Costa Rica (CR)

Rental Deposits — Know Your Rights Under Ley de Arrendamientos

Costa Rica's rental law (Ley 7527, Arrendamientos Urbanos y Suburbanos) limits deposits to one month's rent. However, many landlords — especially in expat markets — charge 2–3 months deposit without legal justification. Additionally, leases of less than 3 years must pay 3 years of rent as a penalty for early termination unless both parties agree otherwise. Verbal agreements have no legal standing for enforcement.

⚡ Illegal deposit charged, difficulty recovering deposit, or landlord retaining deposit for damages you did not cause.

✅ Always sign a written rental contract (contrato de arrendamiento). Verify the deposit amount. Conduct a move-in inspection (Recibo del Inmueble) with the landlord and document all existing damage in writing with photos. Contracts should be registered at the Tributación Directa for best legal protection.

Tax Residency Misunderstanding — Foreign Income May Not Be Exempt

Costa Rica uses a territorial tax system: only income generated from Costa Rican sources is subject to income tax. Foreign-sourced income (e.g., a foreign salary, rent from a foreign property, dividends from foreign companies) is generally not taxed in Costa Rica. However, this does NOT mean you are automatically exempt from your home country's taxes. Many expats from the US, UK, Australia, and Canada remain tax-obligated at home even while living in Costa Rica. The US taxes its citizens on worldwide income regardless of residence.

⚡ Unexpected tax liability, penalties, and back taxes owed to home country. Possible double taxation without proper planning.

✅ Consult a tax advisor in BOTH Costa Rica and your home country before relocating. US citizens must continue filing US tax returns (FBAR, FATCA) from Costa Rica. Understand your home country's exit tax rules. The DGME's grant of residency does not create tax residency in the same way — the Ministerio de Hacienda determines Costa Rican tax status separately.

Timeshare and Vacation Club Pressure Sales

Costa Rica's beaches and resort areas are hotspots for aggressive timeshare and vacation club sales. Reps at airports, hotels, and tourist venues offer "free tours" or "complimentary breakfasts" in exchange for attending a 90-minute presentation that becomes a 4–8 hour high-pressure sales experience. The terms are complex, cancellation is difficult once signed, and the resale value of most Costa Rican timeshares is near zero.

⚡ Long-term financial commitment of $15,000–80,000, nearly impossible to exit. Annual maintenance fees of $800–2,500/year regardless of use.

✅ Never sign a timeshare contract on the day you first see it. Costa Rica law gives you a right to rescind within 3 business days of signing — use it immediately if pressured. Say no to any upfront "exit fee" offered by third parties claiming they can help you sell your timeshare.

Employer CCSS Obligation — Illegal not to Register Workers

Every Costa Rican employer — including expats who hire household workers (cleaners, gardeners, nannies) — must register those workers with the CCSS and pay employer social security contributions (approximately 26.83% of salary in 2026 after the IVM adjustment). Failure to register domestic employees is illegal. The CCSS actively investigates unregistered employment, and penalties include retroactive contributions plus 3–9 months of penalties per unregistered month.

⚡ Retroactive CCSS contributions for all unregistered periods + 3-month penalty per unregistered month + interest. Criminal charges possible for repeat offenders.

✅ Register any worker with CCSS before their first day of work at ccss.sa.cr. A domestic employee working even one day per week triggers registration obligations. Consult a Costa Rican abogado or contador (accountant) before hiring.

Aguinaldo (13th Month Bonus) — Mandatory by Law

All Costa Rican employees (including those of expat employers) are legally entitled to an aguinaldo — an additional month's salary paid between December 1–20 based on the 12-month salary average. This is not optional. It applies to domestic workers, part-time workers, and seasonal employees (prorated). Failure to pay is a criminal offence under the Código de Trabajo.

⚡ Criminal complaint, back payment with interest, and potential labour court action.

