Cancun Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Cancun

Cancun, the vibrant tourist destination in Mexico's Quintana Roo state, has seen a surge in short-term rental properties listed on platforms like Airbnb and Vrbo in recent years. However, before venturing into this business, it's crucial to understand the local regulations governing short-term rentals in the region.

The state government of Quintana Roo has implemented new legal requirements for vacation rental owners to ensure safety standards and tax compliance. As of 2023, all hosts renting out their properties on online platforms must obtain a license to operate and collect a 3% lodging tax on each booking.

To start a short-term rental business in Cancun, property owners must follow these key steps:

• Obtain a Holiday Home Permit from the Department of Culture and Tourism - Quintana Roo (DCT Quintana Roo). This process involves submitting various documents, such as proof of ownership, floor plans, and evidence of compliance with safety standards.
• Register the short-term rental property with the Tawtheeq system, an online platform for tenancy contract registration managed by the Quintana Roo Judicial Department.
• Ensure compliance with any zoning regulations or restrictions imposed by the specific area or residential community where the property is located. Some gated communities or apartment buildings may prohibit or limit short-term rentals.
• Collect and remit the 3% lodging tax, known as the Tourism Dirham Fee, to DCT Quintana Roo on a regular basis.
• Familiarize yourself with any additional requirements or guidelines set forth by DCT Quintana Roo regarding safety measures, amenities, and guest services for holiday homes.

While the regulations aim to ensure a safe and regulated vacation rental market, some hosts have expressed concerns about the complexity and costs associated with compliance. On forums like Bigger Pockets and Reddit, hosts have shared their experiences navigating the licensing process and the challenges of operating within the rules.

Despite the regulatory hurdles, Cancun's booming tourism industry and the growing demand for alternative accommodations make short-term rentals an attractive investment opportunity for many property owners. By understanding and adhering to the local regulations, hosts can contribute to the sustainable growth of this dynamic sector while providing a safe and enjoyable experience for their guests.

Short-Term Rental Licensing Requirement in Cancun

To operate a short-term rental business in Cancun, property owners are required to obtain a Holiday Home Permit from the Department of Culture and Tourism - Quintana Roo (DCT Quintana Roo). This licensing requirement is part of the state's efforts to regulate the growing vacation rental market and ensure compliance with safety, quality, and zoning standards.

The process of obtaining a Holiday Home Permit typically involves the following steps:

1. Submit a completed application form to DCT Quintana Roo, providing detailed information about the property owner, the rental property, and the intended rental arrangement.
2. Provide proof of ownership or legal permission to use the property for short-term rentals, such as a title deed or a notarized letter from the owner.
3. Submit a floor plan of the property, clearly indicating the rooms and spaces that will be used for short-term rentals, as well as any fire safety features and emergency exits.
4. Demonstrate compliance with DCT Quintana Roo's guidelines for holiday homes, which may include requirements related to amenities, guest services, and safety measures such as smoke detectors and fire extinguishers.
5. Provide evidence of appropriate insurance coverage for the property, including liability insurance to protect guests in case of accidents or injuries during their stay.
6. Register the short-term rental property with the Tawtheeq system, which is an online platform for tenancy contract registration managed by the Quintana Roo Judicial Department.
7. Pay the applicable fees for the Holiday Home Permit, which may include an initial application fee and an annual renewal fee.

It's important to note that the specific requirements and fees for obtaining a Holiday Home Permit may vary depending on the location, size, and type of the rental property. Additionally, some residential communities or buildings in Cancun may have their own rules or restrictions regarding short-term rentals, which must be adhered to in addition to the DCT Quintana Roo's regulations.

Failure to obtain the required Holiday Home Permit or comply with the licensing conditions can result in fines, penalties, and potential legal consequences for short-term rental operators in Cancun. It's advisable to consult with local real estate professionals or legal experts to ensure full compliance with all applicable regulations before starting a short-term rental business in this area.

Required Documents for Cancun Short-Term Rentals

When applying for a short-term rental permit in Cancun, property owners will need to provide several documents to demonstrate their eligibility and compliance with local regulations. The specific requirements may vary depending on the applicant's situation, but generally include:

