa Rica to explore better opportunities. She recommends that visitors to Flamingo try an ATV tour, a catamaran cruise, rappelling or whitewater rafting.
Quote: “I love Potrero. I live in Surfside. It’s quiet, safe, and people there are very accommodating, nice, friendly, always willing to help you. They’re open to anyone. I like that community. And the bars are within walking distance.”
Pascale, Kenny’s mother and business partner, is the head accountant at Special Places. She is responsible for all the accounting, billing and taxes, managing the maid service, setting work schedules and procuring cleaning products.
Pascale is from Antwerp, Belgium, where she and her husband had a food-service business specializing in poultry. But they often traveled to the Caribbean and Central America, and in 2009 decided to move to Costa Rica.
“We thought it was time to follow some dreams, so we sold the business and came to Costa Rica,” she said. They traveled to every corner of the country, but they fell in love with Guanacaste and decided to settle in Flamingo. They couldn’t find a house that satisfied Pascale’s handyman husband, so they built their own on the hills above Potrero in Pacific Heights.
She says her proudest accomplishment is “bringing two beautiful sons into the world.”
Quote: “The way we raised them, they were very independent. We taught them to work also. Of course, school came first. To us it’s white and black, and the gray doesn’t exist. It’s good or bad.”
Norlyng coordinates the maintenance of all Special Places properties, and she’s also in charge of Human Relations and is an assistant to Kenny Segers.
Born in Limón but a longtime resident of Matapalo, she previously worked as a receptionist at the Best Western Seis Playas Hotel. She also spent six years at the Wyndham Tamarindo, working as head of reception and as an administrative assistant.
Norlyng studied law for a year and a half at the University of Costa Rica in Liberia, but currently she is more focused on tourism. She is married and has two daughters, ages 9 and 2. Her interests include reading (the Bible, inspirational works and finance) and going to relaxing places.
Quote: “My philosophy of life is to live in the present and try not to worry about the future, to have clear objectives, to try not to stress too much and to act in the present.”
A native of Brasilito, Karolayn has a bachelor’s degree in accounting from the Universidad Latina in Santa Cruz. She is responsible for the billing, accounting and filing at Special Places.
She enjoys hiking and swimming, and her favorite local places are Playa Danta and Playa Conchal. Asked what activity she would recommend to visitors, she said riding a Banana Boat, an inflatable, banana-shaped boat towed behind a speedboat.
Quote: “The working environment here is very nice, very tranquilo. We get along really well, the management, the coworkers, and also the maids and maintenance people. Also, in my job I’ve learned a lot of things that in university classes they don’t teach. It gives you the opportunity to learn and grow.”
A native of Antwerp, Belgium, Kenny emigrated to Costa Rica in 2008. Having graduated from high school in Belgium, he studied economics and business administration in Costa Rica. Eager to go into business, Kenny left university to work as a property manager for House of Rentals in Flamingo, which he acquired not long after starting the job. House of Rentals grew into Special Places of Costa Rica, currently represented by offices in Playa Flamingo and Playas del Coco, and known as one of the leading agencies in the area.
Kenny speaks and writes fluent Spanish, English and Dutch. He is the proud father of a Costa Rican son, Khael, who was born in 2016.
Passionate about his growing vacation rental and management business, Kenny is always looking for investments and opportunities. Hotel Pitaya Lodge (formerly Kakaos Lodge) is also under his management.
In 2020, he began building the first of several homes as part of a newly launched project development/construction company.
Juan Carlos works as a rental agent, attending to any questions about renting a property, explaining the options available, answering any questions and supporting the concierge team in extra services like tours or transport.
Juan Carlos was born in San José and currently lives in Potrero. He has worked for some 15 years in sales or customer service at hotels, including the Hotel Barceló in San José, the Hotel Parador in Manuel Antonio and the Lagarta Lodge in Nosara.
He also studied English at the Instituto Norteamericano in San José, earning a C2 certification in English. He has also taken several courses in administration.
Juan Carlos likes walking on the beach (“so I’m definitely in the right place”) with his French bulldog. “They’re very mischievous but very sweet, very good company.”
Quote: “I always say, ‘It costs nothing to smile.’ I always like to convey that people should be happy no matter what.”
Juan Diego, who was born and raised in Villarreal, works as a concierge. That means he helps visitors arrange tours and transportation, rental cars, airport pickup and dropoff, and other services.
Juan Diego studied sustainable tourism management at UNED, the Universidad Estatal a Distancia, where he received a bachelor’s degree in 2013. He has worked as an admin for the Dream Chaser catamaran in Tamarindo, as a receptionist at the Hotel Pasatiempo in Tamarindo, and as a concierge at the Hotel Dreams Las Mareas in El Jobo.
Juan Diego enjoys watching HBO series and movies, riding his bike, going out with friends and watching the sunset on the beach.
Quote: “I like concierge work because I get to help a lot of people, fulfilling the dreams of tourists who visit a beautiful country like Costa Rica that’s full of nature.”
