Hostel
Tax incentive for hostel operations providing budget accommodation with dormitory-style and shared facilities.
7 min
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Section Code:
2051.01 (b)-12
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Purpose:
Visitor Economy — 2051.01 (b)-12
Overview
The Hostel designation under Section 2051.01(b)-12 of Act 60-2019, as amended, provides preferential tax treatment for hostel operations offering budget accommodation in Puerto Rico. This designation supports accessible tourism by incentivizing affordable lodging options that attract budget travelers and extended-stay visitors.
Qualifying hostel operators may receive reduced corporate income tax rates, property tax exemptions on facilities, and municipal tax relief. The program attracts hostel developers and operators providing dormitory-style and private budget accommodation.
The key distinction is its focus on budget accommodation with shared facilities rather than traditional hotels. Hostels typically feature dormitory sleeping arrangements, shared bathrooms and common areas, and lower price points.
Key Benefits
Reduced Corporate Income Tax Rate
Hostel operators may receive reduced rates on income from accommodation services.
Property Tax Exemptions
Hostel buildings, furnishings, and facilities may receive property tax exemptions.
Municipal Tax Relief
Hostel operators may receive exemptions from municipal license taxes.
Budget Tourism Support
Hostels expand accommodation options and attract budget-conscious travelers.
Requirements & Obligations
Hostel Facility Standards
Facilities must meet hostel standards including dormitory accommodations, shared facilities, and appropriate safety features.
Operational Requirements
Hostels must maintain quality standards, cleanliness, and guest services appropriate to budget accommodation.
Licensing and Safety
Hostels must obtain tourism licenses and comply with safety codes and building regulations.
Employment Requirements
Hostel operators must employ Puerto Rico residents.
Reporting Requirements
Annual reports document hostel operations, occupancy, revenues, and employment.
How to Apply
Applications typically require four (4) to eight (8) months. Applications include facility descriptions, operational plans, and financial projections. Review evaluates facility standards and operational capacity. Upon approval, operators complete facility setup and commence operations.
This information is educational and should not be considered legal or tax advice. Applicants should consult with qualified legal and tax professionals familiar with Puerto Rico incentive programs before making any business decisions or submitting applications.
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