1. Completed application form, which can be obtained from the Department of Culture and Tourism - Quintana Roo (DCT Quintana Roo).
2. Proof of property ownership, such as a title deed or property tax bill, confirming the applicant's legal right to rent out the property on a short-term basis.
3. Government-issued photo identification, such as a passport or voter registration card, for the property owner or the primary applicant if the owner is a corporation.
4. If the applicant is not the property owner, a notarized letter of permission from the registered owner is required, granting the applicant the right to operate a short-term rental on the property.
5. A floor plan of the property, clearly indicating the rooms and spaces that will be used for short-term rentals, as well as any fire safety features and emergency exits.
6. Evidence of appropriate insurance coverage for the property, including liability insurance to protect guests in case of accidents or injuries during their stay.
7. If the property is located within a gated community or condominium complex, written approval or a no-objection certificate from the building management or homeowners' association may be required.
8. Proof of registration with the Mexican tax authorities and a valid tax ID number (RFC) to properly report and pay taxes on rental income.
9. Payment of the applicable fees for the Holiday Home Permit may include an initial application fee and an annual renewal fee.
10. Depending on the property's specific characteristics and intended use, additional documents such as fire safety certificates, accessibility compliance forms, or proof of compliance with any required training or certification programs may also be necessary.

It's important to note that these requirements are subject to change, and DCT Quintana Roo may request additional documentation on a case-by-case basis. Applicants should contact the department directly or visit their website for the most up-to-date information on short-term rental permit requirements in Cancun.

Failing to provide all mandatory documents could result in delays in permit approval or rejection of the application altogether. Property owners should allow ample time to gather the necessary paperwork before their anticipated rental start date to avoid any disruptions to their business plans.

Cancun Short-Term Rental Taxes

When operating a short-term rental in Cancun, Quintana Roo, it's essential to understand and comply with the local tax regulations. In addition to the licensing fees, short-term rental operators in Cancun are required to collect and remit several taxes on their rental income.

One key tax that applies to short-term rentals in Cancun is the Tourism Dirham Fee, also known as the Lodging Tax. This fee is imposed by the Department of Culture and Tourism - Quintana Roo (DCT Quintana Roo) on all holiday homes and hotel stays. The Tourism Dirham Fee is currently set at 3% of the total rental amount, including any cleaning fees or additional charges.

As a short-term rental host in Cancun, you are responsible for collecting the 3% Tourism Dirham Fee from your guests and remitting it to DCT Quintana Roo on a regular basis, typically on a monthly or quarterly schedule.

In addition to the Tourism Dirham Fee, short-term rental hosts in Cancun may also be required to collect and remit Value Added Tax (VAT). The VAT in Mexico is currently set at 16% for most goods and services, including rental properties.

As a short-term rental host, you will need to register for VAT if your annual turnover exceeds a certain threshold. If registered, you must charge VAT on your rental income and file regular VAT returns with the Mexican tax authorities.

It's important to note that while there is currently no specific tax on rental income in Quintana Roo, the Mexican federal government has introduced a corporate tax that may impact short-term rental hosts. The corporate tax rate is 9% for taxable income above a certain threshold, and it's essential to consult with a tax professional to understand your obligations.

To ensure compliance with Cancun's short-term rental tax regulations, hosts should:

1. Register with the relevant tax authorities and obtain any necessary tax identification numbers.
2. Collect and remit the 3% Tourism Dirham Fee and any applicable VAT to the appropriate authorities on time.
3. Keep accurate records of all rental income and expenses, as these may be required for tax purposes.
4. Stay informed about any changes to local or federal tax laws or regulations that could impact their short-term rental business.

Failing to comply with Cancun's tax requirements can result in penalties, fines, and legal issues. Therefore, consulting with a local tax expert or accountant is advisable to ensure you are meeting all your tax obligations as a short-term rental host.

While the tax environment in Cancun and Quintana Roo may seem complex, it's essential for short-term rental operators to factor in the costs of compliance when calculating their potential returns. By staying on top of their tax responsibilities, hosts can minimize their risk and focus on providing a great experience for their guests in this thriving tourism market.

Quintana Roo Wide Short-Term Rental Rules

While individual municipalities in Quintana Roo may have their own specific regulations for short-term rentals, some state-wide rules and guidelines apply across the state. These Quintana Roo-wide rules aim to provide a general framework for the operation of short-term rentals while still allowing local governments the flexibility to tailor their bylaws to the specific needs of their communities.

One of the key state-wide regulations is the requirement for all short-term rental operators to obtain a Holiday Home Permit from the Department of Culture and Tourism - Quintana Roo (DCT Quintana Roo). This licensing process involves submitting various documents, such as proof of ownership, floor plans, and evidence of compliance with safety standards.

Additionally, short-term rental properties in Quintana Roo must be registered with the Tawtheeq system, which is an online platform for tenancy contract registration managed by the Quintana Roo Judicial Department.

Another important state-wide regulation is the requirement to collect and remit the Tourism Dirham Fee, also known as the Lodging Tax. This fee is currently set at 3% of the total rental amount, including any cleaning fees or additional charges. Short-term rental hosts are responsible for collecting this fee from their guests and remitting it to DCT Quintana Roo on a regular basis, typically monthly or quarterly.