📅 Deadline: December 20 each year

✅ Budget for aguinaldo as a monthly accrual (set aside 1/12 of salary monthly). Your contador can automate this. Use the MTSS aguinaldo calculator at mtss.go.cr to calculate the exact amount.

Road Conditions — Serious Risk Outside Main Highways

Costa Rica's road network varies enormously. The Autopista del Sol, Ruta 1 (Pan-American), and Circunvalación in San José are good quality. However, many secondary roads — including routes to popular destinations like Dominical, Monteverde, Nosara, and Tortuguero — are unpaved, deeply rutted, seasonally flooded, and require 4WD. Bridges are frequently one-lane or in poor repair. Tico driving is assertive and road deaths per capita are among the highest in the Americas.

⚡ Vehicle damage, accidents, getting stranded, missed flights. In the wet season, roads can wash out completely.

✅ Use Google Maps and iOverlander for current road condition reports. Rent a 4WD vehicle for anything outside central metropolitan areas. Never cross a flooded road (aguacero) — flash floods are fast and lethal. Download maps offline before heading to remote areas where signal is absent.

Losing your Costa Rican phone number breaks bank and SINPE access

Banks, SINPE Móvil, CCSS, and Hacienda commonly rely on your local phone number for verification. Letting a prepaid line expire or changing numbers without updating banks can leave you locked out while abroad.

⚡ Cannot approve transfers, pay CCSS/Hacienda, reset passwords, or receive bank fraud alerts.

✅ Keep prepaid credit active, set calendar reminders for top-ups, and update your phone number with every bank and government portal before cancelling an old line.

Ignoring condominium bylaws and HOA fees

Condominium rules in Costa Rica can restrict pets, short-term rentals, noise, parking, renovations, guests, and pool use. HOA fees can rise and unpaid fees can create collection claims or block property sale.

⚡ Fines, neighbour disputes, legal collection, rental restrictions, and surprise ownership costs.

✅ Request bylaws, fee history, reserve-fund status, and meeting minutes before renting or buying in a condominium.

Forgetting annual compliance for an inactive SRL or SA

Inactive Costa Rican companies can still have legal-entity tax, shareholder registry, accounting, registered-agent, and tax-return obligations. Many expats create an SRL for property then ignore it.

⚡ Accumulated fines, blocked corporate actions, trouble selling property, and extra notary/accounting costs.

📅 Deadline: Review every January and before any property sale

✅ Keep a calendar with your CPA/notary. If the company is no longer needed, formally dissolve it instead of abandoning it.

Travelling with pets without SENASA re-entry planning

Importing a pet once does not solve every future trip. Airlines, transit countries, destination authorities, and SENASA can each require specific certificates and timing.

⚡ Denied boarding, quarantine abroad, refused re-entry, or emergency veterinary/document costs.

✅ Check SENASA and airline rules 4-6 weeks before travel. Confirm microchip, rabies, health certificate, and any transit-country rules before buying tickets.

Issuing services without factura electrónica when registered

Registered taxpayers carrying out taxable activities generally must issue Hacienda-compliant electronic invoices. Informal receipts, PayPal screenshots, or foreign-format invoices may not satisfy Costa Rican tax rules for local-source income.

⚡ Hacienda fines, denied expense deductions, audit exposure, and client refusal to pay without compliant invoice.

✅ Set up a Hacienda-authorised invoicing system before billing Costa Rican clients and keep XML/acceptance records.

Buying a car with liens, tickets, or unpaid Marchamo

Vehicle debts and encumbrances can follow the vehicle. A clean-looking car can have a prenda, unpaid tickets, Marchamo arrears, or failed RTV history.

⚡ Inherited debts, blocked transfer, impound risk, and expensive legal cleanup.

✅ Have your notary check Registro Nacional, COSEVI/tickets, Marchamo, and RTV status before paying a deposit.

Missing the February school-year intake

Costa Rica's school year generally runs February to November. Public and many private schools organise placement before the year starts, and international schools often fill months earlier.

⚡ Limited school choice, temporary homeschooling, or expensive late private placement.