José does property inspections, check-ins and check-outs for Special Places, making sure that properties are in great shape for new clients.
Born in Limón, he currently lives in Cartagena. He went to high school at Liceo Experimental Bilingüe de Santa Cruz, and he spent seven years working as a waiter and bartender at the JW Marriotts in Hacienda Pinilla and Reserva Conchal.
He enjoys going to the beach, listening to music, watching movies and series, playing video games and spending time with family.
Quote: “If you’re afraid of dying, it’s better not to be born.”
A native of Nicoya who lives in Cartagena, Jhon works in accounting at Special Places, calculating reservation contracts, sales commissions and billing. He has been studying accounting at the Universidad Latina in Santa Cruz for a year and a half.
His goal is to have an accounting firm of his own. His favorite hobby is artisanal fishing, usually from a boat out of Flamingo, and he once caught a 70-pound mahi-mahi. He also has caught marlin in Tamarindo and Quepos.
His greatest pride is a nearly 2-year-old daughter named Elizabeth Aitana.
Quote: “I think the most marvelous thing that’s happened to me would be the birth of my daughter. That’s the thing I’m most proud of.”
Jason is a concierge and rental specialist with an interesting job — knocking on new clients’ doors to see if they need anything or would like to book any tours or other services.
Born in Limón and currently living in Huacas, Jason speaks flawless English. He has taken some university courses on websites and social media marketing. He is married, no kids, but has a cat named Kirara.
Jason previously worked as a database analyst at Western Union in San José, typically addressing charge-backs on credit cards and resolving other monetary issues.
Jason loves “adrenaline,” muddy offroad adventures, motorcycling, ATV, video games, surfing and skateboarding.
Quote: “You don’t have to be the smartest person to fulfill your dreams, all you need is to put in a little effort and be certain that you will achieve whatever you set your mind to.”
Gabriel joined Special Places as an accounting assistant at the age of 20. He was born in Liberia and currently lives in Filadelfia with his family.
He studied at the Colegio Técnico Profesional de Carrillo, with a specialty in accounting and auditing. He worked previously as an accounting assistant and secretary for a clinic in Palestina de Belén that serves disabled people.
Gabriel enjoys mountain biking, and for the past eight years he has volunteered at the Red Cross in Filadelfia, working mostly in strategic communication.
Quote: “We never have to give up on a dream just because of the time it takes to achieve it.”
Daniela works as an administrative assistant in Human Resources, helping with payroll, health benefits and insurance, as well as onboarding new personnel.
Born in Liberia, she now lives in Villarreal, and she not only has two dogs but also a horse. She adores animals and loves to go horseback riding in the country. She also likes listening to Latin music like cumbia and salsa.
Daniela has a bachelor’s degree in business administration from the Universidad Libre de Costa Rica (ULICORI). Before coming to Special Places, she worked as an HR assistant at the Occidental Hotel in Tamarindo, where she learned a lot about Human Resources in a real-world environment.
Quote: “Take risks, because everything good starts with a little fear!”
Carla works as an accounting assistant at Special Places and is also involved in property management.
She was born in Caracas, Venezuela, and raised in Ciudad Guayana, where she earned a law and accountant degree and worked as a lawyer and accountant. Since coming to Costa Rica, she has worked as a manicurist, masseuse, bartender, waitress and artist.
A gifted artist and something of a Renaissance woman, Carla also draws and makes earrings, necklaces, and bracelets. Her varied interests include dancing, hiking, scuba diving, traveling and discovering new cultures.
Quote: “My motto is ‘I know that I own the weak and fragile body of a woman, but I have the heart and stomach of a king.’ ”
This property is not managed by Special Places of Costa Rica.
Accordingly, rental rates and availability for this property might not be current. Please submit an inquiry and will be be happy to verify the details and assist you with your booking.
Apart from doing tax fillings do i need my accountant to do financial statements. I have only one rental property
Hi. In addition to paying the 15/15 CR tax on my rental income from the property in CR… do I also have to report that income back home in the US (where I mostly live) and pay a US tax too (e.g. double taxed by CR and the US)? Thank you! Jeff
Jeff, it’s a good question, and I don’t know the answer, but I would hope not! I would suggest consulting with a tax attorney or accountant on this. Or maybe someone else who monitors this page can answer.
If my rental income does not touch Costa Rica banking for example my renters pay me directly to a Canadian bank account. Am I liable for Costa Rica income tax? How would they track it? Or is it on a goodwill basis?
Hi! As the economic activity is being done in Costa Rica, it should be declared in Costa Rica. But as you say, on a good will basis.
I’f we use a booking agency and management company who collects the rental revenue then deducts their fees before paying us the owners., what is taxed as income? What the renters pay or what we we the owners receive? Thanks!
Does the 15/15 tax apply if the property is owned by a Costa Rican corporation?
this would apply if the property is owned by a corporation or under personal name. There is no difference!
Hi Karl, Nice piece on rental taxes! I am wondering if residential rentals in Costa Rica are considered under law a commercial activity?