Furthermore, DCT Quintana Roo has established guidelines for holiday homes regarding safety measures, amenities, and guest services. These standards must be met by all licensed short-term rental operators to ensure a consistent level of quality and safety across the state.

It's worth noting that while these state-wide rules provide a general framework, individual municipalities or residential communities may have additional regulations or restrictions regarding short-term rentals. For example, some areas may limit the number of rental days allowed, or require additional approvals from homeowners associations or building management.

Before starting a short-term rental business anywhere in Quintana Roo, hosts should research and comply with all relevant state-wide and local regulations. Consulting with legal experts or professional vacation rental management companies can help navigate the complex regulatory landscape and avoid potential pitfalls.

By understanding and adhering to the state-wide rules for short-term rentals, hosts can contribute to the growth and sustainability of this dynamic sector while providing a safe and enjoyable experience for their guests. As the short-term rental market continues to evolve in Quintana Roo, a well-regulated and thriving industry can play a key role in supporting the state's tourism and economic development initiatives.

Does Cancun Strictly Enforce STR Rules?

Based on discussions from Airbnb hosts on Reddit and Bigger Pockets, it appears that enforcement of short-term rental regulations in Cancun has been relatively strict compared to some other cities in Mexico. While short-term rentals are allowed, many hosts report facing penalties or having their listings shut down for operating without the required permits and licenses.

On the Mexico subreddit, several hosts mentioned that Cancun authorities have been actively cracking down on unlicensed Airbnb operators in recent years. One host shared their experience of receiving a hefty fine and having their listing removed from the platform after being caught renting out their property without obtaining the necessary Holiday Home Permit from the Department of Culture and Tourism (DCT).

Compared to other tourist destinations like Playa del Carmen or Tulum, Cancun seems to be taking a stricter stance on enforcing its short-term rental rules. The consensus among experienced hosts on Bigger Pockets is that while some areas may be more lenient towards individual operators, Cancun is less likely to turn a blind eye to unlicensed short-term rentals.

However, this strict enforcement approach does not mean that all short-term rental activity in Cancun is completely shut down. Some hosts on Reddit mentioned being able to operate under the radar for a while by being discreet and avoiding any issues that could draw the attention of authorities. However they acknowledged that this is a risky strategy, as getting caught could result in significant fines or legal consequences.

Ultimately, based on the sentiment across Reddit and Bigger Pockets, Cancun appears to be less Airbnb-friendly than other cities in the region. While short-term rentals are permitted, the city seems to be taking a firm stance on ensuring that all operators are properly licensed and compliant with regulations. Hosts who attempt to skirt the rules by operating illegally face a higher risk of penalties and shutdowns.

The general advice from experienced hosts is to carefully navigate the licensing process, obtain all required permits, and operate within the bounds of Cancun's short-term rental regulations. While the rules may be stricter than in some other areas, following them is the safest approach to avoid legal issues and ensure the long-term viability of a short-term rental business in this market.

How to Start a Short-Term Rental Business in Cancun

If you're interested in starting a short-term rental business in Cancun, Mexico, here are the key steps to follow:

1. Research the local short-term rental regulations. Familiarize yourself with the licensing requirements set by the Department of Culture and Tourism - Quintana Roo (DCT Quintana Roo) and any specific rules or restrictions imposed by the municipality or residential community where your property is located.
2. Obtain the necessary licenses and permits. Apply for a Holiday Home Permit from DCT Quintana Roo by submitting the required documents, such as proof of ownership, floor plans, and evidence of compliance with safety standards. Register your property with the Tawtheeq system for tenancy contracts.
3. Ensure compliance with zoning regulations and community rules. Check if your property is located in an area that allows short-term rentals, and obtain any necessary approvals from homeowners associations or building management if required.
4. Prepare your property for guests. Furnish and decorate the space to create a welcoming and comfortable environment. Ensure that all necessary amenities, safety features (e.g., smoke detectors, fire extinguishers), and guest services are provided.
5. List your property on popular short-term rental platforms. Create attractive listings on sites like Airbnb, Vrbo, and Booking.com, showcasing your property's unique features and amenities. Use high-quality photos and detailed descriptions to attract potential guests.
6. Set competitive rates and establish house rules. Research the market rates for similar properties in Cancun and price your rental accordingly. Develop clear house rules and guest policies to ensure a smooth and enjoyable experience for both you and your guests.
7. Register with the relevant tax authorities. Obtain a tax identification number (RFC) and register with the Mexican tax authorities (SAT) to properly report and pay taxes on your rental income, including the 16% Value Added Tax (VAT) and any applicable income tax.
8. Collect and remit the required taxes. Ensure you collect and remit the 3% Tourism Dirham Fee (lodging tax) to DCT Quintana Roo on a regular basis, as well as any other applicable taxes.
9. Provide excellent customer service. Respond promptly to inquiries and bookings, and be available to address any concerns or issues that may arise during a guest's stay. Encourage satisfied guests to leave positive reviews, as these can significantly impact your future bookings.
10. Stay informed and adapt to changes. The short-term rental market in Cancun and Quintana Roo is constantly evolving, with potential changes in regulations, market trends, and guest preferences. Stay up-to-date with industry developments and be prepared to adapt your business strategies accordingly.

