Cataño
Can you run an Airbnb or do rental arbitrage here? What the city requires: permits, taxes, safety rules and enforcement.
Yellow light: allowed, but a new 2026 city license stacks on top of state rules
Cataño adopted its own short-term rental regulation in February 2026, with a transition period before penalties apply.[1, 2] You need a municipal license, and fees start at $500 a year for a home you don't live in.[1] A non-owner can apply, but only with proof of legal capacity or the owner's express authorization.[1]
Our verdict, based on the sources at the end of this guide.
Cataño adopted its own short-term rental regulation in February 2026, so you now need a municipal license on top of the Puerto Rico Tourism Company registration.[1, 2, 3] Licenses cost from $500 a year for a home you don't live in, and fees rise with each home.[1] Tenants can apply with the owner's express authorization.[1] A state bill that would set one uniform municipal registry passed the Senate in November 2025 and now sits in a House committee.[5]
Key requirements
Municipal license
Get an annual license from the municipality before you rent for fewer than 90 days.[1] It lasts one year, renews on the same terms and expires in line with the municipal business tax (patente) filing deadline.[1] The ordinance names the Finance and Budget Office to run the registry, and the city says it uses platform data to keep it current.[1, 2]
Who can apply
You can apply as the owner, the legal possessor or the manager of the property.[1] If you aren't the registered owner, you must prove your legal capacity or show the owner's express authorization.[1] The regulation's host definition includes a tenant who holds the property for more than 90 days and is allowed to run short-term rentals.[1]
Tourism Company ID
Register as an innkeeper with the Puerto Rico Tourism Company and get an innkeeper ID number.[3, 4] The Tourism Company's form asks for ownership status and authorization documents, and the city's license application asks for a copy of your hotelier registration.[1, 6]
License fees
Fees are yearly and non-refundable. A home you don't live in costs $500 for one, $1,000 for two, $1,500 for three and $1,750 for four, and each home after the third adds $250.[1] Sharing your own main residence costs $250 for one, $500 for two, $750 for three and $875 for four, and each home after the third adds $125.[1]
Application papers
Bring a notarized sworn statement on voluntary restrictions, the master deed or building rules, a CRIM no-debt certificate or approved payment plan, proof you paid the room tax, your cadastre number and the Permiso Único.[1] You also need a merchant registration copy, the platforms you'll use and photos of the property.[1]
Operational and safety standards
Listing and sign
Put the license number in every platform ad.[1] The city also issues a sign to post in a visible spot inside the property, showing the host's contact details, the maximum guests, rooms and beds, the parking and the validity date.[1]
Events and character
Commercial events and activities aren't allowed, and social events can't disturb the area.[1] You also can't change the residential character of the property or the neighborhood.[1]
Guest fines
You must make sure guests know the local laws and the fines they could face.[1] Guest fines go to the guest first, and if the guest hasn't paid or asked for a hearing after 30 days, you owe them within 15 more days.[1]
Condos and HOAs
The regulation doesn't authorize short-term rentals where a master deed, condo rules or HOA restrictions prohibit them.[1] Those groups can set rules as strict as the city's or stricter.[1]
Zoning, inspection and ineligible homes
The city won't approve a license that doesn't match current zoning, and it can inspect before granting or renewing a license.[1] Homes in state or federal subsidy programs and public housing don't qualify, and a license can't be transferred to another person or home.[1]
Tax obligations
State room tax
Stays under 90 days carry a 7% Tourism Company room tax on the room rate.[3, 4] You collect it from guests and file a declaration by the 10th of the following month.[3, 4]
Innkeepers and platforms
Act 272 requires the innkeeper to collect, withhold and send in the tax, and it makes booking intermediaries responsible for collecting and remitting it too.[4] It defines an innkeeper to include owners, operators and tenants who run short-term rentals.[4]
Bond
Innkeepers must post a bond to guarantee the tax payments, in an amount the Tourism Company sets by regulation.[4] Failing to post it can bring fines, surcharges and loss of Tourism Company benefits.[4]
Municipal business tax
You also owe the municipality's annual patente on your gross receipts.[1] Show proof of payment when you apply, and get a patente the first time you set up a short-term rental.[1]
IVU sales tax
The Treasury's IVU regulation excludes rentals of properties subject to the room occupancy tax, including short-term supplementary lodging, from its rental definition.[7]
Enforcement
No license
Operating without a license costs $1,000 for a first violation and $2,500 for a second.[1] A third brings $5,000 and a one-year bar on applying for a license.[1]
Other violations
Other violations cost $500, $1,000 and then $5,000 plus a one-year license revocation, per violation.[1] They can hit hosts, operators, owners, intermediaries and platforms, and unpaid fines add $150 a week after 60 days.[1]
Monitoring
The city monitors platform listings and plans agreements with platforms to send it host names, addresses and income every month.[1] Municipal police and permit inspectors can issue fines.[1]
Phase-in
The city has 180 days from approval to set up its systems, and hosts have 180 days after that to file their paperwork.[1] You can keep operating during that window, and penalties apply to anyone not in compliance afterward.[1]
Pending state bills
A Senate bill would add one uniform municipal registry and license process to Act 272.[5] A House bill would require operators to post beach-hazard, emergency-contact and evacuation notices, and it sits in two Senate committees.[8]
Bottom line for arbitrage
Workable if the owner signs off, but budget for the new city license, the patente and fines that reach $5,000.
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Sources
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