✅ Gather school records, vaccinations, translations, and applications by September or October for the following February start.

Private health insurance may exclude pre-existing conditions

Private insurers can underwrite, exclude, cap, or price pre-existing conditions. Retirees who wait until after a diagnosis may find coverage unavailable or unaffordable.

⚡ High out-of-pocket private hospital bills or dependence on CCSS waitlists for non-urgent care.

✅ Apply before major health changes and disclose accurately. Compare INS/local and international plans before relying on one policy.

Early rental termination can be expensive

Costa Rican leases often carry statutory and contractual notice/penalty rules. Many expats sign in tourist areas without understanding the 3-month notice and penalty dynamics.

⚡ Loss of deposit, claim for several months of rent, or legal dispute with landlord.

✅ Have a Spanish-speaking lawyer or trusted adviser review notice, deposit, currency, utilities, and early-exit clauses before signing.

Utilities can be disconnected quickly after missed payments

Electricity, water, and internet billing may not arrive reliably by mail. Tenants sometimes assume the landlord pays when the account is actually tenant-paid.

⚡ Power, water, or internet cutoff, reconnection fees, and landlord conflict.

✅ Get every account number at move-in and set bank/SINPE reminders. Confirm whether bills are included in rent in writing.

Flood and landslide risk is highly local

Rainy-season flooding, landslides, river overflow, and road washouts can affect specific streets and valleys while nearby areas remain fine. Real-estate listings rarely highlight this risk.

⚡ Property damage, blocked access, mould, insurance exclusions, and resale difficulty.

✅ Check CNE risk maps, ask neighbours about rainy-season history, inspect drainage, and review insurance before renting or buying.

Missing beneficial-owner/shareholder registry duties

Costa Rican entities may have shareholder/beneficial-owner reporting obligations. Foreign owners often assume their notary handles everything automatically after incorporation.

⚡ Fines, blocked corporate certificates, and problems selling property or changing company officers.

✅ Ask your notary/CPA every January whether RTBF or other corporate filings apply to your SRL/SA that year.

Minimum wages change by occupation, not one simple national rate

Costa Rica has many occupational minimum wage categories. Using one generic minimum wage for domestic workers, technicians, professionals, or piecework can underpay staff.

⚡ MTSS complaint, back wages, fines, and CCSS recalculation.

📅 Deadline: Review each January 1 wage decree/list

✅ Check the MTSS salary list for the exact occupation before setting pay and update payroll after each annual decree.

Snakebite risk is real in gardens and rural areas — seek emergency treatment immediately

Costa Rica has over 140 snake species, of which 22 are venomous. The fer-de-lance (terciopelo, Bothrops asper) is responsible for the majority of serious bites — it is widespread, camouflages well in leaf litter, and will strike defensively. Other dangerous species include the bushmaster (lachesis), eyelash pit viper (bocaracá), and Central American lancehead. Bites occur most often when walking in gardens, on rural paths, and in agricultural areas — including near suburban homes in the Central Valley, Guanacaste, and Caribbean and Pacific coastal zones. Urban expats encounter snakes more often than expected, particularly after heavy rain.

⚡ Fer-de-lance venom causes severe tissue necrosis and coagulopathy and can be fatal without prompt antivenom treatment. Delayed treatment of more than 2–4 hours dramatically worsens outcomes and tissue damage. Medical evacuation from remote areas can take hours.

✅ Wear closed shoes when walking on unpaved ground, in gardens, or near undergrowth, especially at night. Use a torch after dark. Never put hands into rock crevices, hollow logs, or leaf piles without checking. Keep grass short around the home and remove debris piles. If bitten: remain calm, immobilise the affected limb at or below heart level, remove jewellery near the bite, and get to the nearest CCSS Área de Salud or hospital immediately — do not cut, suck, tourniquet, or apply ice to the wound. Antivenom (suero antiofídico) is available free at all CCSS hospitals. Photograph the snake if safe to do so, as identification aids treatment.