Costa Rica Rental Income Tax Guide 2026
Rental income in Costa Rica is taxed at the same progressive PAYE rates as employment income: 0% up to CRC 942,000 monthly, then 10%, 15%, 20%, and 25%. Landlords can deduct expenses including a standard 5% depreciation allowance on the property value. Filing is through the D-101 annual return.
How Rental Income Is Taxed
Rental income from property in Costa Rica is classified as ordinary income and is subject to the same progressive PAYE tax brackets as employment income. The tax is calculated on the net rental income (gross rent minus allowable deductions). The tax year is the calendar year, and the annual return (D-101) is due by February 15.
- 0%: Up to CRC 942,000 net rental income per month
- 10%: CRC 942,001 – CRC 1,411,000
- 15%: CRC 1,411,001 – CRC 2,117,000
- 20%: CRC 2,117,001 – CRC 4,233,000
- 25%: Above CRC 4,233,000
Allowable Deductions
Landlords can deduct a wide range of expenses from gross rental income to arrive at the net taxable amount:
- Depreciation: 5% per year of the property's registered value (building only, not land)
- Maintenance and repairs: Actual documented costs for property upkeep
- Property taxes: Annual municipal property tax and transfer tax
- Insurance premiums: Property insurance costs
- Management fees: Fees paid to property management companies
- Utilities: Water, electricity, internet if paid by the landlord
- Mortgage interest: Interest on loans used to acquire or improve the rental property
Filing Requirements
Landlords must report rental income on their annual D-101 tax return. If rental income exceeds CRC 4,560,000 annually, filing is mandatory. All expenses must be supported by electronic invoices (factura electrónica) or other valid documentation. The DGT may require proof of expenses in the event of an audit.