You can establish a successful short-term rental business in Cancun by following these steps and providing a high-quality rental experience. Remember to prioritize compliance with local regulations, maintain open communication with guests, and continuously strive to improve your offerings to stay competitive in this dynamic market.

Who to Contact in Cancun about Short-Term Rental Regulations and Zoning?

To get the most accurate and up-to-date information about short-term rental regulations and zoning requirements in Cancun, it's best to contact the relevant government authorities directly. Here are some key departments and their contact details:

1. Department of Culture and Tourism - Quintana Roo (DCT Quintana Roo)

Address: Av. Tulum 421, Gonzalo Guerrero, 77720 Playa del Carmen, Q.R.
Phone: +52 984 803 9999
Email: atencion.ciudadana@qroo.gob.mx
Website: www.qroo.gob.mx/sedetur

2. Cancun Municipal Government (Ayuntamiento de Benito Juárez)

Address: Av. Tulum 676, Sm 310, 77500 Cancún, Q.R.
Phone: +52 998 881 0500
Email: presidencia@cancun.gob.mx
Website: www.cancun.gob.mx

3. Urban Development and Public Works Department (Dirección de Desarrollo Urbano y Obras Públicas)

Phone: +52 998 881 0500 ext. 3300
Email: desarrollourbano@cancun.gob.mx

4. Economic Development Department (Dirección de Desarrollo Económico)

Phone: +52 998 881 0500 ext. 3400
Email: desarrolloeconomico@cancun.gob.mx

These government entities should be able to provide guidance on any permits, licenses, or zoning approvals needed to operate a short-term rental business in Cancun. They can also clarify any specific regulations around hosting platforms like Airbnb and Vrbo.

Another helpful resource could be the Cancun branch of the Mexican Association of Real Estate Professionals (AMPI - Asociación Mexicana de Profesionales Inmobiliarios):

5. AMPI Cancun

Address: Av. Bonampak SM 6 MZA 1 Lote 1, 77500 Cancún, Q.R.
Phone: +52 998 884 1104
Email: cancun@ampi.org

AMPI is a national organization of realtors, brokers, and other real estate experts. The local chapter may have insights into how short-term rental regulations are being interpreted and enforced in Cancun.

For the most definitive answers, it's always best to go straight to the municipal and state authorities. Be prepared to explain the details of your short-term rental plans, including the type of property, target guests, and expected rental frequency. With their guidance, you can ensure you are operating in full compliance with Cancun's rules.

What Do Airbnb Hosts in Cancun on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions from Airbnb hosts in Cancun on Reddit and Bigger Pockets, opinions seem divided regarding the city's short-term rental regulations:

Some hosts on the Mexico subreddit expressed frustration with the licensing process, citing the fees and requirements as overly burdensome for small-scale operators. They feel that the regulations, such as obtaining a fire safety plan and submitting to property inspections, are excessive for those simply renting out a spare room or apartment.

However, other hosts acknowledged the need for reasonable regulations to maintain safety standards and address concerns about the impact of short-term rentals on the local housing market. A few Reddit users supported the licensing requirements, arguing that it helps ensure a level playing field and prevents irresponsible operators from tarnishing the industry's reputation.

On Bigger Pockets, one host shared their experience navigating Cancun's licensing system, describing it as confusing and lacking clear guidance from city officials. They emphasized the importance of thoroughly researching the requirements independently rather than relying solely on information provided by the authorities.

Another common theme across both platforms is the need to carefully review building-specific rules, even if the city allows short-term rentals. Several hosts mentioned issues with condominium boards or homeowners associations prohibiting rentals under 30 days, which they were unaware of before starting to host.

Despite the regulatory challenges, some hosts on Reddit and Bigger Pockets expressed optimism about the potential for short-term rentals in Cancun, citing the city's booming tourism market and the opportunity to offer alternative accommodations to traditional hotels.

While some Cancun hosts appreciate the city's efforts to regulate short-term rentals and maintain quality standards, others find the licensing process overly burdensome. The general consensus seems to be that while the regulations are necessary, they could be streamlined and clarified to make compliance easier for responsible hosts.

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.